Straits Times Index   

STI to cross 3000 boosted by long-term investors

I really hope the market is stabilizing week by week. I thought it was over when our local bank DBS assured the investors that the sub Prime exposure is minimum until last fri. It had $2.4 billions in exposure. How many corporations are hiding the truth? Not telling the exact impact?

What may seen as a superficial/technical rebound, is far from reality at the ground level. Many central banks are providing the liquidity right now. But how long can it sustain it?


The sentiments have changed. Preserving capital is my priority. No need to take unnecessary risk under such circumstances. Upside potential little and downside risk a lot more.

Have a great trading in the weeks ahead. This market is for the brave hearted. I have got a pretty weak heart for such volatility.

 

This may be worth pondering...

In the last  month, may people very quickly lost heavily in the stock market. Will this have any delayed effect on the market's future performance? Since those who have lost may well be an integral part of the local economy itself.

Will weakness beget further weakness? ie. will the bear trend materialise?

Maybe not... but what if the Shanghai falls heavily soon?...

 

Absolutely right... prevention... or rather defensive trading should be one's motto.

Then one's top priority will not be to make money, but to preserve one's capital.

But unfortunately, in reality, people's top highest priority is to make money fast...  

 

Prevention is Better than Cure.

Infectors never write "I'm HIV Possitive" on their face.

 

 

All these negative talk by people is because they want the market to go down further

The reality is that the market has gone down alot previously - but they did not get in to pick up stocks as they are not that brave enough

The reality now is that the market is stabilising by the week and going up slowly

 

But hot and cold frogs aside, trading the market should really not be based on whether we are psychologically 'hot' (bullish) or 'cold' (bearish)...

Our decisions must be based strictly on our objective reckoning with reference to the stock charts, which his to say, the technical price action itself. One should never cling stubbornly to one's pet idea of a particular stock's 'strong fundamentals'.

A stock is just another stock... if it goes down, it goes down, regardless of it's perceived'superb fundamentals' !!!...

 

You are right! They will also be scared of their own previous hotness!

But usually, as is human nature, when it's time to be cold, it will take much effort...

 

mani wodehaopengyou....

with the global warming threat looming, no humans nor frogs may ever be afraid of cold again. they maybe afraid of the heat soon...;)   

 

But the frogs are not cold yet!...

And when these frogs are shivering, they will not be shivering because of cold...

Itt will be because the are frightened of the market! ... hehehe...

(And that's the right time to buy)

 

I guess you are right.

1987, 1997 & 2007. All these were caused by structural defects in the financial markets. In 1997 were the Asian financial infrastructure, now it s the US financial institutions lending money flippantly. I guess many banks and financial inst. in Europe and Asia are involved too. (DBS- 2.4billions)

It will be interesting months. Lets make some money in the falling markets.
 

 

Thus, stock trading is still a prudent thing to do, provided one is willing to be diligent with the 'homework' ie. chart scrutiny and chart monitoring...

 

Long-term investors, or long holders, are taking too much risk with their hard-earned money...


They can loose till they lose all sleep!!! ...

 

I guess this is not the time to be Gung Ho in trading. If you want to, the bad years like 1998, 2004 you can be more aggressive in putting your money in the stock markets when the index is less than 2000 pts. Then, you can have lots of rooms for errors. Put option on the STI is a better bet for now. 

 

 

well it is anybody's guess as which direction the market will go. Higher or lower.
Let's try throwing a coin 50-50 chance. But let's take a closer look at things from the macro economic views. It is quite messy out there.

Currently, the US Sub prime issue has not gone away. The Yen carry trade continues to be a concern. Hurricane continues to hit the news. Banks and finance companies have not fully reported the full exposure to sub prime because there is resale  market for these CDOs.
Many people will be trying to redeem from hedge funds in the final quarter of the year.
Just when I thought it was over, UK Sub prime will be hitting the news soon. Many defaulters of housing mortgage loans. Then the news that China concerns over inflation, Indian & China markets overprice.

Generally, the consensus is to sell into a rally. I tend to agree with this view and being prudent with my money.
Have a nice trading  week.

 

Those waiting for Oct crash and buy at year end may find themelves buying at a higher price

 

During the past 3 weeks or so, apparently many "heated frogs" lost a lot of money...

I think the situation is not over yet...

many "heated frogs", ie. those who have unwavering faith that bullishness is still with us, are still around.

And many will take full advantage of them to make a quicky killing (sell on the rallies)...

 

concur with newmoon, ipunter and the rest.

dow is up 142 points on volume of only 1.2mil contracts. the day it dipped, the no: of contracts was 45mil. same for sti. tech bounces on thin volumes are not to be trusted.

also note one more thing: quite a few of the blues have already rebounded to a relatively decent level (eg, sembcorp from 4.64 to 5.35). the institutions have this option known as borrowing the blues. where they can trade short term for profit.

now think as a BB: you are making major losses on other global stocks. You are making profit on asia/sgx stocks. it is a volatile market. there are people with 45 day clawback on redemption of funds: you know how much you have to return, which the market doesn't. Are you going to let your profit ride, or would you take money that's confirmed on the table?

having said that tho: short term STI is likely to be up. level to hit is 3450. then it's a massive up or down. toss a coin, even chance.

october will be the month to watch. i'll be out of the country. haha.

 

cashiertan is right, i believe. The volumes on the recent up days are nothing to crow about. I doubt that the recent reversal in trend is anything by a temporary reprieve as there are still lingering concerns over bad subprime loans. Best to buy when backed again by the evidence of institutional buying. In the meantime, it's good to buy insurance in the form of put warrants.

 

Dow Jones Range;

If it is umable to crack 13650 and goes down and breaks 12850 the game is over.

The monkey business controlled by jewish bankers is going to bring on a world wide recession-no hanky pahnky can prevent a business downturn long overdue .The longer the charade goes on the worst the reult.