|This month, we’re going to look at the giants of the Technology sector. This report features the biggest companies from all the diversified industries of this sector including telcos, semiconductors, box makers, retail and on-line services.There has been a lot of talk that Big Tech companies in America are overbought and overvalued. The speculation is that they will be the ones that fall the hardest if and when this “bubble” bursts. Thus, there are lots of reasons to visit this huge sector to see what opportunities await.
Plus! Don’t miss out our extended market report with updates on the U.S. and regional markets.
July started with a quick vacation-cum-business trip-cum-catch up with friends in Perth, Australia. Many thanks to Rom and Raph for entertaining us and having us over to their homes for dinner with their families. How time has flown. We were once our kids’ ages and messing up our lives. Now look at us – parents, guiding our kids to not do the shit we did. I have to say that we haven’t done that badly considering what rascals we were. Thanks for having Lucy and me over, bros.
Not much else happened in July 2015 worth noting. Most of my time was spent watching a most interesting global development that skewed the markets to and fro. So let’s get to the action.
2015 has seen the most fickle U.S. market in history having swung the DOW between gains and losses 21 times in seven months. This surpasses the record of 20 swings in 1934 and 1994. It comes as no surprise because I wrote about it at the end of January this year;
“Let’s recap some of those foreboding prophecies we mentioned last month … no sell-off in May 2014, terrible Black Friday numbers, no Santa Claus Rally … the updates from January are that the first day was down, the second day was also down (which is extremely rare), the first five days didn’t give us a gain and the January Barometer is bearish – all signs that 2015 is likely to be more bearish than bullish.”
At the end of March, the December Low indicator was divergent from the January Barometer, warning us that the rest of 2015 would either be extremely volatile or very flat. Seems we got the latter.
As of the close of Friday 31 July 2015, the DOW is negative for the year and below its 200DSMA. Earnings have been a mixed bag of results with hits and misses evenly across the broader market. Revenues, however, have faltered further. Guidance is almost non-existent as most companies kept their outlooks close to their chest.
The market’s reaction to earnings has broadly been dovish because of “better than expected” numbers. However, those number have mostly been downward revisions when compared YonY and QonQ. The reality is that the market is not doing as well as the benchmark indices are suggesting.
A quick look at the Transportation index (above, bottom) will give you an idea of what the Dow (above, top), NASDAQ and S&P should actually look like if all things were equal and not manipulated.
The $TRAN has spent all but five sessions in the red for the year and has been well under its 200DSMA since 18 May. Such price divergences between the benchmarks and the $TRAN has more often than not, swung in favor of the $TRAN in the longer term as was the case at the top of the sub-prime bubble.
Yields have fallen across the board in July. Spreads between the 5/10 and 10/30 have tightened to 66bps and 72bps.
With only a couple of weeks left for earnings season, I doubt very much that the remaining big names can make a difference for the coming months of August and September.
And they are going to be very rough months.
Singapore’s economy fell into a technical recession when growth fell to -4.6% in Q2 on the back of weak manufacturing. Earnings amongst the big three banks have been underwhelming with UOB announcing a 5.7% YonY drop in profits.
The STI (3,202.50) closed out the month with its two worst consecutive sessions since 2011.
The KLCI (1,723.14) fared no better under the weight of the 1MDB scandal and a weak Ringgit. Both KLCI and STI are in the red for the year since the end of May and under their respective 200DSMAs.
Amongst regional currencies, for the first time since 2008, the AUD fell below the SGD in July 2015. It closed out the month at 1.0025. The SGD saw some weakness against the Ringgit in July. It started the month well hitting a high of 2.8296 on 7 July only to close the month out at 2.7861.
Elsewhere, The Chinese market saw its worst drop since 2007 on Monday 27 July 2015, losing 8.4% in a single session. From our last report when the Shanghai Composite close out June at 4277.22, the Chinese benchmark fell a further 613 points or -16.73% to close July at 3664.01. This is in spite of the PBOC throwing trillions of Yuan at the market and placing a selling ban across all the major shareholders.
As long as the language in any market is not bearish amongst the big players, this is reason to be extremely cautious. It won’t be until these players are speaking about doom and gloom that I will consider being bullish on risk again.
Till then, I will be watching the yield curve closely and monitoring the economic health of the U.S., China, Australia, Malaysia and Singapore with great interest. Given that we’re going into the two most bearish months of the year, the strength of the Asian economies are going to be severely tested.
One equation I didn’t bother to consider is the Greek issue because I strongly believe that it will continue to be a non-event regardless of what happens to that debt-ridden country.
August 2015 Preview
August has been the most bearish in the last 28 years with no reliable patterns. It is the first of two consecutive months of bearishness going into September, the most bearish month of the year over the last 80-plus years. Since 1987, August has been the worst month on the DOW, S&P and NASDAQ.
August 2015 has 21 full trading sessions and no public holiday.
- August starts in reliably weak fashion
- The first trading day of the month has seen the DOW go down 11 of the last 17
- The Russell 200 has been up 7 of the last 10 on the first trading day.
- The first nine days of August are the weakest first days of any month.
- The start of the second week continues to be weak
- The Friday of the second week is reliably bullish.
- Expiration Week of August is its most bullish week.
- The Monday before August Expiration has been up on the DOW 12 of the last 19.
- August Expiration Friday (21) has been bullish with the DOW up 8 of the last 11.
- The week after Expiration Friday is bullish but not as bullish as week three.
- The Monday after Expiration Friday is reliably bullish.
- August traditionally ends poorly but has been ending stronger in the last 10 years.
- The second-last trading day of August (Friday 28) has been down on the S&P 14 of the last 18.
Key Economic Dates For August 2015
This is going to be a busy month for Central Banks all over the world. With economies contracting and making hawkish forecasts, expect more volatility in the markets and more job lay offs as companies tighten their belts.
- Manufacturing PMI for US, UK, most of Europe
- G8 Meetings
- Australia RBA Rate Statement
- Services PMI for US, UK, most of Europe
- US ADP Employment Change
- US ISM Non-Manufacturing PMI
- Japan BOJ Monthly Report
- Australia RBA Monetary Policy Statement
- UK Official Bank Rate
- US Non Farm Payrolls, Unemployment Rate
- China Industrial Production
- Japan BOJ Monetary Policy Meeting Minutes
- Japan GDP
- Germany GDP
- Europe GDP
- US Industrial Production, Capacity Utilization, Consumer Sentiment
- Australia RBA Monetary Policy Meeting Minutes
- UK CPI
- US Building Permits, Housing Starts
- US CPI, FOMC Meeting Minutes
- Japan Manufacturing PMI
- Japan BOJ Monetary Policy Statement, BOJ Press Conference
- Europe, France, Germany Flash PMI (Services & Manufacturing)
- US Flash Manufacturing PMI, Philly Fed Manufacturing Index, Existing Home Sales
- Jackson Hole Symposium Day 1
- Jackson Hole Symposium Day 2
- Jackson Hole Symposium Day 3
- US Consumer Confidence
- UK GDP Second Estimate
- Europe M3 Money Supply y/y
- US Prelim GDP q/q
- US Chicago PMI
- China Non-Manufacturing PMI, Manufacturing PMI
Oil fell from 60.00p/b to 46.00, Gold dropped from 1,180.00 to 1,095.00, Corn collapsed from 450.00 to 380.00 … commodities across the board took a beating in July with sugar, gold and copper making new multi-year lows.
- Crude tends to weaken late in August
- Nat Gas tends to show strength
- Gold and Silver strengthens in August
- Copper stays weak
- Soya and Corn are also weak in August but Corn tends to have counter-rallies depending on the weather
- Wheat maintains its strength
- Cocoa gets very volatile
- Coffee bottoms in early August and reverses upward by mid month
- Sugar stays low in August.
With Fed Chair Janet Yellen holding rates unchanged at the end of July, this sets up a strong possibility of higher rates by September.
Whatever happens between now and then, I will have my money in commodities as everything else has gotten really troublesome to trade. Its not that commodities is easy but its the least troublesome with very little headlines to create the kind of wildness that the currency and equity markets are seeing now. Plus, they are at their cheapest levels in a long time.
The markets seem to have topped out in most economies and looks likely to continue its volatile consolidation. This month’s report revisits “safe” trades in the form of the Food Products industry. The last time we featured this sector in 2010 produced quite a few winners.
We also have an extended market report this month.
Get your report now:
Just like that, half the year is gone. June was a very short month for me in spite of not doing any classes except for a gathering and a pair of very memorable Candlestick/Breakout Patterns Workshops in Singapore and K.L.
Other than that, it was a month of getting back to fitness and resuming my expansion plans for next year. So without much to talk about or show, let’s get straight to the crux of the current issues regarding the markets.
Things around the world have not been great, to say the least. Greek banks have shut down to prevent a run on the banks, China is looking like capitulating after a magnificent parabolic run on easy money, Singapore has fallen into negative for the year, the Ringgit hit 2.80 against the SGD, commodities continue to find new lows and the American market is still flat for the year after six months of trading.
As of the close of Monday 29 June 2015, the Dow Jones Industrial average closed in negative territory for the year, again. This was its 13th failed attempt at breaking and staying above 18,000, a level that has now become a bogey resistance for the big-cap index.
Now the DOW is effectively below its 200DSMA with the S&P only 4 points away from joining the DOW in a technically bearish market.
The Transports continue their lead in bearish territory, something its been telling us since the start of the year.
Similar divergent situations occurred in 2007, 2000 and in almost every year leading up to a major market crash. The Transports were well below their 200DSMA since May this year having completed a Death Cross above its 50DSMA on the 26th of May.
That was already an indication of more bearish things to come … and it has come.
The DOW now wears a Bearish Engulfing Pattern in monthly candle configuration and is sitting just a tick above its 50week moving average.
After Double Topping in March and May this year, it would seem that the DOW has now successfully been squeezed out of its Ascending Triangle and looks set for further downside.
The next support confluence will be between 17,300 and 17,100 if the current support at 17,600 fails to hold the price up.
A break below 17,100 is going to be a painful drop to around 16,500. I won’t be holding my breath for a miracle to happen neither am I going to wait for this market to get too painful before deciding what to do. I have already moved my interest to commodities as of the start of the year and it has already been a profitable migration. I will be keeping my money there while considering a few bearish option positions on this equity space.
Since the end of last year, I have been talking and writing about the possibilities within the commodity space. At the start of the year, copper went on a run as I mentioned it would in December.
As recently as last week while I was in K.L., I mentioned that I was waiting for a seasonal spike on wheat and sugar and possibly corn to happen toward the end of June. And guess what? … It has happened.
Many more opportunities are waiting to happen in this often-overlooked space in the financial markets.
On the macro front, America’s Inflation Rate remains deflated at -0.2% while its GDP Growth Rate is negative at 0.2% after a double contraction into negative – a technical recession – since the start of the year into June.
Industrial Production (-0.2%), Factory Orders (-0.4%), Durable Goods (-1.8%), NY Empire State Manufacturing Index (-1.98%) and various other production and manufacturing data all point to a weak American economy. The Housing Index, various home sales and mortgage data also point to a weak real estate situation while Personal Spending and Personal Income numbers also fall.
Outside of America, things look worse. China (above) fell of its parabolic perch and wiped out more than half its year’s gains in only three weeks.
Singapore’s market (above) isn’t faring that much better having fallen into negative for the year since the end of May and looks set to stay entrenched below 3,400 for the time being.
Housing prices (above, in general) are down to 2011 levels while salaries have not increased.
In Malaysia, the threat of an imploding 1MDB has sent the Ringgit down to 2.80 against the Singapore Dollar.
In 2010 and 2011, I mentioned in a previous report that if Malaysia didn’t tend to its debt woes with the utmost seriousness, this cancer will see the country go broke by 2015 and become a sovereign debt country, like Greece, by the year 2018.
So far, the prophetic view of that report seems to have hit the mark with uncanny accuracy. In March this year, when the Ringgit was at 2.65 against the SGD, I said that I wouldn’t be surprised to see it at 3.00 against the SGD by the end of 2015.
Even as I write this, the Ringgit continues to fall against the SGD. The Malaysians are really having a tough time of it if my recent visits to their deserted malls are saying anything about the state of their economy.
And the worst is yet to come.
July is the start of quarter three and is the best month in the worst quarter of the year. Having said that, it is also the most volatile month of the trading year. The three months of Q3 are extremely varied with July reputed to be the most volatile, August being the most bearish in the last 20-plus years with no reliable patterns and September, known famously for having the lowest volumes of any month and the most bearish of the calendar year over the last 80-plus years.
July 2015 has 22 full trading sessions and one public holiday (Friday on 3 July). July is known for its volatility with huge swings either way. It is also the start of the third earnings season of the year when companies are known to pull back on their guidance and become conservative about their outlooks.
- The first trading day of July is the most bullish having been up on the DOW 20 of the last 25
- The second day immediately becomes bearish
- Friday 3 July is a trading holiday ahead of Independence Day – Markets Closed
- Saturday 4 July 2015 is Independence Day
- The Monday after Independence Day is usually volatile
- The second week is usually bullish but can be volatile as earnings season begins
- The third week (Expiration Week) is prone to wild swings
- Monday of July Expiration Week has been bullish on the DOW 8 of the last 11
- July Expiration Friday is bearish with DOW going down 9 of the last 14
- The volatility from week three tends to carry into week four and gets worse
- The start of week four is reliably bearish
- The Friday of week four is bullish
- The last day of July is traditionally bullish but down on the NASDAQ 7 of the last 9
Key Economic Dates
- Wednesday 1 – ISM Manufacturing PMI
- Thursday 2 – Non Farm Payrolls, Unemployment Rate
- Monday 6 – ISM Non-Manufacturing PMI
- Tuesday 7 – Trade Balance, G8 Meeting
- Wednesday 8 – Fed Meeting Minutes
- Wednesday 15 – PPI, Fed Chair Janet Yellen Testifies
- Thursday 16 – Philly Fed Manufacturing Index, Fed Chair Janet Yellen Testifies
- Friday 17 – Building Permits, CPPI
- Tuesday 28 to Wednesday 29 – FOMC Meeting (2 days)
- Wednesday 29 – FOMC Fed Fund Rate Policy Statement at 2pm EST
- Thursday 30 – Advance GDP QonQ
- Crude finds support in late June/early July
- Nat Gas is good to go long around mid month till mid October
- Gold and Silver finds some strength in July till October
- Soya stays weak and tends to bottom in July
- Wheat maintains its seasonal strength
- Corn traditionally stays weak in July but is known to make sudden rallies depending on the weather
- Cocoa tops out and reverses down towards the end of July
- Coffee stays weak
- Sugar gets choppy because of harvests in Brazil and India
Stay on the safe side of the trade and remember that besides being in a market threatened by bears, we’re also heading toward August, September and October, traditionally the worst months of the year for the bulls. Be warned and Happy Hunting Always.
I did it! I finally did it after 23 years … I went on my second honeymoon! I won’t bore you with the details but those who want to read about what it meant to me can catch up with it by clicking the picture below.
Along with the usual sights and cuisine, this trip meant so much more not only because it was my second honeymoon but also because I visited Waterloo exactly a month before its 200th anniversary …
… stood where blood stained the ground at Flanders Fields, Ypres, Passchendaele and where LTC John McCrae wrote his famous poem … I got to visit Patton … and paid my respects to the 101stPIR at Bastogne.
I am finally living my dream of visiting all these amazing historical sites. It is truly awesome to be where all the action went down and realise how much sacrifice was made to give us the life we have today. I am so blessed to be able to do this and honoured to pay my respects to the many who laid down their lives for us.
Just to give you an idea of the many live that were lost, here’s a superb animated video of the numbers that made up the losses in WWII in both theatres of war …
Last year, it was Normandy on its 70th anniversary. This year was Belgium. Next stop, the Pacific.
On May 8, PTT77 got their final session of their nine-week Tutorial. It was a small batch but what they lacked in numbers, they made up in enthusiasm and energy.
After five gruelling sessions, the weekend batch of PTT78 finished their Tutorial on 29 May. This eager batch of traders really stretched my stamina, endurance and knowledge but it was all worth it and gratifying.
I want to wish each and every graduate all the best and much prosperity in the months and years to come. Welcome to our community! This is going to be a long and arduous journey but you are not alone in this. Happy Hunting!
And still the Doves stay resiliently firm on buying.
But what really scares me is the major divergence between the major indices and the Transports. While the S&P, NASDAQ and DOW have been (barely) in positive territory since mid-February, the Transports have been negative all year.
Its a simple fact – if the transports are weak, its only because the economy has slowed and there’s hardly anything to move anymore. You can’t have a healthy economy if your trucks, trains, freighters and planes aren’t busy.
June is the last month of Quarter Two and is a rather bearish month. Traditionally, this is more so if May had sold off. June 2015 has 22 trading sessions. There are no public or trading holidays in June.
- June starts out well with the first two days of the month being rather bullish
- The first day of June has been up on the DOW 19 of the last 26
- However, in 2008/2010 the first day has been bearish with 2011 and 2013 down -2.2%
- The first week of June ends very bearishly
- The second week is the exact opposite of the first – it starts bearish and ends very bullishly
- The Friday before expiration week is the most bullish day in June
- The Monday of Expiration Week has seen the DOW go down 10 of the last 17
- 17 June 2015 is FOMC Policy Day (14:00 EST)
- June Triple Witching Day (Expiration Friday) historically tends to be bearish but in recent years, it seems o have turned things around – DOW has been up 9 of the last 15
- The week after June Expiration has been down on the DOW 21 of the last 24
- Watch for Portfolio Pumping in the last week of Quarter 2 as fund managers illegally jack up the prices of their portfolio’s underperforming securities
- The last day of June has been bearish with the DOW going down 16 of the last 23 and down on NASDAQ for 6 of the last 9
- Crude’s strength tends to consolidate in June
- Nat Gas moves lower
- Gold stays weak
- Silver bottoms out
- Copper sees strength
- Soya tops out
- Corn continues to decline
- Wheat bottoms and turns up sharply in mid June
- Cocoa starts an uptrend
- Coffee continues its weakness
- Sugar finds a low and bounces into July
Things are really getting hot … and I am not just referring to the weather … and its looking like it will get worse. With bubbles all over the place – equities, properties, consumer prices, etc – it won’t take a lot to bring it all down like a house of cards.
Whatever happens, I am not going to discount the improbable.
Some time back, I made a posting on Facebook after the Liverpool vs Manchester United match and had a string of other comments that followed. Even my Mom got in on the action.
Followers of my postings on Facebook would have noticed that my Mom and I are rather tight and that we share a love for cooking, good food, humour and a host of other things including our foremost love for God.
This prompted several people to write me asking how come my family is so closely knitted from my Mom to me and me to my kids. My answer was;
Why is yours not?
I found it disconcerting that so many would ask such a thing when it should be the norm. To me, it was like asking, “Why did you slow to stop when the traffic light turned amber?”
Have we, as a society, become so dysfunctional that what is supposed to be normal is not normal anymore?
I believe we have. When once we were courteous and giving, today we are rude and selfish. When once we were conscientious and caring, today we really don’t give a f**k unless we have something to gain by it.
What have we become?
More importantly, WHY have we become like this?
Family values have eroded, no, they have totally lost their way. Respect for your elders no longer exists. Children used to be seen and not heard but now they make themselves heard more than their parents and use it as a weapon to gain what they want. Siblings who loved and cared for their parents in the past now have become bitter and vengeful rivals for their dying parents’ legacies.
Is it about the money? Did society breed all this hate in us? Did the nation’s growing wealth make us greedy and selfish? Has the government failed in raising its citizens right? Have we become so spoilt that its normal for Maria to haul boy-boy’s military full pack? Did we become so ignorant that we blindly trust our government to take care of us when we’re overspending on things we don’t need? Have we become so naive that face and pride precedes common sense?
Are we doing the right things because its the right thing to do?
Or have we mistaken what is actually wrong for normal?
As much as most of you would like to point a finger and blame rather than accept your own failure, the answer is not in the past or what could have been.
It about what we do now to shape the future.
I was raised on old-fashioned family values and I have raised my kids the same way;
- Little children should be seen and not heard
- In an adult conversation, children should only speak when spoken to
- Respect your elders
- I was raised to have good manners – “Please”, “Thank you”, Excuse me”, “No, thank you”, “May I … please”, etc.
- Think of and put others before yourself
- Make Home a special place where children will always feel safe and wanted (Their room should never be a place of punishment)
As they become teenagers;
- Be their best friend
- Groom them in social etiquette and behaviour
- Take an interest in their school matters, hobbies and pastimes
- Spend quality time as a family
- Teach them humility, frugality and graciousness
- Show them proper financial management
- Make Home a place where they are always welcome and loved (The house should not be a place of dread and remorse)
As they become young adults;
- Respect their goals and wishes
- Support and path them properly
- Make them responsible for their choices
- Let them take hard knocks but be there to catch them when they fall
- Allow them their freedom and prepare to let them go
- Leave a door open in case they need to come Home
Communication is key to healthy relationships. This is even more so in a family. Most grievances within a family can be attributed to a lack of communication and a lack of understanding. Family time is the best time to communicate. Mealtimes like lunch and dinner, whenever possible, should be done together at a proper dining setting (not in front of the TV). The table should be filled with conversations (not mobile coms and tablets). Conversations should be about the children’s interests and adult’s advice (not complaints, grumbles and quarrels). Everyone should have a chance to speak and everyone should listen to whomever is speaking (this is mutual respect). Such occasions always bring the family closer.
Have a fear for God in whatever name you call Him – this is called having a conscience. If you are not religious, then believe that there is always a greater force, a higher authority that will rule and judge us. It is imperative that the family is raised knowing the difference between good and bad. The parents must lead by example. Thus, if you’re going to be a parent or if you are already a parent and you have been shithed without realising it, don’t be surprised when your kids start behaving like you. If you ever ask, “what’s wrong with my kids?” or “why do my kids behave like that?”, all you have to do is look in the mirror for your answer. If you’re going to blame your spouse for that, look in the mirror again. Then get your spouse to do the same.
What goes around, comes around. This also means that if you raise your kids as spoilt, disrespectful and rude brats, you are going to be the biggest victim of what you sowed. These shitty kids will grow up and could care less about their parents (because that’s how they were raised). This is why so many young adults these days see their parents as burdens. Remember that if you expect your kids owe you a living, what are you doing for them today to build that credit?
Respect is earned, never an entitlement and certainly not a given. As parents, you earn the respect of your children by respecting them. By spoiling your child and allowing them to wail for whatever they want is disrespectful to you. When you give in to their demands, you are not earning their respect – you are just goading their greed. When they eventually learn that you can be taken advantage of, they will forever disrespect you because you don’t even have respect for yourself by giving in to someone else’s demands. Let the child know who’s boss. This starts at a very young age. Once they know you’re the boss, they will seek protection, comfort and love from you because you have earned their respect. They will trust you. They will seek your counsel. They will love you unconditionally. However, this does not mean to rule by fear. Fear breeds hate. And hate breeds separation. The child must know that behind every tough decision is a reason of love.
It may seem archaic and middle ages. Sometimes other kids think that my kids are uncool. But then, it did raise the question of how come my family is so tight. The fact that people of all ages are asking the same question proves that being a tight family is cool and having family values rock. Even my children’s peers are saying that my kids have a cool family.
The lamest excuse any parent can have for not doing these things is that they have no time. But there’s always time for the iPad and smartphones. I see that all the time – families out having dinner and everyone is on some electronic device instead of sharing a conversation and enjoying quality family time. Some parents even go to the extent of distracting the little one with the iPad so that they are not bothered by the child’s whims or cries for attention.
It all starts when they are old enough to see. That’s right. From the moment the child opens its eyes, they see and learn. Parents set the way the child will grow and learn. Thus the way your child behaves is a direct reflection of who you are as a parent. The sad fact is that such parents won’t take responsibility for the way their child has become and blame everything and anything else under the sun for their ill fortune for having such an ill mannered and badly behaved child.
Raise your child properly. You can be the biggest recipient of their upbringing or the biggest loser when karma comes knocking.
Although the market has been struggling to maintain a positive close above the year’s open, the $TRAN has been bearish almost all year. That is the sort of divergence that seasoned traders take special note of as the Transportation Index has been a reliable indicator of the economic health of the US economy.
This month, we break down the individual top components of the index to get an idea of what’s in store and if there are opportunities lying in wait if this market resumes its rally or when it comes down in the next correction.
Subscribers can download their copy here: Transports 2015
Did you see something flash by in a hurry? I swear it was April – it has come and gone in such a hurry. I don’t remember much of the month as it went by so quickly but I did post one major personal accomplishment that made me feel great to be over Fifty;
For the first time in 31 years, I managed 2.5km (50 laps, freestyle) in under an hour (57:54). On top of that, I kept my weight below 65kg since half a year ago and maintained a BMI of 23.45kg/m2.
For those not in the know, after being sick for so many years and having gone through four operations in three years between 2011 and 2014, it means a lot to me that I am fit and back in shape again. I have always maintained that wealth without health is meaningless. So to be able to walk the walk about the talk I talk really means the world to me. I hope that I can influence a few more people to make the effort to take care of themselves instead of wallowing in their “ill” fate that “life cruelly inflicted upon them”.
I’d rather be thankful for what I have. I make do with what ever has been dealt to me. I work at getting the most out of any situation I find myself in. I always look for opportunity in adversity. Then I pray for those who are also down and encourage those who have suffered similar fates.
Life is too short to get depressed or angry or sad about things that don’t work out. Use those energies and channel them into something useful.
I’ve noticed a massive pick up of Gurus in the market here in Singapore and Malaysia. The growing number of financial courses are more than I can remember since 2007. It seems that a lot of young traders have become massively successful in the last three to four years and are now preaching their style of trading and investing to inspire others to become “financially free” and become a “millionaire” and to live the life of their dreams.
I’ve said it before so I won’t bother to say it again. You can read it all here.
All I will say is that after more than nine years of teaching, I am still doing what I do while seeing so many others fall by the wayside. Some give up on the business because its tough and gets boring. Others fold because of scandals, suits and bad reputations. Most closed down because their students became jaded, disillusioned and eventually learnt the truth about what real trading is about … the hard way.
The ones that really lose out are the students who are now left without a teacher to guide them and support them anymore especially at a time when guidance and support is needed. Its just like Dr Alexander Elder said in his best-selling book, “Trading from a Living“;
A new market cycle guru emerges in almost every major stock market cycle, once every 4 years. A guru’s fame tends to last for 2 to 3 years. The reigning period of each guru coincides with a major bull market in the US.
“When the guru’s forecasts stop working public admiration turns to hatred.
“An old cycle guru never fully comes back. Once he stumbles, the adulation turns to derision and hatred. An expensive vase, once shattered, can never be fully restored.”
Those who survive aren’t really interested in teaching anymore as they get their underlings to teach on their behalf, some hire professional sales-people to sell it for them and the support is handed over to other underlings to manage. Most survivors aren’t even teaching what they taught more than four years ago because they’ve had to change their hype to be able to sell it and thus, change what they teach to match the hype.
I love to teach and I am hopelessly passionate about it. My longevity in this business is my testimonial. That I alone sell my class is proof of my dedication. I, more than anyone else in my community, support my graduates even after nine years. I create and innovate my own ideas and blaze a trail that every other competitor in the business has modelled and copied in one way or another.
I have what most Gurus don’t – a PASSION to do what I love and a HUNGER to teach those who want to learn. And that’s why I am still teaching after nine years and doing practically the same things since I started without having to hype it up. And I still do it with the same enthusiasm and dedication as I have done all these years … although the energy has waned a little since I am older now.
To the new Gurus who have emerged from the recent bull run, I wish you good luck and much prosperity. I also pray that you teach what’s right and put your students ahead of your own interests.
On the weekends of Friday 10 to Monday 13 and Friday 17 to Sunday 19 April, PTTMY29 got their Tutorial in Kuala Lumpur. Now they begin the task of putting it all into action during the eight-week Tutelage.
This was a small but energetic bunch and we had a lot of fun in our first Tutorial at our new facilities in Solaris, Mont Kiara.
Four months of trading and the market hardly sees much of a gain. The DOW close out the month with a 0.097% gain for the whole year while the S&P fared slightly better a +1.31% for the year.
On Thursday 23 April 2015, NASDAQ broke to 15-year highs, surpassing its Dot.com Bubble high close set in March 10, 2000. The tech-heavy index closed out the month with a modest gain but is still the best performing index with a +3.8% gain for the year.
All three benchmarks closed out the month below all their major moving averages (10, 20 and 50) while their 200DSMAs loom closer with each passing session.
The VIX seems to have completed a breakout from its Descending Triangle and looks set for more upside going into May. It briefly broke above its 200DSMA on Thursday 30 April before closing lower. It remains above its 10, 20 and 50 DSMAs.
What’s really becoming scary is the disconnect between equity flows and the major benchmarks. The flows out of equities is something not seen since 2009 before the market went negative for nine months in 2010.
Another major disconnect is the relationship between the Industrials and Transports. It is quite well documented that I am a believer of the Dow Transports and what I’ve been seeing this year tells me we’re in for some major volatility.
As of Thursday’s close, the Transports are now two days under its 200DSMA with a -5.98% loss YTD.
May 2015 has 20 trading sessions and one public holiday. May is notorious for having the year’s most fearsome correction. Some Mays in years past (most recently in 2012) are known to wipe out the whole year’s gain in a single month. May starts well but almost immediately goes into one of the most bearish weeks on the trading calendar.
- The first trading day of May has been up on the DOW 12 out of the last 17
- The first two days of May are the month’s most bullish days
- The next three days are the most bearish
- The second week of May tends to be more bearish than the first
- The Friday (8 May) before Mother’s Day (Sunday 10 May) has been up on the DOW 13 of the last 20
- Expiration week tends to be a little bullish
- The Monday (11 May) after Mother’s Day has been up on the DOW 15 of the last 20
- Monday (11 May) before May Expiration has seen the DOW gain 21 of the last 27
- May Expiration Friday (15 May) has been down on the DOW 14 of the last 25
- The week after Expiration Friday tends to be bearish
- Friday (22 May) before Memorial Day (Monday 25 May) has seen the DOW go down 8 of the last 14
- Monday 25 May is Memorial Day – Markets are closed
- The day after Memorial Day (Tuesday 26 May) has been up on the DOW 20 of the last 28
- The week following Memorial Day has been down on the DOW 11 of the last 18
- May tends to end well but has been down on the DOW 10 of the last 18
- Oil tops out in May and starts a downtrend
- Nat Gas also tops out but tends to consolidate in May
- Gold sees weakness
- Silver tends to peak and reverse in Mid May
- Copper usually makes a correction in the middle of the month
- Soya tends to peak and start declining
- Wheat continues its weakness
- Corn consolidates in a sideways fashion
- Cocoa also consolidates
- Coffee weakens
- Sugar consolidates at the lows
So we go into May without much to lose as there hasn’t been much to gain all year. Earnings continue to roll in and set a dovish tone about the last quarter while guidance has not been all that rosy going into the next. The market, meanwhile, struggles to anticipate the Fed’s next move as the economy doesn’t present a solid case to keep rates low. The bad news in the economy has been good news in the market but this can’t go on forever as the speculation dries up. The reality of the pain in the street will become more and more apparent and the greed in the market will cave in under this pressure.
All the while, life goes on – Oil makes its seasonal run and looks set to get up to $60p/b within the coming week, German Bunds continue to offer negative returns, Brazilian interest rates get up to 13.25%, the Arabs take it to the Yemenis, the public in Baltimore take it to the cops, Mother Nature takes it out on Nepal and on Saturday, 2 May, Pacquiao takes it to Mayweather.
Have a great Labour Day Long Weekend everyone!
“Riding The Rate” is my latest article featured in The Business Times’ BTInvest.
Read the full article here: http://einvesthub.btinvest.com.sg/markets/2015/04/13/riding-the-rate/
The month of April is the most bullish month of the trading year and marks the end of the “best six months on the Dow and S&P500”.
But the run will continue on the NASDAQ as tech issues usually run up the charts till June.
This month, we’re looking at the backbone of the tech sector from which all the magic is born – Semiconductors.
Subscribers can download their copy here: Semiconductors 2015