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Busy, busy, busy … That’s what March 2014 was all about for me. Week after week, one thing after another and on top of the usual brouhaha, I had a book launch.
On Monday 10 March, I did a talk to the WA Investor’s Inner Circle and got their record biggest crowd for any of their gatherings. We had fun and learned how Macroeconomics can give Investors an edge in their positions.
On 12 March, we completed the very first batch of the Options Tutorial (Module 1) conducted entirely by Wong Chen Pang. Congratulations to our inaugural batch of 31 students. And well done to Chen Pang for a most impressive first-time performance!
He then went on to complete his first Options Bootcamp on the weekend of 28 to 30 March.
We’re now working towards bringing this amazing workshop to our graduates in K.L. by May this year.
Then on 21 March, my fourth effort as an author and second solo effort was made public at the Official Launch of “Winning Psychology of Defensive Traders“.
The event kicked off at 1700 hours at AKLTG’s Trainings Centre. More than 300 people attended the launch. The pictures were posted in the previous posting here:
The book should be hitting the shelves within the coming week. If its late, its not my fault!! I’ve already delivered the lot!
The Pattern Trader also officially launched their new website, www.patterntrader.com, boasting a host of new attractions like financial and economic articles, newsletters, market updates, trading products and on-line tutorials.
At this time last year, I mentioned that the PE Ratios in the market were getting scary …
- DOW: 15.95
- NASDAQ: 17.05
- S&P500: 18.35
- TRAN: 20.75
- UTIL: 25.03
- Russel 2000: 34.88
Today, those ratios are now;
- DOW: 15.89 (UNCH from a year ago)
- NASDAQ: 21.15 (Up)
- S&P500: 17.69 (Down)
- TRAN: 17.50 (Down)
- UTIL: 21.33 (Down)
- Russel 2000: 74.88 (Up)
The NASDAQ and Russel 2000 are up in divergent fashion. Ordinarily, it won’t be so worrying to get some divergence amongst the indices. However, when the Russels start gaining that much (+114.68%), it tells me that fear is back on the table. The VIX is showing that kind of fear yet but it has been on a steady rise since the start of the year and that alone is hinting that something fearsome is afoot.
Things are now going to get really confusing – January 2014 wore a Bearish January Barometer which conflicts with a Bullish December Low Indicator. If historical behaviour is anything to go by, such conflicting signals have often brought on much volatility as was the case in 2010 (until QE2 in October 2010) or in some rare cases, a very flat and bearish market for the rest of the year.
The S&P500 is barely positive for the year at noon of 31 March while the DOW is still in the red.
NASDAQ is practically unchanged at +1% YTD. The NASDAQ sits below its 10, 20 and 50DSMAs while under a 10/20 Deathcross. At this rate, its 10DSMA will cross below its 50DSMA within a week.
April is reputedly the most bullish month of the calendar year with an average gain of 2% since 1950. The last eight years were up, including 2008, with an average gain of 3.4%. April is the first month ever to have seen a 1000 point gain on the DOW in 1999.
This April 2014 has 21 trading days and no one public holiday. It is the start of Quarter 2 and the beginning of Earnings Season for Q1 results. April is also the last of the “Best Six Months” on the DOW and S&P500.
- The first trading day of April is the most bullish of the month with the DOW up 15 of the last 19
- The first four days of April make up the most bullish week of the month
- The second week starts out weak but ends strongly
- The third week starts strongly and stays bullish
- The Monday before April Expiration has been up on the DOW for the 17 of the last 25 but down 5 of the last 9
- Thursday 17 April is Expiration Day
- April Expiration Friday has seen the DOW close up 14 of the last 17
- The day before Good Friday has been up on NASDAQ 13 straight years
- Friday 18 April is Good Friday – Markets will be closed.
- The fourth week starts well but is prone to weakness in mid-week
- The week after Expiration Week starts bullish but ends bearish
- April 29 is FOMC Meeting (2 days)
- April usually ends well
- Crude continues rallying into mid-May
- Nat Gas tops out in mid-to-late April
- Gold declines a little in April
- Silver also falls till the third week of April
- Copper strengthens and tops out at the end of April to early May
- Soya and Corn stay strong
- Wheat stays weak
- Cocoa’s decline from March continues into April and bottoms mid month
- Coffee stays strong
- Sugar remains weak
With the market showing signs of being very toppy and economic data indicating a slowing to the American recovery, Janet Yellen’s tapering plans are taking a slow but sure grip of greed and making investors very nervous. Bond yields are indicating that fear may be creeping back into risk and although April, with all its bullish reputation starts tomorrow, I cannot but be extremely cautious in these conditions. Too many familiar signals are in place and way too many “noisy” factors are telling me to take it easy.
So I will.
With a weekend batch in K.L. this coming weekend and my book launches slated for 24th and 25th April in K.L. and Penang respectively, April is going to be a busy month too. That is good enough reason to take it easy and trade cautiously.
Thanks to Soon Ghee for the great shots!!
February was a really short month and given that Chinese New Year took up the first two weeks of the month only served to quicken the shortest month of the year. And for that reason, February was a packed month for me. This was tough on my left foot (surgery) which had hardly any time to fully rest to recover. Within the second week after surgery, I had a class, a preview two days later and a trip to KL for a preview that weekend. Tough. And painful.
Two weeks into my recovery from a foot surgery, the whole gang came over to my place on Saturday 8 February for Chinese New Year. (Yes we gambled … we’re Traders after all) It was a rowdy and noisy affair but boy, did we have a boat-load of fun! The picture doesn’t do the event justice because 40% of the bunch were missing when we took it.
On 21 February, Jay Tun and Jason Lee hosted the Gathering to share techniques on weekly swings and money management. It really is heartwarming to see these two young men taking the stage and commanding the attention of a crowd that is largely older than them. They have really come into their own and made me proud.
After a hard night’s work, there nothing better than a hearty meal with some good laughs around a table of like-minded friends. (Jason took the pic that’s why he’s missing from it!)
On Wednesday 26 February at 12:45am, WAT70 completed their 8-week tutorial. In spite of the timing, I am very proud of this group for staying bright eyed and bushy tailed at that unearthly hour. Some even stayed back to complete their assignments till 1:30am. What a bunch of winners!
To conclude the story of my left foot, it is fine now at the end of February and I am walking (almost) normally again. The pain is totally gone and most of the stiffness is also gone. I am back to working out and swimming again and life feels like its back to normal … finally. Best of all, my left foot is free of the bunion and I can buy shoes again!!
After the most bearish January since January 2009, the S&P500 bounced back and broke a new intraday high record in February while the NASDAQ clocked more new historical highs.
The DOW, however, stays mired in red for the year.
The U.S. lowered its GDP in view of stagnating data across its economic front. Employment also gave the recovery story a few chinks while manufacturing, housing and consumer sentiment provided a mixed bag of numbers that don’t make for great confidence.
The market has been an unusual one for February which is normally flat-to-bearish. This has been one of the most bullish Februarys after an unusually bearish January I’ve experienced since I started online trading. Looks very much like 2014 has abandoned tradition. Now I wonder what March and April will bring …
March has a total of 21 trading sessions. March is known as a bullish month especially towards the middle of the month. March starts well and can end poorly. It is the last month of the first quarter and is known for its December Low indicator where if the market closes above the low of the previous December, the year is likely to end higher and vice versa.
- The first trading day of March has seen the DOW go down 4 of the last 7
- However, it was up 9 out of 11 between 1996 and 2006
- The first week of March tends to swing wildly
- The third day of March tends to be very bullish.
- Sunday 09 March 2014 – Daylight Saving Time Begins. U.S. market will open at 21:30SG.
- The second week of March is usually mildly bullish and uneventful
- The Monday before March Expiration Friday has been up on the DOW 19 of the last 26
- The third week of March is the month’s most bullish week.
- Wednesday 19 March sees FOMC Minutes at 2pm EST
- March Expiration Friday has been mixed in the last 12 years – DOW down for the last 4 out of 5
- The week after Expiration Friday has been up 6 of the last 10 but has been down 17 of the last 26
- The fourth week is rather bearish
- The last session of March has been down on the DOW for 15 out of the last 25
- Crude strengthens in March and starts the best seven months on the black commodity
- Nat Gas also stays strong
- Gold bottoms in March and strengthens
- Silver continues its February weakness till April
- Copper moves up in March and April
- Soya is strong
- Wheat and Corn continue the declines
- Cocoa tops out and starts weakening
- Coffee corrects
- Sugar also stays weak
Its finally done and rolling on the printing presses!!
The official launch date for the book will be on 21 March 2014, 7pm at AKLTG’s Training Centre. We will thereafter launch the book in KL (venue T.B.C.) in April (tentatively on the weekend of 18 to 20 April) and Penang (tentatively on the weekend of 25 to 27 April). The events will include the official launching of the book with book signing sessions and an hour-long talk about trading psychology. (Detailed timing will be available later in the month)
This will be the highlight of my last four years’ work and I am praying hard that this will outsell all my previous books because I put so much effort into this project.
March promises to be a packed and exciting month for me and I am getting more and more anxious with each day that passes. It can’t happen fast enough.
We’re coming into a period where the food industries tend to start running up the charts. In this report, we’ve listed the biggest cap companies from the Staples (Food) Industry that is in the middle of its earnings season.
And as usual, we’ll review and preview the markets in the U.S. and Singapore. Now that the January Barometer is in effect, it looks like its going to be an extremely interesting year as we move into 2014.
Apart from my left foot surgery to remove a decade old bunion, January 2014 was quite a mundane month for me. Batch 70 got underway in Singapore on the very first week, I did a talk to 600+ McQuarie clients and Jay did a Gathering in KL. The highlight of the month must have been our special guest at the January Gathering, Gracy Yap who wowed us with her numerology theories.
We also went to watch “The Wolf Of Wall Street” in our biggest movie group to date!
Oh! And of course … the book is almost there. We’re inching our way to the finish line and we don’t want to overlook anything because this books means the world to me. We’re getting there and we’re looking at a probable mid-Feb book launch.
As far as the foot is concerned, the pain has subsided and the swelling is almost all gone. Today, I was able to walk without the aid of the tongkat although it is still a little tender in certain areas. On Friday 7 February, I get the stitches out and get my life back again. It will be nice to feel absolutely normal again.
January closed in a bearish Fifth Monthly Candle Reversal.
Looks like the market is going to be in for a rough 2014. Last year’s Self-Fulfilling Prophecies haven’t boded well for this year; Christmas sales for 2013 have been one of the most disappointing in years, the first five days of January were down and January, as a barometer, closed in the red.
Believers of the January Barometer may take interest in this;
The S&P500 also closed its January to the downside after its first five days were also down giving us these probabilities;
The U.S. economy, on the other hand, is still mending slowly and surely but remains a serious laggard in comparison to the market’s indices. The country’s GDP recorded an uptick of 3,2% for the fourth quarter of 2013 while the Fed trimmed its monthly asset purchases to $65 bln. The most notable hawkish data was the glaring contraction of its Chicago PMI to 59.6.
Singapore’s STI, on the other hand, is mired in red. For more than five months now, it has been stuck under its critical 200DSMA, confirming that Singapore is officially and technically in a bear market.
The country’s growth has also been stifled for more than three years now. For the fourth time in five years (since the end of the Sub-prime crisis), the Little Red Dot’s GDP recorded a consecutive contraction into negative, effectively putting the economy into a technical recession again.
This comes as no surprise as property prices fell in December and consumers slowed their purchases of automobiles. However, despite the falling prices, inflation remains near record highs.
Early signs of a weakening economy have starting rearing their heads with companies shutting down and defaulting on their loans/obligations as well as the growing trend of job losses. And to make the situation worse, the Little Red Dot is sitting right smack in the middle of an Emerging Market Meltdown.
February 2014 is one of two of the shortest trading months of the year (the other is November) with only 19 trading sessions and a public holiday. February usually opens well but finishes poorly.
February is the worst of the three months in quarter one and tends to be flat-to-bearish is most years past. The month is also known as “the weakest link” in the best six month on the DOW and S&P from November to April.
- The first day in February has been up on the DOW and S&P for 10 out of the last 11 years, NASDAQ up 9 years in a row
- The first week starts well but ends poorly
- The second week start poorly but ends well
- The week before Expiration Friday (4 to 8 Feb 2013) has been down on the NASDAQ 9 out of the last 12 but 2010 and 2011 was up 2.0% and 1.5% respectively
- The third week tends to be slightly bearish
- Friday February 14 is Valentine’s Day – watch for the VD Indicator
- However, the day before President’s Day (Feb 14) has been down on the S&P 17 out of the last 22
- Monday 17 February is President’s Day – Market are closed
- The day after President’s Day has been down on the S&P 7 of the last 13
- The day before Expiration Friday tends to be bearish
- Expiration Friday in February has been up for the last 4 years but down on the DOW 7 of the last 14
- The week after Expiration Friday has been down on the DOW for 10 of the last 15
- February ends poorly
- Oil bottoms in February and starts its seasonal bull run into April
- Natural Gas stays strong
- Gold and Silver turns downward in February till mid-March
- Copper strengthens in February if Gold and Silver turn down
- Soya and Corn advance till May
- Wheat weakens in February
- Cocoa consolidates while Coffee makes modest gains and Sugar tops out in February
Now we usher in the year of the horse and with it, an American market at the threshold of change and a local economy on the edge of falling off a cliff. Whichever way it goes, I am going to be ready for it and will be taking every opportunity it offers.
Let’s get the new year off with a big bang by looking at some of the most affordable opportunities that I think will be good bets for 2014.
They come from several industries that I suspect will be big winners this coming year as America continues its slow and steady trudge to recovery. They include two metal producing companies, two homebuilders, three energy related issues, two shipping companies, two communication stocks and two retail companies along with one company each from tech, autos and finance.
And as always we’ll review and preview the markets in the U.S. and Singapore to see what the economies hold for us going into 2014.
Just like that, 2013 has come and gone. All in all, there was little to gripe about and much to celebrate as far as I was concerned. It wasn’t a great year by any stretch but I am grateful that it was bad at all. I won’t mind if the rest of my life’s years are like 2013 but I intend to make each one better than the last so here’s good luck and great fortune going ahead into 2014!!
WATMY25 graduated on 9 December in K.L. but they still have three more sessions before the finish the whole program.
The very next day, on 10 December, WAT69 completed their tutorial in Singapore.
On Friday 13, we had our 7th Christmas Gathering where Leon Koh shared his metaphysical view for 2014.
I then capped off 2013 with a visit to New York with my family. We stayed with Calvin Lau and his brother William and his girlfriend, Wei Wei who were great and patient hosts. We had a blast in spite of the freezing temperatures and we’ll do it again for sure.
At the start of January 2013, I mentioned;
If current indications are anything to go by, 2013 should end higher but I suspect it will be a rocky ride. Get ready for some volatility but I don’t think it will be as rough as 2010. Look to the East for leading indications. China is expected to pick up the pace in 2013 and if they do, markets all over should get some respite. Be mindful of the impending technical recession in Singapore. How badly it affects the man in the street is yet unknown. It could be a non-event like 2008 but let’s not get complacent and stay on the safe side of financial management.
In the U.S., it looks like we got our Santa Claus Rally which puts some relief in the minds of investors for 2014. We do, however have three sessions left to go before we can count our chickens.
2013 has been a fabulous year in the U.S. market. The S&P 500 ended the year with a 29.6% annual gain, its biggest yearly gain since 1997. The Dow Industrials rose on the last trading session to mark its 52nd record close of the year to end at 16,576.66. The mega caps ended 2013 with an annual gain of 26.5%, the largest since 1995. The Nasdaq Composite advanced 0.5% in its last session to end at 4,176.59 for its highest finish since September 2000. The tech-heavy index rose more than 38% over the course of 2013, making its biggest gain since 2009.
All things considered, it was a shaky year with Oil threatening to make multi-year highs, gold falling to its lowest level since August 2010, threats of tapering, rate hikes, a government shut down, sugar, corn and wheat falling to their lowest levels since June and August 2010 and May 2012 respectively. All this while the dollar struggled to stay above 80 on the dollar index and the economy continued to eke out improvements in manufacturing, exports, housing and employment. The recovery has been slow and muted but there is a recovery.
Investors are expecting a rough ride in 2014 and for gold to stay low while traders are expecting a long overdue correction. Personally, I think we’re going to get a muted first half of the year while the second half should see the market make better gains. The January Barometer is going to be a key factor in determining whether this market makes gains this year or if the Fed will need to dip deeper into their pockets to keep this market alive.
Singapore’s market, on the other hand, has had a woeful year …
The STI closed out the year in the red for the third time in the last six years (including 2011 and 2008). Strange how the mainstream media chose not to mention that fact at all …
Inflation (left chart, above) has risen to record highs on the Little Red Dot while wages (above, right) stay on the low side of the annual range, at 2008’s high levels, effectively putting wages at unchanged since January 2008. This has caused considerable strain on the man-in-the-street and widened the gulf between the rich and the poor. The “poverty line” (people earning below S$1,500 a month) which we’re not supposed to have has become more obvious as more and more fell below that line in 2013.
Businesses are starting to get hit by the high costs and rentals with its latest high profile victim being the Banquet Food Court chain. Housing prices are also stalled at the top with COVs dropping to at-valuation and below valuation levels. All signs that the economy is not having a good time. I reckon 2014 is going to be a stretch for some of us as the economy drags its ass to another conservative growth year, expected to between 2% to 4%.
January 2014 has 21 trading sessions and two holidays. January is usually a bullish month and is famous for its January Barometer prophecy – “As goes January, so goes the year”. This implies that is January closes with a gain, so will the rest of the year. But if January closes with a loss, we’re in for a tough year.
January is the last month in the “Best Three Consecutive Months” in a trading year – November, December and January – that has seen the DOW make gains 15 of the last 20 years.
- January 1st is New Year’s Day – Markets are closed
- The first trading day of the year is usually bearish. However, since 2009, the first trading day has been one of the most bullish days in January.
- The second trading day has seen the DOW go up 14 of the last 20
- Santa Claus Rally officially ends on 6th January
- The second week of the month is quite bullish
- Expiration week in January is quite bearish with the DOW down 9 of the last 15 (last year was bullish)
- The Monday of January Expiration Week has been down on the DOW 15 of the last 21 (last year was bullish)
- January Expiration Friday has been down on the DOW 10 of the last 15 with big losses
- Monday, January 20 is Martin Luther King Jr. Day – Markets are closed
- The day after Martin Luther King Jr. Day is usually bearish
- The last week of January is mildly bullish
- January ends very bullishly
- Oil maintains some strength
- Nat Gas continues its weakness with a bottom in February if it doesn’t get too cold in January
- Gold and Silver tend to peak in December and weakens by mid-January. Go short in February
- Copper strengthens
- Soya tops out in late January
- Wheat continues its weakness
- Corn consolidates
- Cocoa continues its strength from December
- Coffee consolidates at the top
- Sugar shows mild strength
So bring on 2014 already … its time to start making money all over again and build the account for seventh year out of bankruptcy. That’s a magical number for bankrupts, by the way; its the year they get out of financial jail – something unconstitutional that was installed by the banks – and be able to get loans, credit cards, open Fixed-Ds, etc … something I’ve not had the freedom of doing and something I never needed to do anyway. So why are we talking about it?
Happy New Year everyone!
Here’s an excerpt of the final part of my new book, “Winning Psychology of Defensive Traders”, so that it gives you something to be motivated by while waiting for its release in January 2014 …
In closing, allow me to share some personal experiences that have seen me through the toughest times of my life and helped me to achieve every success I have today.
It’s called Passion.
When we’re passionate about what we do, we begin enjoying it and when we’re having fun doing what we love, we excel. Passion keeps us motivated and pushes us relentlessly to achieve that level of excellence in whatever we set our minds out to do.
However, passion alone is never going to be enough. The other ingredient for success is Belief.
If passion motivates us, then belief drives us. In believing in ourselves, we are more likely to achieve the goals we set and the dreams we visualise. It is this belief that makes our expectations of our dreams and goals realistic. It drives us to make those expectations real and then drives us beyond those targets.
True success never happens by accident and it is not an entitlement. It certainly is not exclusive if you believe it can happen to you and if you have the passion to earn it.
Plan your goals and make them realistic, measureable and specific. Your plan should have targets and deadlines. It should be based on things that you can do or are learning to do. The plan should not depend or rely on other people and must be something that you have total control over.
Once you’ve mapped out the plan to achieve your goals, begin visualising them by cutting out pictures or visual representations of those goals. Stick or paste them up in places where you frequently look such as your mirror, desktop, refrigerator, etc.
Now you have to make it work. By seeing your goals everyday, you are subconsciously opening up your mind to opportunities. By having planned your goals, you will be drawn to those opportunities to explore the possibilities. This sense of adventure is what will spur your enthusiasm and thus grow your passion. Believing that it is possible to achieve that goal will motivate you to take more action and this will in turn will produce results.
The results may not be exactly what you expected but any result is an achievement in the right direction and it is a small measure of success. The result may sometimes be a failed attempt but failure is only complete when we give up. If we persist and continue to get results, then failure is nothing more than a learning lesson that makes us stronger and wiser. This makes any success thereafter all the more sweeter to savour.
And success breeds more success as each action produces a result.
“Success belongs to those who work at it the hardest and believe in it the longest.”
And it is this success that pushes us to achieve greater things not just for ourselves but for others. Any measure of success means nothing if you are the only one benefitting from it. Success is sweetest when you are doing what you love not just for your own personal gains but so that those you love also can share in the joy of your success.
“Immortality is not about living forever, but about what you’ve done so that you are never forgotten”