October ’09 In Review – November ’09 Preview

Wow! What a month! Talk about intense.

More than 110 bank failures for the year, another major scandal (Galleon), record lows for the Dollar (75.26 on 22 Oct), record (year) high for Oil ($81.27 on 22 Oct), record high for Gold ($1,065.30 on 19 Oct), AAPL at a record high of $205 after another smashing earnings return and GDP numbers in the U.S. giving us a glimpse of bullish hope.

Amidst all this activity, I personally started getting very nervous as we approached the last week of October. And I made my fear known at many levels. Now I wonder if my fear was over-cooked or worse, not fearful enough.

Conrad,

During one of the tutorial sessions a month ago, I remembered that you mentioned that October 28th came out very vividly in your dream as being “significant”. Well, it is October 28thtoday and I must say that your ability to have such dreams is a gift anyone would like to have as well, given that the market seems to be tanking as I write this.

How do you actually do it Conrad? I’m amazed !

After months of paper trading, I bought a XXXX Nov XXPUT with real money – and it is making gains. Starting small. I  am getting a feel for what it means to be a bear …

~ Ran-Chi

Erm,  … a flattering compliment but seriously …

Dear RC,

It happens. I can’t figure why it does or how it happens … it just does. I don’t put too much purchase on this “gift” as I am someone who has to have everything quantified and this certainly can’t. But it happens and I won’t deny that it is reliable almost all of the time. Call it a gut-feel. But I suppose a lot of it comes from forming an analysis and from historical patterns that kind of tickles your gut. Then subconsciously, you dream about it.

Then there’s Law of Attraction. I am sure I am not the only one who saw this coming so maybe a collective “wave” of thoughts brought this attraction on. Who knows?

I am glad you made some money from your XXXX excursion. Remember to stay humble and take your profits when you have it. Curb the greed, stay humble and respect the market at all time. We are never better than it.

There were so many signs to say that this would happen. I mentioned it at the Penang TA Masterclass, in my Candlestick & Breakout Patterns Workshops, at the SG Gathering on 16th and in JKT on 23rd, I wrote this in the Pattern Trader’s Weekly Report and early this week, in Facebook too …

Extract from PT Tools’ Weekly Report dated 26 October …

… note that the NASDAQ is on its Eighth Candle now with one week left to go. Remembering what happened in February 2007 on that fateful “Shanghai Surprise” that ended the last two days of February in an Eighth Monthly Candle Reversal on the Dow and S&P500, I am not going to mess with the possibility of a major reversal on Tech this week.

And this is the posting in Facebook after Monday’s close – Bonds went funky, dollar spiked, VIX went through the roof, Tick made a new low, Trin made a new high and the market completed a Down Friday Down Monday  …

Posted Monday 18:30 EST (AMC)
Posted Monday 18:09 EST (AMC)

NASDAQ Had been bullish all through the month up till the close of Wednesday 27 October. NASDAQ was still well bullish at the start of the week and on Tuesday, I told my students about the Eighth Candle possibility with less than 4 days left in October. This made it quite ridiculous to consider that we would see a bearish monthly candle by month’s end. But here we have it even after it recovered some of its losses from yesterday … and we still have tomorrow to go …

NASDAQ 29 Oct @12:31 EST ... 8th Candle Reversal?

Such analysis is all well and good when they work out. Sometimes you get it spot on and you look like a genius. Then sometimes you screw up and look like an idiot. Thank God … He has been merciful to me and I have not ended up looking idiotic except for my dumb Oil call last year.

“It’s not about being right or wrong, rather, it’s about how much money you make when you’re right and how much you don’t lose when you’re wrong.” ~ George Soros

October has been an interestingly busy month for me but it still left me with much needed time to trade.

7 October saw the graduation of WAT Batch 33. Some of the “old hats” from 2007 and 2008 batches came back for their re-sits and it was really good to see them again.

WAT33 (Singapore)

On the weekend of 10 and 11 October, I had a blast in Penang doing the TA Masterclass. Since there was only Carol (from AKLTG MY) and myself, we didn’t get any pics of the event. But I did get this memorable snap of Danny and Boon Hoe from my Jan ’08 MY Batch02 whom I haven’t seen since they graduated. It was good to catch up again and know that they are doing well and “have made significant progress in our trading“.

Danny, me & Boon Hoe

Then on 16 October, WAT SG had their monthly Gathering. Andrew Tan gave us insights on Feng Shui analysis on homes and my new found friend Richard Martin, formerly of Morgan Stanley in the U.S. gave us the down and dirty of the U.S. economy.

The following Friday, 23 October, saw JKT get their Gathering where we did Scalp Night and what a night it was. Grads got a real lesson in live trading and got an experience of what it is like to be a real day trader on commodity futures. Oh … and it was a profitable outing too!

Finally, my crew at AKLTG threw a surprise for Lucy on the stroke of midnight (during class) as 28 Oct is my wife’s birthday. Happy Birthday, my love!

My very own “Chio bu”!

This Saturday, 31 October, is Halloween and is also my son’s birthday. How time has flown … my boy is a young teen now when just yesterday, he was a little tot on the back of my bicycle going to kindergarten. My regret is that I won’t be around for his birthday as I will be in Jakarta for Wealth Academy this weekend. But we do have Skype! Happy Birthday Timothy … next thing I know, he’ll be wearing green and carrying a rifle and bringing chics home!

Now we go into November … another round of massive birthdays and anniversaries, more public seminars, classes and another month in a really edgy and volatile market.

Rally or Tank?

Before we get carried away, let’s remember that the problems that plague America are not getting better. Another round of stimulus is on hold for now so what will this do for the market and the broader economy? The market has tanked to around 50% since the DOW’s last low at the start of October. Going back two previous lower lows before October, the market since mid August has now traced about 40%. Depending on how you look at it, we may return into an up-run on these technical bounces or tank past these supports to a much lower low. Double Dip?

While 10,000 has been a stiff one for DOW, the 1,100 has been S&P500’s bogey number. So it still remains to be seen if this upside GDP report will be enough to keep this rally going because now, deflation becomes a serious reality and signs are already showing that deflation is already live and well in America.

But that is a massive topic for another posting.

I’m off to Jakarta in the morning. So till my next posting, Trade Safe, don’t do anything stupid and Happy Hunting always!

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Comments

haaa…she is really “chio”,lol…happy belated Lucy, may all your wishes come true.

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