October 2011 In Review, November Preview

OCTOBER 2011 IN REVIEW

Mayhem. That’s what my schedule in October 2011 will be remembered for. Poor Queenie and Annie were scrambling to fix my topsy-turvy schedule after my September surgery put everything on hold for three weeks. As expected, I went on a marathon talking spree to catch up on all the postponements and ended up with only four off days and a public holiday to rest in the month.

But honestly, I can’t complain. I am truly thankful for the opportunities I have been given to share what I know. The demand has been overwhelming and I honestly don’t know where its coming from especially since I haven’t been in the press for more than three months now. It would seem that the lower I keep my profile, the higher the demand gets. It simply amazes me that I continue to do what I love to do and the students just keep coming in spite of my efforts to slow down. It is really a blessing and I am thankful that I can continue my educational crusade.

TUTORIAL & WORKSHOP HIGHLIGHTS

On 3 October, after a mind-crunching weekend, WATMY16 graduated in Kuala Lumpur. This was a tough gig as my ass was still not fully recovered and the plane ride was a killer on my gluteus maximus … and so was every car ride!

Then on Saturday 8 October, I did another gig at SIM to more than 70 enthusiastic investors-to-be and shattered their illusions about the market … well, its more like I put the reality of the business into their hearts. It was a wonderful session and I always enjoy educating the young.

On Friday 14 October, the Malaysians had their Mega Gathering at the Tropica Golf Resort. My guest speaker was none other than G.M. Teoh. So many of the old dawgs returned from four years ago and it was good to catch up with all of them again.

We had a really great Gathering at Klapson’s on Friday 21 October with many old faces returning and some leaving for good (All the best Hashok!) and one who came back to present his views on the market. Chris “The Mad Scientist” Yang totally blew us away with his market analyses which included reviewing sovereign debts, bonds, currencies, commodities, indices, floods and even solar flares! More than four years after coming to WAT, Chris and his trading group are still going strong including Mama (Eileen), Jimmy (in the U.K.) and Hashok (who has since left for New York). More power to you chaps!

Wealth Academy graduated another 80+ Investors from batch 29 on Sunday 23 October 2011.

Finally, on 31 October 2011, in celebration of the Pattern Trader Tutorial’s 5th Anniversary, we kicked off the Pattern Trader’s 30 Day Portfolio Challenge!

This Challenge is open to all Pattern Trader Tutorial (WAT) Graduates from Singapore and is organized by the graduates themselves. It’s strictly just for fun and traders will have no control over their portfolios at all except to pray that it ends up with the biggest percentage gain by 9 December 2011.

Naturally, they’ve banned me from this Challenge. I must protest.

MARKET MATTERS

Last month, I wrote;

Does the DOW look like its forming a Double Bottom? Could it be true that a rally back up to 12,800 may be on the cards by December? I’ll be happy if it just gets back up above 11,577.43, the opening price for the year, and not finish the year in the red.

But the truth of the matter is that it is more likely to finish the year on a sad note if there is no QE3. Even as I write this on Tuesday 4 October at 01:03am in Kuala Lumpur, the DOW is breaking below 10,800 and looking like it is destined for lower targets in the month to come. Here we go … 10,700 will be the key interest this coming week. A break below that is going to make for an excellent sell-down that should rival some of the tankers of October 2008. If the August and September ranges were any indication, we’re in for major volatility.

It is, after all, October – the anniversary month of all the major market crashes in history.

Immediately after I wrote that, the DOW made 1,200 points in less than two trading weeks and racked up more than 1,500 points for the month to close out at 11,900. What a comeback! As I write this, the market is now positive for the year after spending two and a half months in the red. Turns out that this has become one of those Octobers that becomes a Bear Killer rather than a Crash – a phenomenon where October pulls the market out of a bearish state and starts a bull run as it did 11 times before in the last 70 years in 1946, 1957, 1960, 1962, 1966, 1974, 1987, 1990, 1998, 2001 and 2002 when those Octobers turn a bear market around.

Now, on the back of a dilly-dallying EU solution, we go into a November that traditionally starts the best six months on the DOW and S&P500. Q4’s earnings have so far impressed and look promising for a bright finish to the year. Economic data in the US looks to have found some sort of bottom and looks likely to pull itself out of this four-year funk. The worry and main threats continue to be Europe and China – while one looks to avoid a recession as a result of a massive slow down, the other looks to avoid a crash as a result of a massive bubble.

What a mess.

Now with this amazing comeback, Q1 of 2008’s pattern comes into play …

… rather than the earlier possibility that I posted last month which is now obviously no longer on track.

Trivia For November

November has 20 full trading days and one half day and is known to be very bullish. November traditionally starts the best six months on the Dow Jones and S&P500 and the best eight months on the NASDAQ.

October Trivia
• The first trading day of November has been up only once out of the last 6
• Sunday 06 November Daylight Saving Time ends
• The first week of November is very bullish
• Monday 07 November, the market opens at 22:30 SG time.
• Tuesday 08 November is Election Day
• Friday 11 November is Veteran’s Day
• The second week is typically bullish with the occasional correction
• The Monday before Expiration Friday has been down on the DOW 7 of the last 12
• The week before Thanksgiving has been up 15 of the last 18
• November Expiration Friday has been bullish 7 of the last 9
• 24 November is Thankgiving Day (Markets Closed)
• 25 November is a Shortened Trading Day
• November’s last week usually ends well and is the most bullish week of the month
• November’s last day normally corrects

Commodities
• Oil remains weak but recovers mid month
• Natural Gas is flat depending on weather patterns
• Long Gold and Silver till end April/early May
• Copper stays bearish
• Corn starts its run, Wheat and Soyabeans end their run by month’s end
• Sugar tops out before the last week of November
• Cocoa and Coffee prices usually rally in November

SUMMARY

I am going to get November started with another round of surgery. This time, its for my gouty right foot. After the September surgery, the gout ballooned to record size and never subsided. Since then, the fluid in the swelling has been turning into soft tissue which is now starting to harden. The operation to remove it is necessary as it will have a long term effect on the foot’s skeletal structure. And I don’t want to be crippled for the rest of my life because of some damn gout. The surgery shouldn’t be as dramatic as the one in September but I am expected to be laid up for two weeks.

Some of my students and friends believe I am looking forward to more down-time so that I can trade. Truth is, full time trading isn’t all that its made out to be – it drove me crazy in September when laying in bed for two weeks doing nothing but trading made me want to bust out of the house and talk to someone! And that’s why I forced myself to hobble with a gouty foot and sore ass to the Gathering. That was a relief!

No, full time trading is not all that great. One needs to get out. Socializing, networking, fresh air, health and friends are an integral part of a Trader’s life. Making money is a by-product of what we love to do but all that money is useless if you don’t use it to enjoy life and spread that joy around.

So while I am looking forward to the down time, I am not looking forward to the confinement. And this time, I have no choice and will not be able to bust out again. I need to let the foot heal properly and there is only one way to achieve that – stay off my feet.

Damn!

Trade Safe & Happy Hunting Always!

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