Just like that, one quarter of the year is done and dusted. And what a quarter it was! Personally, it was a very good quarter for me on all fronts.
March was also a great month. It wasn’t too busy on the teaching front with a Booster Session for WA32 on 5 March, WAT Gathering on 16 March and a WA Business Skill Workshop on 30 March where we had a great time discussing macroeconomics with market actions.
Batch 18 from K.L. Malaysia got their weekend edition between 23 to 26 March, 2012. This was a memorable batch for so many reasons. Lucillia from the SG alumni last year came all the way back from Canada with her husband, Andrew, to re-sit the tutorial in K.L. (I didn’t get a picture with her … dammit.) Also returning were Don Arif (WATMY05, 2008) (below, left) whom I haven’t seen since 2009 and Edy Widjaya (WATJKT03, 2008) (below right) whom I last saw in Jakarta in 2010.
This was a great reunion and the batch made it even more memorable with their energy and enthusiasm. I can’t wait to get back there for the follow up sessions.
But what kept me really busy were the many personal engagements from my traders who needed consultation, guidance, advice and mentorship on everything from trading issues to personal development. It is always a humbling and flattering experience when people look to you for leadership and answers and trust you to guide them well. This is the most gratifying part of what I do. And that is why I love what I do with a passion.
Well, that is the end of Quarter One, 2012, just like that. We started the year coming out of a bullish Santa Claus Rally, we got the first five days of January to finish up and the January Barometer also closed up. Valentine’s Day was a little funky but closed up nonetheless and we closed out Quarter One way above the December Low – all signs that point to a potentially bullish year.
This has been a historic quarter with the S&P 500 ending its best first quarter in over a decade, the NASDAQ at its highest since 2000 and the DOW sealing its best first-quarter point gain in its history.
For the quarter, the DOW gained 8.1%, it’s biggest first-quarter gain since 1998 and leaves it sitting at its highest level since 2008. Thirteen straight weeks of bullish candles and 7 straight weeks of gains gave Nasdaq its best first quarter since 1991 and its highest point since 2000. Nasdaq rose a whopping 19% since New Year’s Day. S&P 500 advanced 12% for the quarter and is sitting at its highest levels since 2008. This is the biggest first-quarter gain since 1998.
On the economic front, America continues to show signs of an improving and recovering economy with upside economic data and numbers that suggest expansions in production and manufacturing and decline in unemployment and inflation.
There is, however, one worrying point …
… there is still a lot of money parked in fixed income. If this rally is going to be taken seriously, we need to see that money come out of hiding and returning to the risk table. Volumes (equity) have not improved significantly to warrant confidence in this rally and the Yield Curve seems to suggest that money is slow in coming out of the fixed income space. To add to my worry, the VIX is telling us that the risk space is getting rather complacent. It has been hitting new lows not seen since the last round of complacency in 2007.
I will not doubt this rally and will continue to ride it up. After all, the trend is our friend, is it not? Plus the coming month of April has a reliably bullish reputation. So what’s there not to be bullish about. But I will be cautious. Very cautious especially when we get to the end of April.
Now we go into arguably the most volatile quarter of the year – April, May and June – known for being the ultimate test for market players. April has a reliable record for being the most bullish month of the year while May is infamous for its massive sell-offs while June in recent years has become notorious for being bearish. This is truly an acid test for any trader and a wild roller coaster ride for investors.
April is traditionally the most bullish month of the year. April 2012 has 20 trading session and one trading holiday (Good Friday).
- April begins very bullishly
- The first trading day of April has been up on the DOW 14 out of the last 17
- The eve of the Good Friday 3-Day Weekend has seen the NASDAQ up 15 of the last 17, 11 straight since 2001
- Friday 6 April is Good Friday – Markets are closed
- The day after Easter Sunday (9 April) had been historically bearish but in recent years, S&P has been up 6 of the last 8
- The second week of April tends to be flat with a bit of upside and rather uneventful
- The third week is very bullish
- Income Tax Deadline (April 16) is very bullish – DOW up 15 of the last 22, down 4 of the last 7
- April Expiration Friday has been up on the DOW 12 of the last 15
- The day before April’s FOMC Minutes (April 24) tends to be very bearish
- April 25 sees the FOMC Meeting minutes releases at 14:15 hours
- April closes well with the last trading week being reliably bullish
- April ends the “Best Six Months” of the year
- Crude tends to see more upside till mid-May
- Nat Gas tops out in mid-to-late April
- Gold starts getting weak in April
- Silver tops out in week three of April
- Copper stays strong till early May
- Soya and Corn tends to stay long while Wheat starts a decline
- Cocoa tends to bottom in April, Sugar stays weak and Coffee stays strong
Now that the market has run up for five months, a familiar pattern is starting again – the emergence of new gurus and workshops. This will get more and more commonplace in the months to come if this market continues to run up. And with the new round of workshops comes a new generation of hopefuls who will buy the dream of getting rich quick and ride this wave to financial freedom.
And we know what follows after that.
For now, I will take it easy and enjoy my newfound leisurely pace of work and enjoy it for as long as it lasts because I know I am going to get very busy again when this bull run ends.
For now, we say “adios” to Quarter One of 2012 and thanks for the rally … it was a magnificent and truly historical run. Now bring on Quarter Two!