July 2012 In Review, August Preview

The month started out okay … then by the second week, I was back in top gear again for WAT59 and WATMY19 … all in all, it was a great month of catching up, progress, achievements and gratification.

Leon Koh, once my student now a trainer with the Pattern Trader Coaching Tutelage, successfully conducted his first “Hedging With CFD” workshop for WAT Graduates on the weekend of 7 and 8 July.

It was gratifying to see Leon on stage doing his thing and delivering a well planned and properly thought out workshop of his own. The participants were amazingly patient and very giving. At the end of the two day workshop, the feedback and kudos said it all and I would personally like to thank all those who attended for giving Leon the chance to prove this worth.

What an amazing community we’ve built. Major props.

On that same weekend, a bunch of old WAT alumni came together for dinner is a most entertaining and unforgettable evening on Saturday 7 July.

From left to right, top row : Roy Tng (current trainer), Ruben Koh (Apr 08), Lucy, (Duke) Alvin Lim (Sep 07) and Leon Koh (current trainer)
Bottom row: Henry Aw Yong (Jan 07, current trainer), Bernard Ong (Mar 07), Jimmy Koh (Jan 08), Alicia Tan (Jan 07) and Eileen Koh (Jan 08)

This group (apart from Roy and Leon who have been with me for almost three years) are all students of mine who have become close friends in the 5 or 6 years we’ve known each other. All of them have progressed beyond my teachings and found their own levels of success and happiness. I am so proud and happy for them and very thankful for the many years of friendship we’ve established. Rock on!

Interestingly, this group of pioneers, Henry, Bernard and Alicia, came from the initial batches known as WAIT (Wealth Academy Investor & Trader). I totally forgot about that until Alicia brought it up!

On Monday 16 July, Malaysia completed its 19th Batch of the Tutorial. This was another memorable batch with unbelievable energy and enthusiasm. I am so looking forward to doing their boosters next month. Rawk on! WATMY19!

A VERY SPECIAL MOMENT

On the night of Thursday 19 July, I caught up with a bunch of fellows I haven’t seen in 32 years – my old St Patrick’s and St Stephen’s school and class mates! What a fantastic sight to see these buggers again! What memories and what laughter. It was sad to hear that some had passed on and a few had weathered hard times and lost.

From left; William da Silva, Anand Nitchingham, Patrick Seng, me, Kevin Soon, Roland Koh, Anthony Jason, Alan Khoo, Hanif Mohamed, Benson Ong, Sean Quintal and Philip Khoo.

But for those who were still alive and well and with us that night, this was a a befitting toast to a group of people who were born and raised in a time when computers didn’t exist and buses didn’t have air-cons. We were rascals in a time when bullying meant hitting someone in the head instead of brainf**king them on some lame social network from behind the safety and gutless anonymity of your computer. We were brave souls who dared to venture and do things that today would seem reckless and irresponsible. But we dared and we learned and we grew wiser for it. And while we ventured, we did so knowing we had friends, real friends, watching our backs. We laughed and cried together in a time when brotherhood was all we had – no internet, no mobile phones and no electronic distractions – just good old friendship and brotherhood that today would seem very gay. What we have is something that doesn’t seem to exist anymore – a friendship and belief built on ten years of sharing the most precious time of our lives; our childhood and youth.

Rock on brothers! A thousand cheers to my Class of 1971 to 1980! We will live forever! (Thanks, Hanif, for the great shots!)

MARKET MATTERS

In last month’s report, I mentioned that July was the most unpredictable month of the year in the toughest quarter of the year … as it turns out, it was. Wild swings in the fourth week saw the DOW drop three consecutive 100 point sessions and immediately swung up for three straight sessions for a 450 point gain, the best three sessions for the year. This sort of volatility has not been seen since the August – November 2011 rollercoaster.

It might be interesting to know that the week leading up to that wild ride in 2011 was the month of July with 100 to 200 point swings in the last two weeks. Could history repeat itself this year in August?

The VIX has dropped to complacent levels while the DOW is back up above 13,000 and less than 140 points from the year’s high of 13,214. This could prompt the smart money to get hedged again especially as we go into the worst three consecutive months of the trading year. This will most surely spike the VIX again.

Bond yields have been bouncing along historical lows as the curve flattens more and more to the downside. As it stands, the curve is lower than last year’s low and getting lower with each correction in the risk market.

This is a sure sign that there is a lot of money tied up in fixed income. And that is possibly why volumes have dipped in the risk market to its lowest levels in more than a decade.

August is not known to be a really bullish month. Its statistics are more like “rarely bearish” but when it does go bear, it is very bearish.

August Preview

August 2012 has 23 trading session in all with no holidays, making it the longest trading month for 2012. In the last decade, August has been more bullish than bearish but the last two years, 2010 and 2011, it has been horribly bearish; in 2010, DOW dropped from 10700 to 10,000 in three weeks and in 2011, it lost more than 10% by dropping from 12,100 to 10,800 in a single week.

Trivia

Commodities

SUMMARY

One of my students in Malaysia posted her Trading Journey on her blog and it generally summarizes what every good trader goes through before they find success at the other end of the bid/ask spread. This is essential reading for those who are still dreaming or under the illusion that trading is as easy as the gurus make it out to be. Read about it here: My Trading Journey – How & WHY I Trade? by Jeanne Kong.

Like I said, it was a deeply gratifying month and one that I am not likely to forget in a long, long time.

Thanks for reading and Happy Hunting always!

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Don’t forget to check out our Monthly Sector Report on Utilities & Resources 2012.

Click here to learn how to light up your portfolio for the coming months.

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