July 2017 In Review, August Preview

WHAT AN AMAZING MONTH!!

July 2017 is going to be a month I am not likely to forget for a very long time. So many things happened so quickly that the month went by so fast leaving only these wonderful memories on which I will build a future on.

I started the month in Kuala Lumpur with a Gathering amongst my MY Graduates on Friday 30th June. It would be the last Gathering in KL under AKLTG’s roof. That was followed by a weekend of Futures & Commodities with a very enthusiastic bunch of traders. I love these workshops where we really get into the hands-on nitty-gritties rather than have lectures and lessons. Nothing beats getting your hands dirty to get the actual experience.

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Then came a series of talks at various financial institutions to address their Remisiers, Traders, Dealers and Fund Managers. I used these session to impress upon these professionals the significance of macroeconomics in their analyses and positioning. For the most part, the concept was warmly received and already, I am getting call backs for follow-up sessions.

Wednesday 5 July, UOB Kay Hian …

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Friday 7 July, RHB …

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Wednesday 19 July, CIMB …

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Friday 21 July, DBS Vickers …

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Tuesday 25 July, OCBC Securities …

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Thursday 27 and Friday 28 July, Phillip Securities …

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These sessions would not have been possible if not for the faith and belief of Jamie Chung from Macquarie Capital Securities. Thanks, Jamie! Now let’s really make this work!!

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TUTORIAL MATTERS

On Friday 14 July, I fulfilled my final commitment to Adam Khoo Learning Technologies Group by hosting the last PTT Graduates Gathering under their umbrella. It was a really special moment for me after ten years with them. Almost 300 Graduates attended this event at Lifelone Learning Institute at which, Patrick Cheo, CEO of AKLTG made a fitting testimonial to our ten-year relationship.

Thank you to everyone who turned up to lend your support. It has been an amazing ten years. Now let’s look forward to the next decade as the Pattern Trader Tutorial makes its next evolution!

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It was also great to have a really good bunch of old friends (all first year graduates from 2007) get together for a memorable picture ten years after getting to know each other. Lawrence, Phoebe, Alicia and Ruben … thanks for a decade of friendship!

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On 24th July, FinancialScents hosted its first Pattern Trader Coaching Tutelage for Graduates. This is the follow up to the Tutorial where Graduates get their hands dirty with the hands-on experience of doing the research, planning and execution of everything they learnt in Tutorial.

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Moving Forward …

In between all these engagements, there were countless meetings, counselling sessions, consultations, the on-going process of the production of the Financial$cents.com website and the design and production of my various apps and tools for the site.

With so much happening at such a frenetic pace, this has been the most exciting time of my teaching career as I move away from the seminar business and focus on the financial education business where I have always wanted to be.

(Yes, there is a HUGE difference between running a seminar business and being in the education business. While one is all about converting masses into paid seats, the other is about converting ignorance into literacy. While one spends the majority of their time, effort and resources on advertising, marketing and sales, the other puts much time, effort and resources into teaching, supporting and mentoring. Yes, indeed … it is a huge difference.)

I will still maintain a presence in the seminar market but it will be at a drastically reduced pace only to meet the needs of those who request for the Tutorial. The Pattern Trader Tutorial will become more exclusive in the years to come as it only caters to those who are dead serious about their money, their total financial literacy and their long-term future. For those who wish to get-rich-quick, attain financial freedom and become millionaires without effort, I strongly recommend that you look elsewhere for your education. I honestly don’t know how to teach you that.

I am in the business of educating and I educate those who want to learn. I shouldn’t have to convince you about how important it is and why you need it. You shouldn’t have to ask why it is necessary to take a complete and holistic approach to learning everything regarding your finances and the economic factors that will affect your wealth. I shouldn’t have to teach you the importance of not being complacent and ignorant. If I have to influence you into accepting all that has been mentioned in this paragraph, I strongly recommend that you look elsewhere for your education because you’re obviously not serious enough about your financial future.

It has been 17 years since I became bankrupt as a result of my financial ignorance and naiveté. It has been 10 years since I was discharged from that financial prison. I still wear the scars of my stupidity and my family will never forget the nightmare we went through. I still fear the possibility of history repeating itself. Thus, I continue to educate myself in the ever-growing, ever-evolving world of finance and economics so that I take nothing for granted.

And for the like-minded, I will continue to teach them and grow with them. This is my job because it is my #1 Passion.

MARKET MATTERS

It is obvious that the US Equity Market is overbought and clearly in a bubble especially amongst the Tech and Housing issues. According to the Case Shiller P/E, the two sectors are way value at 33.60 and 48.70 respectively.

Shiller Weights

The other point to take note of is the weightage of the Tech Sector as shown by the pie chart from WSJ.

S&Pweights

From this chart, you will see that the threat of the housing bubble is not really significant as its weightage on the S&P500 is really close to nothing at 2.86% of the S&P500. The Tech Sector however, is a huge monster at 23.03%. With its valuations already in bubble territory, it becomes rather obvious where to look for signs of this bubble bursting.

The months of August and September might give us that chance for a dip. The have been the market’s most bearish consecutive months of the trading calendar for three decades now. With stats like that, it would be wise to be cautious going forward.

$DJI Weekly Stats for August 2017

$DJI Weekly Stats for August 2017

$SPX Weekly Stats for August 2017

$SPX Weekly Stats for August 2017

August Preview

August has been the most bearish in the last three decades with no reliable patterns. It is the first of two consecutive months of bearishness going into September, the most bearish month of the year over the last 80-plus years. Since 1987, August has been the worst month on the DOW, S&P and NASDAQ.

August 2017 is the longest trading month of the year with 23 full trading sessions and no public holidays.

August Trivia

Key Economic Dates For August 2017

Mon 31 Jul

Tue 01 Aug

Wed 02 Aug

Thu 03 Aug

Fri 04 Aug

Mon 07 Aug

Tue 08 Aug

Wed 09 Aug

Thu 10 Aug

Fri 11 Aug

Sun 13  Aug

Mon 14 Aug

Tue 15 Aug

Wed 16 Aug

Thu 17 Aug

Mon 21 Aug

Tue 22 Aug

Wed 23 Aug

Thu 24 Aug

Fri 25 Aug

Sat 26 Aug

Mon 28 Aug

Tue 29 Aug

Wed 30 Aug

Thu 31 Aug

Fri 01 Sep

Commodities

SUMMARY

On many occasions during my round of talks, I have been asked if and when a market crash is due. I am obviously not a fortune teller so I can’t possibly know.

But I am of the opinion that the market should make a correction and the coming two months are the perfect opportunity for that. It isn’t likely to be a market crash situation. It could possibly be a 10% to 15% correction in a best case scenario and a 30% correction if the sell-off extends into the end of September.

What I fear is a deep and long-term slowdown not unlike the 70’s. The markets are likely stay buoyant but the economy will take the brunt of the slowdown with high unemployment in an extremely tight job market, low or even negative inflation levels, slow growth or even negative contractions in growth, manufacturing and services, extremely conservative consumer spending and possibly even a liquidity crisis.

In short, the market will be little affected but the street will suffer for it.

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