SINO? SINO? SINO NGA?

Thursday Log:

Well, SINO closed at 0.42. It didn't reach the target of 0.53 nor anywhere near that figure, even though the market went up a hundred points.

Friday Log:

Well, SINO closed at 0.42 (still). It didn't reach the target of 0.53 (yet) nor anywhere near that figure (wait for it). SINO closed at 0.42 (still) even though the market went down by -4.61 (0.1289%)

So what happened?

Look at the moving averages below:



SINO just crossed the 65 day moving average. It touched the 130 day average slightly and pulled back. SINO will have to settle first at 0.40, and then make a major bounce back. The support now is 0.40.

What does this mean? It means that SINO hit a resistance point (i.e. the 65 day moving average). So it's probably testing that point. (The 65 day MA is 0.43) SINO hasn't convincingly closed at 0.44 on strong volume yet.

So what is the strategy? Just keep this on your radar. The problem with SINO is that it takes it lead from APC. So you must also check if APC is being bought.

One rule with bandwagon trading is that you ride the train when it's moving. And when we say moving, we mean moving up.

And that's the golden rule #1 of bandwagon trading.

"Join the ride up."

Your valuable tools:

Ticker
Intra Day Volume Review
Chart

The limitation is that you have to be monitoring stocks daily. If you plan to buy and hold it for a longer period of time because you can't monitor daily. Try looking at the weekly chart as well.

Let's see next week if our little experiment for SINO worked. Have a nice weekend to all!

When Are We Ever Gonna Get Noticed??

Sorry I wasn't able to post yesterday. I was doing some serious stuff. Really. Anyhow...

Whenever I hear broadcasters in CNBC about investing in Asia (ex-China), I always put my ears closer to the boob tube. They call some parts of Asia emerging markets. Apparently, the Philippines is not even in that list called emerging markets.

I wonder where we are? Submerging market?

Watch this clip if it's working. This guy's suggesting that people look at Indonesia. This clip takes a while to load, and I'm using broadband. Good luck to those using dial up hehe :-) Peace!

So Why Indonesia?

The Good
1. Strong domestic economy
2. Possible surprise in deceleration of inflation in 2008, leading to rate cuts
3. Consumer related stocks should do well

The Bad
1. Commodity stocks not so vibrant because although they export crude oil, they also import refinery products, so they're a net importer. Possible Japanese investments in oil companies could turn it around
2. Negatives: Election, political situation is always tricky in Indonesia.

The Ugly
1. Where's the Philippines?

If he wants tricky political situations, just look at the map, a little to the right, and you've spotted it. The beautiful islands of The Philippines!

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Here's another interesting clip. Mr. Bob Bruner draws parallels between "The Panic of 1907" to today's market volatility.

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Experiment #2 SINO and the RSI Divergence.



1. RSI Divergence confirmed at break of trend line. Price broke out of the 30 day moving average.
2. Volume is not convincing on a longer term picture, however, in the recent week, strong volume performance.
3. Watch out tomorrow. It is now lying closely to the 65 and 130 day moving average. If it breaks that resistance tomorrow. See you at somewhere near 0.50 to 0.53.

Good Luck!

* Disclaimer: Please be aware that this is not a recommendation. Chart reading can be subjective at times. Trade at your own risk.

My Recent Discovery: RSI Divergence

The market still isn't on a growth trajectory, at least based on volume. It crossed the 130-day moving average (blue line), but look at the volume, it's not as convincing. See below (this is as of yesterday).



September 21

Our market closed down -18.65 points to close at 3,423.73, (-0.54%) . The Dow was also down last night by -48.86 (-0.35%). Colonial mentality has invaded the stock market! Maybe what's adding to the bear tone is that ZTE controversy. Now they're going to try to unseat JDV. Tsk Tsk, anyway enough of that politics.

The good thing about the market is that we still managed to close above 3,400. And even better, we recovered from an earlier point loss of -35 or so points.

I recently discovered this tactic called RSI Divergence. It worked for me on two stocks - BPC and APX, so far. I tested it out on APX today, without considering the high gold price nor looking at their fundamentals (or lack thereof). I got out of BPC last week and I just focused on other stocks (for BPC I also used the same tactic), and I can't remember the cost and selling price of that. So I'll discuss APX instead.

APX was a day trade (today). I got in at 5.50, then sold at 5.90. Since this was hypothesis testing, I only bought a minimal amount of shares. Please look at chart below. Notice, the stock is minimally traded in terms of volume, but the divergence still worked in my favor. So maybe it's luck today, or good entry point? In any case, please look at RSI divergence vs. price chart.




I'll still keep on trying this if it works on other stocks. For today, I'm quite happy with the hypothesis testing :-)

Hindsight 20/20, Technical Analysis 1/1

Well on hindsight, my timing today was right, given the very high gold prices. The RSI Divergence then served as a good justification to go in. Take note, I'm talking now in
hindsight. So in future RSI Divergences, you have to make sure you time your entries well. I'm glad I have this program I use, called Technistock. When you see a lot of buying intraday, that's probably a good day for you to enter the market.

Have a great weekend guys!

What is Bandwagon Trading?

When it comes to names, creative names, not name calling, I can say that (at least from what I would like to think of myself) I've got talent.

I joined this great group, called Absolute Traders. For the longest time, I was saying, where can I learn Technical Analysis? So maybe, by shouting out to the great beyond, my pleas for help were heard. And through the confluence of fortuitous events (how redundant can I get), I went to this seminar by ****** ******* Brokerage. They had a segment for Absolute Traders. Thus, I learned about them, and now, months later, I'm a member!

They've taught many a great lesson. But you know, lessons are good, application is better. If life is called the school of hard knocks, August was my most expensive tuition. Ouch! So anyway, enough of that, let's talk about being a trader, and being a bandwagontrader.

In Absolute Traders, they have this forum where people can contribute. Well, I being the creative wannabe, came up with a short list of nicknames. I had to think of something. It couldn't be Mr. Bearbull, since it's already being used. It couldn't be PhilippineStockMarketInvestor since it would be too long.

So I thought, when you're a trader, you must follow the trend. So I thought of some names related to that, and here were the samples

Trendsetter
Trendtrading
Mr. Trend
Trendmaster
Trendfollower

These are all copyrighted. So don't use it you piece of unoriginal something! Hehe. I know I know, imitation is the greatest form of flattery. But intimation, that is the best form of praise. So if you plan to use any of the above, please, mention me and this blog of mine would ya??

So anyway, I thought, there's this term called bandwagon mentality. Where anybody and everybody, for whatever reason they may have, just follow a certain form of idea or belief. In trading, you CAN'T afford to be counter trend. It's hard to be a contrarian sometimes. Can you imagine?

GEO went from below Php 1.00 and swelled to a high of Php 3.00. If you were the contrarian during that bull run, hmm, maybe you'd be holding on to JOH by now. Hahaha.

So in short, when you trade daily, and you see people buying up a stock like there's no tomorrow. You join in the fun. Hop onto that bandwagon. You'll likely be riding that all the way to the bank.

Ciao!

The Anticlimax / Bad Sex

Well well well.

After the DOW went up by more than 300 points, the PSEi went up by a measly 73 points. During the first hours of trading, we were up almost 90 points. Then we pared down gains to fall back to 52 points, then closed higher at +73. (Market closed at 3,362.98). 3,400 is still the resistance at this point.

There may also be some fundamental risks like -

1. Threat of a US Recession (that's why the big cut)
2. Threat of high oil prices
3. Impeachment?

So much for my excitement. Hmf!

I was thinking maybe there's that political noise again.

Ano ba yan!? 2010 is still 3 years down the road, and some senators are already posturing.
I don't intend to follow the ZTE Controversy. I won't even dignify it by putting a link to it. Each government administration will always have that major dubious deal. Maybe this is it for the incumbent. Following it will just make me crazy.

I don't follow political controversies here. I'd rather watch CNBC and Bloomberg, maybe even Fox News. My personal favorite is CNBC. Bloomberg is just boring. Fox News is respectable tabloid.

If you want to master the art of stock trading, you have to control your emotions, study the charts, and more importantly, screen your senses from fundamental news, especially political ones.

And why bad sex? I was supposed to write something about local Congress. I saw an SMS before saying that a group of monkey is called a congress. Apparently, it's not. It's called a tribe. But, this is interesting, look at the other meaning of congress. I'll leave you to your own imagination and interpretation. I remember this movie of Bruce Willis'. He told Matthew Perry, "Do not engage in sexual congress with my daughter".

For now, the bandwagontrader is depressed again. Boohoo.

RATE CUT!!!!!!!!! WOOOOHOOOO!!!!!!

NUFF SAID!!!!!

YOU HEARD IT HERE FIRST. TOMORROW WILL BE A BIG DAY ALRIGHT. BUY ANYTHING IF NOT EVERYTHING!!!

Wait, it's 2:39 In the morning, SEVEN hours from now, we'll have a major rally. Yipee yayo!




He is this year's Santa.

Avenue Q's Most Important Lesson

*Spoiler Warning*

Towards the tail end of the musical, Trekkie Monster (my favorite puppet there, his picture displayed below), is able to whip out a lot of money. He got his money from trading "volatile markets", alluding to the stock market. (For Trekkie Monster, the only stable market is... porn!)

Trekkie Monster. Looking out for porn.

The musical was a romp! And the words "volatile market" could not have come at a better time. The DOW and the PSEi both don't know where it's headed. It's up to this guy (I call him Santa)



NO. Not the guy on the right.

Tonight (Tomorrow Manila Time). I hope they cut that damn interest rate. It's a selfish thought I know, I know. But is it bad if I need to make money to feed my 10 starving kids? Haha.

Tomorrow will be a big day, whether they cut the rates (yehey!) or not (boohoo!).

For more details on Avenue Q click here.
A trend is like a bandwagon. As a bandwagontrader, we follow the trend, Once it stops, out we hop.

The Ghostly Month

The lunar month of July was the ghost month for Chinese worldwide. In our Gregorian calendar, it was the month of August. Personally, I don’t know why there should still be two calendars. Doesn’t it just create confusion?

******

Imaginary Conversation:

Bandwagontrader: What day is today?

Someone: It depends. Are you talking about the lunar calendar or the regular calendar?

Bandwagontrader: Does it mean shortened work weeks?

******

Well, in any case, supposedly, trading in the stock market hits a low in the Ghost Month. And if you’re someone who’s active in the market, you’d know that August lived up to that supposed belief.

What’s the Ghost Month? If I’m not mistaken, this is the time of the year, when souls are released from the gates of hell. (Now doesn’t this sound like a good start for a story or what). Try reading this for more info. I didn’t :-D

They aren’t out to steal your profits, these ghosts. But the way the market behaved last month, you’d be like Johnny Blaze. Turning from:

TO

(Although I don’t know which one looks worst)

It was hella bad – with emphasis on the four letter word – HELL. The gates of hell were indeed opened.

Let’s watch out on September 18. Maybe if the FED cuts their rates, the market will cut us some slack.

*Bandwagontrader jumping out*

Pictures are from here.