Long Time Gone? and Market Review

I never predict broad market direction, esp. for long time direction, for question such as " how will market go one year from now?", my answer is short and cool: " I don't know". Because I think that is analyst's job, there are plenty of "smart" people out there-- on TV, newspaper, radio and analyst reports doing this job. The information is flooding.

As for me, I'm a trader. I have one and only one mission in trading: to make money. There is a critical distinction between an investor and a trader: traders buy and sell, investors buy and hold, hold long long...

As a trader, I don't have to be right every time, I just want to be profitable in overall. I want to follow the trend, buy on the way up and sell on the way down. I don't want to buy cheap because it can be cheaper. Those stocks both are fundamental and technical strong are my favourite to go long.



But I just made a very simplistic prediction on Dow Jones-- merely based on chart and my intuition. few points to be note with regards to my prediction:

1. There is a high probability that market will go into some correction soon. As it approaching the red line multi year resistance line.

2. The assumption made here is if history were repeat itself. It's a simple comparison between the two pair of yellow and cyan tinted blocks below the red resistance line. Calculate how long time they formed.

3. From the chart, we can tell the 2008 drop is steeper, recovery is faster and much shorter(24mth vs 15mth), as compare to 2002~2003 period market.

4. It takes 23mth to correction and consolidation following by the recovery in 2003, to break above the resistance line and run up.

5. The market had stayed above the line for about three years( 2006~2008.10) then came under the line again.

6. One thing worth to point out is the drop in 2008 was lower( worse) than that in 2002( lower low). So I was wondering the correction for now is going to be lower as compare to 2004 low in the cyan tinted block?

7. If the correction time period was going to be 14mths from now on, then it should be ended on Mar 2011. The big question is to which extend the correction will be. Em... treat it as a chicken-drawing, my intuition at this moment only. I always remind myself don't be stubborn and constantly review chart based on latest info.


Singapore Market
As for Singapore market, I think the correction is imminent and the extent won't be so big as compare to US market. As a update of my previous post HERE, 61.8% is the measurement from the historical high in 2007 (before the 2008 drop) to 2009.03 low, and it has been rebounded as high as 61.8 percent of the high to low distance. It's a important level to watch at.



I screened through the STI 30 component stocks, it appears to me half of them are at their major resistance now. only few counters such as wilmar, cosco, noble...with no major resistance above them. So a big guess to me is the 2nd and 3rd tier stocks would have more room to play out this time( will not discuss in this post), since blue chip are already ran up very high.

Below is my quick table for the 30 component stocks and their respective Support/Resisance level for short term.



Bye for now.