Risk-Reward Market

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The January Effect

The first day of trading in January is very important in deducing whether the rest of the year will be a bullish year or not. Seems like we will get a bullish year. STI and DOW closed on the high yesterday.

Nope, it's a problem

Given the problems with the Euro zone again, bullish calls are off. We will have to wait for December to see if it improves.

Last week of November

Saw a reversal of morning star last Thursday with a pause on Friday. Looks like a bullish last week of November if the Irish bailout has no problems.

We got a good Rally....

Now time for the bears!

November

November is here! We had a jittery October. Right now is that we are shy from the highs - Another resistance to break. If DOW can break it, then we are up for another good rally.

Oct

Been really busy this month. October seen a rally that keeps pushing forward. But right now are we at a market top?

Is fear coming back?

VIX which is know for its indicator for fear and volatility seemed to be breaking out of the triangle pattern. IS FEAR COMING BACK?

Stocks Broke Out, but Can They Hold Gains?

That was pretty unexpected. DJI broke out of resistance on Friday. This year is a year which broke many traditions. Seems this September is a up month. Gold touched an $1,300 per ounce. There is still uncertainty for next week till the end of September.

Side story

Looking at the chart of Genting Singapore, it's kinda going parabolic. What goes up, must come down - HARD. Of course this pattern is unpredictable as you won't know when the stock is going down. It just keeps going up, up, up, up till someone starts dumping it.

Does rally still have legs?

High volume on a day of uncertainty. I remain cautious. If it goes down again, we got a head and shoulders forming or a triple top.

MONDAY: NAHB housing market index; Nike shareholder meeting; Oracle Open World; Earnings from Lennar and Discover Financial
TUESDAY: Housing starts; FOMC Announcement; Clinton Global Initiative; MasterCard annual meeting; Earnings from AutoZone and Adobe
WEDNESDAY: Weekly mortgage applications; oil inventories; Wall Street & Washington Conference; Earnings from General Mills and Bed Bath & Beyond
THURSDAY: Weekly jobless claims; existing home sales; leading indicators; Chicago Fed Pres Evans speaks; Volcker speaks; FCC meeting on opening up new airwaves; Earnings from Rite Aid and Nike
FRIDAY: Durable goods orders; New home sales; Richmond Fed President Lacker speaks; Philadelphia Fed President Plosser speaks; NY Film Festival; Earnings from KB Home

Out of 200 SMA

We got a rally and we broke through the 200 SMA. Yesterday we had a pause in the rally. Right now we are in the month of September. In September it is traditionally flat till October. Looking at the low volumes too, markets probably gonna consolidate.

Up again?

Well, seems my support theory is holding well though it was weaving in and out of that territory. MACD looks towards an upside. However US economic situation isn't looking very bright. It's stalling. It was Friday's Job report propelling the rally on Friday but it declined slowly as people started digesting the news. Based on technical analysis, we still have that 200 day SMA to break. Also we already have the "death cross" which signals for another long term downward movement.

Still not looking better

Things are still not looking better for the US economy. Again disappointing jobs numbers. The 200 MA is still a tough nut to crack. We are back below 200 SMA again. Selling volumes are higher so expect more downside? We should reach a support soon at 10000 points. But there's a silver lining. Look at the baltic dry index.

Up or down?

After much upside, we seem to be hitting a ceiling. There's a fight of bulls and bears again. Bears are trying to bring it down but bulls pulling it up the last minute again.

"Volume was light, with less than 950 million shares changing hands on the New York Stock Exchange. Decliners outpaced advancers, roughly 8 to 7"

Low volume don't seem to tell me it's a bear. But probably stocks will come down the coming week.

For Singapore, we didn't get our National Day rally on Friday. So hopefully we will get a post National Day rally on Tuesday.

Touching the 200SMA

I like this chart. Bulls are definitely incharge right now. We got a volatile 3 days where bulls and bears were fighting with each other and then boom! Bulls win. If we break pass the 200 SMA we are in for a bull run. Then again if you read the news, people are not too convinced about the standard in the European banks stress test.

Dow Drops 1% for Week; Bank of America Tumbles

Guess I was wrong about the direction. DJI failed to break out of the 200 moving average. Friday's report on consumer moods was really bad and it brought down 261 pts. Earnings from banks were not stellar. Looking at Friday, it could be a downside as volume was high that night. However next week will be heavy on earnings as there is a huge number of companies reporting their earnings. So get ready for a volatile week.

Earnings season

Opening by Acola and then intel, earnings season seem to be looking good. Some other companies are smashing expectations also. Still maintaining bullish with a consolidation as there was a huge bull. I don't want the market to be overcooked.

More to come:

THURSDAY: PPI; Empire State survey; weekly jobless claims; industrial production; Philly Fed survey; Yellen nomination hearing; Fed's Lacker speaks; Earnings from JPMorgan, Novartis, Google and AMD
FRIDAY: CPI; consumer sentiment; Earnings from Bank of America, Citigroup, GE and Gannett

Reversal

Spotted a reversal on Monday and yesterday has confirmed the reversal. DJI going on the upside now.

Down down down

Well, didn't I say there was a downside coming? Well it did, looking at fundamental data from US last week and this week, it seems that recovery is far from rosy. Friday was an important day as many investors were waiting for the jobs data to see where the market can head. A good data will push market up, disappointing data ends up down. Result? Disappointing jobs data in addition with disappointing factory orders continued the downward slide. Some analysts were talking about head and shoulder formation in S&P500. It has already broken through. Now it could be a bearish market instead of a correction.

In my opinion, it's a bearish and mixed. Cause looking at Singapore side, the economy is reporting extremely well recovery and progress. While the western side is reporting disappointing recovery. Very confusing indeed.

For now I'm sticking to the bears for next week till I see a turning point.