Time to Buy Stocks

I was training a class of new VectorVest users about 2 weeks ago.  Someone from the audience asked me if it was too late to short the market.  Surprised, I then took a poll of the audience that day if they felt bullish or bearish about the market.  Most of the raised hands were bearish.  With that I declared to them that it was time to buy stocks!

It was clear 2 weeks ago that the sentiment amongst retail crowd was bearish.  They do not want to buy stocks and are thinking of shorting.  In understanding that there are only 20% winners in trading, I knew that I have to be bullish.  Never take action, until there is a clear entry signal from the charts to signify that the demand fundamentals has changed.

You need 2 things to enter into a market:

1. Identify the Driver (Fundamentals or Sentiment)
2. Timing (Technical Analysis)

See below for the STI chart, and the S&P chart.  Green arrow for Buy signals, Red arrow for Sell signals.

It is now time to buy US and SG stocks.

How I got to speak at SGX

Tonight, I will be speaking in SGX at 6.30pm. I am writing to help to promote the event, and also to describe how I was invited by my brokerage.
My system (VectorVest) called for a sell on 2nd Aug.  All my human intelligence was telling me to continue to hold my stocks.  But after a tug o' war with myself, I decided to stay disciplined.  Hence I sold more than 20 stocks that I had long positions in.  Then, I also took a small short position.
Today, on looking back, I can say with conviction that Discipline is far more important than Intelligence in trading.
Here is the invite from my brokerage, Amfraser Securities.

Dear All
We are organizing a trading workshop for our client on 5th Sep, we have invited Mr. Ian Low from vector vest to share with us on the current market situation, should anyone be interested to join us, please feel free to email to us
Vector vest uses a combination of fundamental analysis and technical analysis to help better gauge the market and how to better your portfolio. As a personnel witness to the system, the vector vest system call for a SELL 3weeks ago, and it is a BIG SELL from vector vest. Mr. Ian Low sold his entire holdings that was under our holdings and even shorted stocks. I believe that the system is suitable for buzy people who does not have the time to monitor the market.
Thank you 

TITLE: TRADING WITH CLARITY
DATE: 5th Sep 2013
TIME: 1830 hrs to 2030 hrs (2hrs)
LOCATION: SGX Trading Room 2.
Address: 2 Shenton Way, SGX center 1, Level 2 training room

Should you have any queries, please feel free to contact us
Thank you
Warmest Regards

Chai Ming Hui, Augustine
Remisier, Amfraser Securities Pte Ltd
DID: 6236-2676 / 2677

Riding the Waves

My last entry in this blog was in early May this year.  Before I continue with the current market situation, let me give you a summary of my trades in the Singapore stock market.

See the chart of the STI below.  The Red/Green triangles are my entries and exits.  I have been riding the waves in both directions.

• Closing my longs in early June, and then initiating my shorts.
• Closing my shorts in early July, and initiating longs.
• Closing my longs in early July, and initiating my shorts.

At the current moment, I have closed half my short positions.....and waiting for the green arrow.

It has been about 4 months since I last wrote about the markets. There is a little story behind it.

Met a technopreneur, who has been on and off giving me free tips on life skills. He asked me what my end objective was for my blogs and websites. Reminded me the first 1st habit of successful people is "to begin with the end in mind". 

Since May, I have been stopped all my blogging.........till today.

These 4 months, I have been doing lots of self searching.......while trading.
And Yes, I am still trading!!

Expect to see lots of changes. I hope everyone benefits.

Sell in May and go away

I do not like to forecast......because I am often wrong.  My way of trading is to follow where trends may take me.

There is a pattern that is just to obvious too ignore.  See the STI chart below:

For the past 3 years, if you have shorted on the 1st of May and sold anytime in June, you have made a bundle. See the arrows.  The start of the arrows is on 1st May.

The STI price for past 3 years formed tripletop-like consolidation patterns in Mar to April time period.  Upon breaking the neckline, fierce downtrend ensued.

Now lets take a look at each of the swing low to see when we can take profit of the shorts.

• For 2010, it is 25th May
• For 2011, it is 17th June
• For 2012, it is 4th  June

There does not seem to be any pattern here that we can take advantage of.  We can only take reference that the downtrend lasted for about 1 month to 1.5 months, upon which we must be ready to take profit.

Now if most people are aware of this May Syndrome, 2 things are likely to happen.

1. The sell off may take place in April, as people fight to get in to short first.
2. The opposite may happen.  There may be a breakout failure to the downside.  The price may go up instead.

Play out the different possible scenarios that may happen to your portfolio.  Have a plan ready to react to each outcome.  Because, if you have no plan, the emotions will get to you when the price start moving, and you are setting yourself up for failure.

Rules based trading - Taking profit on Ezion

Ezion hit my profit target of 50% yesterday.  I longed on 3rd Dec 2012.  See the Entry on my blog.

Based on rules, I sold this morning at $2.18.  I did feel the emotions of greed whispering to me to hold on further.  Managed to brushed off the temptations and focus on obeying rules.
Admittedly, it was helped by Ezion forming a shooting star yesterday on the daily chart.  In addition, the price is now at the top of 2 channels.
Will I be buying Ezion again?  Yes, I may.  It is still a fundamentally sound company, and rising in momentum.  Again, if ever I trade Ezion again, my job is to ensure that the entry will be based on rules.

Real Estate Relative Strength Analysis

Real Estate is a red hot topic in Singapore.  Many people have diverse opinion whether the government intervention in Jan 2013 will finally cool the industry, or will there be a further cooling measures if this segment continue to defy common sense.

Real Estate sector is very broad.  Note that I still quite heavily vested, both in reits as well as ordinary stocks.  I wanted to know if I was vested in the right segment, and if necessary, to switch my horses.

First I manually created indices from the real estate stocks available in Singapore.  Then I use traditional TA based on moving averages and MACD oscillator determine the relative strength of each segment of the real estate sector.

I shall start with the weak to the strongest.

As expected, the Singapore Residential segment is one of the weakess.  The strongest are the Commercial and Hotel segments.

I believe in getting rid of losers and investing in the strongest.  I will need to switch my horses.

China

SG, Residential

Asia

HK

Industrial

Retail

Hotel

Commercial