Blog: Market Analysis

The Dow Jones is fighting upwards, forming a giant wedge as it does so. This means that it is losing power as it pushes higher. After the breakout on Tuesday which crossed the key 12,300 level, we have seen two days of hesitation in the form of two long-legged dojis (today’s doji is not shown), but they have managed to stay above 12,300. Looking at the slope of the wedge, there is a good chance it will be able to test the old high of 12930.

Spencer is an avid globetrotter who achieved financial freedom in his 20s, while trading & teaching across 70+ countries. As a former professional trader in private equity and proprietary funds, he has over 15 years of market experience, and has been featured on more than 20 occasions in the media.

Property counters – Yanlord (Z25) and Keppel Land (K17) | Technical Analysis | Singapore Stocks

As the year draws to a close with Christmas festives and new year plans, we see liquidity in the markets drying up as there is less participation from the big players. Hence, these few days I have been taking it rather easy and trading only a few hours each day. Today was a rather good trading day for me, although it was rather boring scalping range-bound markets, and I managed to make about 40+ ticks on the DAX with a 70% hitrate. As expected, the Christmas rally has started to fizzle once Christmas was over, and the market is currently in a range/bearish mode. Based on seasonality, Nov/Dec/Jan are supposed to be the stronger months, and if these months are weak, it could be a red flag for the months to come. Let’s review some property counters.

Yanlord (Z25) Daily chart

This stock has been on a downtrend for more than two years, and has provided many shorting opportunities. One of my favourite counters for shorting. Currently still trading within the downtrend channel.

Keppel Land (K17) Daily chart

After the new regulations were announced, there was a gap-down and follow-through, which provided the price catalyst to break out of the descending triangle. The pullback now provides a good opportunity to short.

“Discipline is doing what we do not want to do.”

Noble (N21) – Is it time to short yet? | Technical Analysis | Singapore Stocks

Many people have emailed me saying that I have missed this rally because I was too bearish and not flexible, but it really depends on your strategy. My strategy is to take high probability “with trend” trades, and even if I am wrong a few times, catching a strong “with trend” move more than makes up for all the wrong entries. Countertrend moves, on the other hand, is a fun gamble at picking bottoms, and easy to spot on hindsight, but definitely not easy to trade and not worth the risk. That’s my opinion.

For the past 2 months, there has not been more than 3 white candles in a row on the STI chart. I thought that today might be different given that Dow that surged 330 points up the night before, but the STI gave back some gains near the close, forming a black bar. While I cannot be certain that this marks the end of the rally, I think it is worth the risk to take a small short position if today’s low is taken out tomorrow.

Noble is testing the middle channel line, and there was a bearish bar today on high volume. I would be watching to short if price falls below 1.360. Please read the disclaimer on my website and take note that my strategy is likely different from yours. I will cut my losses fast once I realise I am wrong, but I may not have the time to blog about it until the end of the day. Good luck!

Dow Jones Index (DJI) – intraday Elliot Wave counts | Technical Analysis | Stock Indices

I am not a big fan of Elliot wave, nor is it my area of specialty, but last night this chart pattern jumped right out at me from the charts. It was a glaring 5 waves up followed by a corrective abc equal size. What is even more interesting is a smaller abc within the b wave. I posted this chart in the forum here soon after.

This is how the day ended. There was some fresh news that pushed the index up at the last hour. Notice another 5 wave decline soon after I posted my previous chart. “Perfect” patterns like these seldom appear, but have strong predictive value when they do.

Review of US Indices – Dow Jones and S&P 500 | Technical Analysis | Stock Indices

The latest headlines from Bloomberg proclaims, “Germany May be Ready to Surrender in Fight to Save Greece”. Once again, the attention has shifted to the Europe crisis, just after the anti-climax jobs and stimulus talks in the US. Looking at the weekly charts of the Dow Jones and S&P500, we see that both have violated a major trendline after exhibiting the same H&S pattern. This is bearish. Now, prices are consolidating in a tight range. We might see a test of the previous high if there is any good news. Otherwise, this bear flag might break strongly to the downside. We will have to watch the news closely. You can sign up for our mailing list by clicking here.