31st August 2010 – 5 Big Economy Bubbles

This is what I read from NanYang (南洋商报) newspaper.  Just think that it will be good to share with you guys.

31st August 2010 - Merdeka Day

Today I have not done anything fruitful for my country and for myself. I have not taken some time to do market analysis. Well! I have a lot of excuses…. (excuses!!!)

Anyway, Happy Merdeka Day… Malaysia.

So is it going to be Bull or Bear tonight? I don’t know. After yesterday’s “tarik-tali”, my assumption of a short-term Bull is in risk now.

8/30/2010 - My short on AAPL

21st August 2010

 

1. GOOD SHORT!!! I think
2. I feel that it has lost its strength.
3. I have a controllable stop loss easily identified.

Input on 30th August 2010:

1. I "feel" that Bull is marching in -- by observing SPY
2. Tighten my (buy back) stop loss at $242.60.

   Buy $	Sell $	Buy Back $	Profit / Losses
   		242.60

   Lesson Learnt:

3. Watching the index and feel the momentum is really important.
4. Again…. I could be wrong at anytime. ;-)

   Intraday Chart

   

   Historical Chart

   

TARP and Stimulus – what you should know!

I have never really know what TARP and stimulus really meant. Do you?

I have come across this very useful article and think that it is wise to share with my stockaki gang so that we can learn from each other as much as possible.

Here are some really interesting statements that you should pick up from his article:

1. The stimulus gave no money to bankers. The TARP was not stimulus.
2. The Troubled Asset Relief Program was an $800 billion lending program to stop a run on the banks. The TARP was proposed by the Bush administration in September 2008.
3. The separate $787 billion stimulus plan was approved about four months later, in February 2009.
4. Most of the stimulus money was spent in four areas…. (read for yourself) and none of it went to banks.
5. Most independent experts -- including the Congressional Budget Office and conservative economists -- who've looked at it, agree with the White House that the economy would be much worse without the stimulus.

Go ahead… read it. It is hell of an article.

Two dangerous myths about the stimulus Rex Nutting - MarketWatch

Analysis on 8/28/2010

BULL or BEAR ??

 

Short term	Long term

SPY chart:

Input:

1. Tonight really killing. GDP announcement at 8:30pm and Bernanke speech at 10:00pm.
2. After GDP, it was BULLISH.
3. Market open and Ben speak, market turned BEARISH.
4. After that market turned BULLISH instead.
5. Everything happened in just around 2 hrs.
6. I made stupid decision tonight - refer to C for details.
7. The article was right.

   

   

DJIA chart:

Input:

1. –NA-

Test posting to blog from Windows live writer

Lesson Learnt:

1. Tonight there was GDP report at 8:30pm and Bernanke speech at 10:00pm
2. I was panic with the "tarik-tali" of the Bull and Bear and sell my C. Lost my commission.
3. Refer to this PAGE for details.
4. My fist purchased at $3.66 was PERFECT decision.
5. Bought back again at $3.71 ---- I saw the Bull marching in. I believe I am right again this time.
6. Market is always very volatile at the beginning especially got so many data coming out.
7. Make changes and publish again….*see whether it works or not*

 

 

When bad is good – by Mark Hulbert

Mark Hulbert

Aug. 27, 2010, 12:01 a.m. EDT

Pasted from <http://www.marketwatch.com/story/story/print?guid=3994BC3C-9176-4FDD-9D95-690225E3A778>

Commentary: Sentiment is now gloomy enough to support a rally

By Mark Hulbert, MarketWatch

CHAPEL HILL, N.C. (MarketWatch) -- From a sentiment perspective, the Dow's dropping below the 10,000 level appears to be the straw that broke the camel's back.

And that's good news: It puts contrarian analysis back solidly on the side of the bulls.

When I last devoted a column to stock market sentiment, at the beginning of August, I reported that the veritable "wall of worry" that a bull market likes to climb had weakened considerably. I concluded by saying that the fate of July's rally would depend on whether sentiment quickly dropped back into the pessimism category. ( Read my Aug. 3 column.)

Not only did this drop in sentiment never materialize, but advisers continued to become even more bullish in the sessions following that column. From a contrarian point of view, therefore, recent market weakness has not come as a complete surprise.

Fortunately, however, in recent sessions many advisers have thrown in the towel.

Consider the average recommended domestic equity exposure among a subset of short-term stock market timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Stock Newsletter Sentiment Index, or HSNSI). This average currently stands at minus 6.6%, which means that the average short-term stock market timer is actually recommending that his clients allocate 7% of their equity portfolios to shorting stocks.

In early August, in contrast, when advisers were insufficiently worried, the HSNSI stood at 35%. A week after my early-August column, furthermore, the HSNSI got as high as 47.5%.

This means that the average recommended equity exposure has dropped more than 54 percentage points in a little more than two weeks' time.

That should be enough pessimism to support a rally.

In addition, market timers who focus on the Nasdaq market in particular -- and who tend to be an especially volatile bunch -- are even more bearish right now. Their average exposure now stands at minus 50%, which means that they're now allocating half their equity portfolios to an aggressive bet that the market will continue declining.

They may turn out to be right, of course.

But, historically, market timers on average have been wrong more often than they've been right.

I acknowledge that it's not comfortable to step up to the plate when the stock market is acting as dismally as it is right now.

But, to quote Nathan Rothschild's famous phrase, the time to buy is when the blood is running in the streets -- and that's not easy to do, to say the least.

Also, don't forget that you will be perennially late if you wait to invest until it feels easy or comfortable to do so. Just think back to early August, when the Dow Jones Industrial Average (DOW:DJIA) was trading at the 10,700 level and things felt a lot better.