Saturday, May 9, 2009

Week 20: Economic Calendar

Weekly Economic Calendar, From Action Economics, Businessweek

There are several interesting reports coming out this week, like Trade Balance, April Retail Sales, Producer Price index, Consumer Price index and Consumer Sentiment Index.

The first most important one will be April Retail Sales report, due out on this coming Wednesday. This report will show how’s the consumers are doing in April. Are they spending more or less?

Initial Unemployment claims had been steadily lower in this few weeks. The continue sign will be a good news. However, last Friday jobs report gave a mixed picture of overall employment in the US. The pace of layoffs has slowed down in April, but the unemployment rate climbed to 8.9%, the highest since 1983!


Wednesday, May 6, 2009

Trading Stock: Capitaland


First of all, I had to warn that not everyone can become a trader! It is only suitable for people who have high risk appetite. In order to become a trader, you need to be decisive and emotionally stable. You have to ask yourself, do you have two of this? If the answer is yes, then, I would say congratulation to you.

The first thing you need to learn as a trader is to manage the risk. Without that, you will end up like a gambler and losing all your money.

2nd thing, you never borrow money to do trading. It’s absolutely like kamikaze action if you do that. It’s like double edge sword when you are losing the money!

How to manage the risk? It’s a good question. Most of the trader will ask this. You need to have a trading plan and understand your tolerance for loss and profit as well.

For example, if I am trading forex, I will have the trading plan as below:

i) What is the odd for losing and winning?
If the odd is losing 1 tick vs winning 2 ticks -> in
If the odd is losing 1 tick vs winning 1 tick -> out
Always maintain the same risk and reward ratio.

ii) Cut loss and taking profit point?
-depend on your tolerance. You shouldn’t aim for the top and bottom, as most likely you will not get it.

I use an example of a trading stock (Capitaland) to explain how to use candlestick and technical indicator (Slow stochastic) as guidance.

From the chart, you see two selling signal and one buying signal:

i) First signal is an evening star, which the candlestick has a long tail at up body. It is a reverse signal, corresponding with stochastic that pointing lower trend.

ii) Second signal is bearish engulfing pattern .Again, it is confirmed by down trend of stochastic!

iii) Third signal is bullish engulfing pattern. The signal is again corresponding to uptrend sign of stochastic!

Tuesday, May 5, 2009

Market Outlook

Dow Jones has successfully broken through 8100. It is very likely Dow going to test 8600 soon. 8600 will be a critical resistance point. The first break through is most likely to be retraced back. It is interesting to see how it settles down, either above or below 8600.

As i had stated previously, KLCI is going to test 1000 and indeed, it not only test it and break through successfully. Now, we shall see how KLCI settle down. A rally has started. Along the way, there will be some profit taking. Let’s see how it settles down and we can conclude which direction it heading to by end of the week.

For STI, the top-notch resistance has been broken through! Too fast and too furies! This is what I can say. STI has up >5% in one day. It is absolutely absurd and amazing in the same time. The high buying volume only means one thing to me, the traders is pushing up the price, to trap speculators and those who can’t resistance the temptation of GREED! Yes, indeed this is a significant breakthrough. STI has back to positive area this year. In this case, same as I had explained previously, it is important to see how it settles down and finding a foothold.

Amazing week started with some amazing thrust from all over the World stock market!

Sunday, May 3, 2009

Week 19: Economic Calendar



Above are weekly economic calendar, from Action Economics, Businessweek:

There are some interesting events happen in this coming week. Trader will closely watch out for Stress Test result, expected to be released at Thursday.

Labor Dept.'s employment report for April will be released at Wednesday. Unemployment rate is the key for economy recovery. As long as unemployment rate stay high, the consumer spending will be slowed. Therefore, the recovery process will be longer.