Week 22: US Economic Calendar

Weekly Economic Calendar, from Action Economics, Businessweek

Last week, US Leading indicator has increased 1% in April, following a 0.2% decline in March. This is certainly a good sign. Economist at The Conference Board suggests that the leading indicators shows that the recession will continue in the near term, the declines will be less intense. The question is how long before declines in activity give way to small increases. If the indicators continue on the current track, that point might be reached in the second half of the year.

Housing report will dominate in this week activity. Housing activity has show clear signs of stabilizing. As I had stated previously, housing price and activity will determine how fast US economy can recover from contraction. The most badly hit states, like Nevada, Arizona, California and Florida have shown sign of encouraging sales. The existing home inventory has to go down before any significant pick up of new home construction activity.

Like what Warren Buffett say, house is mean for home stay and not mean for speculation!

Warren Buffett: Things Gonna Be Tough a While

Wk 21: Economic Calendar

Weekly Economic Calendar, from Action Economics, Businessweek

This week main focus will be the Leading Indicator & the Federal Meeting Minutes. The Federal Minutes most likely will suggest that the worst is over and coherent with the recent market rally tune.

It is interesting to see how the HomeBuilders’ Survey fares this Monday. This survey will showcase Homebuilders’ confidence and giving hints on the housing market. The housing price is still dropping, but no longer as fast as last quarter of 2008.

Market Outlook: Fantasy vs Reality

TABLE 1A. ESTIMATED MONTHLY SALES FOR RETAIL AND FOOD SERVICES, BY KIND OF BUSINESS--April 2009

*Estimates adjusted for seasonal variations and holiday and trading-day differences, but not for price changes.
(Total sales estimates are shown in millions of dollars and are based on data from the Advance Monthly Retail Trade Survey, Monthly Retail Trade Survey, and administrative records.)

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $337.7 billion, a decrease of 0.4 percent (±0.5%)* from the previous month and 10.1 percent (±0.7%) below April 2008. Total sales for the February through April 2009 period were down 9.2 percent (±0.5%) from the same period a year ago. The February to March 2009 percent change was revised from -1.2 percent (±0.5%) to -1.3 percent (±0.3%).

Retail trade sales were down 0.4 percent (±0.7%)* from March 2009 and 11.4 percent (±0.7%) below last year. Gasoline stations sales were down 36.4 percent (±1.5%) from April 2008 and motor vehicle and parts dealers sales were down 20.7 percent (±2.3%) from last year.

I had stated previously that market had running too fast and too furious, with the expectation of economy recovering by end of the year. US April Retail Sales report serves as good reminder that US economy still in the contraction! As long as the unemployment rate is not reducing, together with bleak outlook expectation, I am afraid that consumer is not going to spend more.

There is always a retracement after the market reach new heights. It is interesting to see whether the market break the support line today.

STI support line = 2133

KLSE support line = 993

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!

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!

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!