New uptrend spotted in US market

A new uptrend for the US market has emerge. Time to enter market to buy. Some of the counters to watch out are as follows:

1. HongFok: Buy at 0.695, sell when price touch the line of 10 simple moving average
2. Swiber: Buy at 0.93, sell at $1
3. Allgreen: Buy at 1.14, sell when price touch the line of 10 simple moving average
4. Capitaland: Buy at 3.66, sell when price touch the line of 10 simple moving average
5. Ausgroup: Buy at 0.63, sell when price touch the line of 10 simple moving average

Pls remember to exercise cutloss strategy if you are contra trader. If you are using cash to hold, you would not need to panic even if the prices fall because you can still hold on to it.

The China Impact on Global Market

The stock market in China have been dropping rapidly for the past two weeks. At the present moment, the moving average crossover as per the chart has shown a downward pressure in the near term.

The stock rally which we have experienced was initially triggered by China stock market. And my point of view is that we might be going through a series of correction. There might be further downside to the Singapore and US market. Commodities counter will be under pressure and stock prices for them based on my view would drop a futher 10% or when the China stock market has stablise and stop dropping so dramatically.

In the mean time as a trader, you might wish to look at opportunity to short commodities related counters whenever it has rally.

5 key signal to determine whether market is pulling back

Just read a very interesting article online and decided to put the key point here for you to read. In order to determine whether is there a correction in the market, we can look at the following key points.

1. The strength of the economy must show signs of consistent growth (No market has shown consistent growth past two quarters yet)
2. Commodities and Oil prices must be consistently moving higher ( At the moment it is dropping)
3. Companies sales result must be increasing and profit achieve through increased sales, not just cost cutting. ( Companies are reporting profit due to cost cutting measures at the moment)
4. Investors sentiment plays a big part, when too many people are too optimistic about the stock prices to appreciate, it will usually go down
5. China stock prices must be increasing in order for the asia stock market to carry on rallying

The full article can be accessed here.

Differences in mentality of trader and investor

I have talked to a lot of people who confuse themeselves and fail to identify whether are they an investor or trader. In my point of view, it is extremely important to be clear and concise about this since the strategy used would then be totally different.

As a trader, you generate cash flow within a short time span such as a few days, weeks or even daily. However, the risk exposure would usually be higher since you would most likely be using leverages to achieve significant amount of profit. The amount of concentration and analysis is much more heavy due to the time factor to get your trade right. For an investors, you basically buy and hold till the right price to sell. You have the luxury of time to wait for your choice of stock to appreciate in value. The disadvantage of this approach is that you would require much more capital in order to realise profits that supercede your active income.

Alot of people who I have chatted with usually tell me that they are traders. However when suffered with a bad trade, they refuse to cut their losses and ended up giving excuses that they would pick up the shares as they are long term investors. My view is that if they are investors, they should have use a different approach to pick their stocks, like looking at fundamentals of a company, 52 week price range and dividend, etc. As a trader, we do not have the benefit of time in our trade and it is essential that we cut losses and focus on other more profitable trade.

To be honest, it will be much better for you to focus on becoming a good investor and not a trader if you are holding on to a full time job/ business. This is because stock trading requires a lot of focus and energy, it will not allow you to split your focus on to some other things.

Last but not least, the short term market condition favours the long term investors rather than trader. There seems to be signs of weakness to the rally in the market for the moment in the short term, whereas the long term trend of stocks are moving upward. This is a good time for investor to accumulate stocks whenever the market heads down, hold till prices appreciate to the point whereby the P/E ratio is above 20 and consider selling from then.