Monday, November 29, 2010

US - Sorry South Korea, But We Are Busy Now

 
Getting Ready for War - Openly


Charles de Gaulle and Abraham Lincoln
The US, France, Saudi Arabia, Egypt and Israel are openly coordinating war preparations after the White House laid the military option against Iran on the line. France and Egypt are deploying fleets at the new UAR base of Fujairah opposite the Strait of Hormuz.


Sunday, November 28, 2010


Is Something Nasty About To Happen To Gold ?

Practically every week you would hear or read "experts" praying to gold as the ultimate save and protect all "investment". According to these "experts", gold will "protect" you against a hyper inflation with the coming onslaught of the QE2 and currency war. 

No doubt gold like many other commodities has been rallying nicely recent months. But if you use an inflation adjusted US Dollars to look at its rally, gold would need to go to 1,800 in order to beat its own historic high. This is to say if you had "invested" in gold back then , you are still in a loss position with its current high.

But I do not wish to go deeper into the "fundamentals" side of gold but would like to apply technical analysis onto its charts and try to educatedly read what is its next move. This is because of the current Korean conflict which all the "experts" are telling us gold is the greatest hedging investment during times of conflicts and wars.





At the daily chart, my attention is immediately grabbed by the presence of a nicely formed bearish divergence with the lower peaks at MACD and higher highs at prices. Then there is another monstrous bearish chart formation of a Head & Shoulder Pattern. Recent prices may have completed the right shoulder. I have marked out its neckline which is also very near to its lower Bollinger Band which make the level more important. If prices break below this line, it would signal the beginning of a massive sell downs in gold.

But I think we may have to wait for a while longer before that happens as the ADX has now fallen below its 20's signal line while the D+ and D- are wiggling around with other. The positive Stochastic is contradicting the negative MACD, all these are confirming a lack of trend in this market.

But if you have been following my writing, you would know by now, a lengthy sideway market is even more wonderful for preparing for an eventual massive breakdown. This kind of move is usually extremely profitable.

At present, the AUD has already broken down. As AUD is regarded as a mineral/commodities currency, I would take it as an additional confirmation to the bearish reading of gold. I am eagerly waiting for  confirmation from another mineral currency, the CAD as it is still range bounding.

And there is another X File kind of confirmation: -  a few days ago an adviser to China Central Bank "advising" the American government that they should sell all their gold reserves in order to cut down their twin deficits.  I notice whenever some 'big guy' starts to make outrageous remarks about a certain market, it is usually a sign that particular market has come to an end.
FCPO:- More Extreme Volatility, So Stay Out - 11/29/2010

 


I would also like to start with the weekly chart with KCPO too. The rubber band effect that I warned of last week did strike again. Prices went down almost 200 points before snapping back to a mere 52 points loss. The upper Bollinger Band is providing a strong support for the current retracement. Although the Stochastic continues to fall towards its 80's signal line, the MACD  and ADX remain strong and healthy. With price remains above the upper band, I cannot talk about any possible bearishness here.

 


The daily chart is a typical sideway market with the classic formation of D+ and D- wiggling together like worms. On top of this, the ADX is falling. Prices have got locked up within the Bollinger Band. But both the MACD and the Stochastic are negative and continue to fall. So I would pay a bit more attention to the sell signal. But I think a fast falling ADX should be a good reason that I should keep myself out of this market for a while. I would like to sit and wait out for another week to see a up and down range formed  which I would mark them out with 2 horizontal lines. The I would wait somemore for a breakup or down from those areas.

As I said here last week, I am not expecting a collapse in KCPO yet. This is also true in many of the international commodities, though some of those hot and much hyped ones like gold may be in the process of signing their death warrant. So for those of you who are taken in by the experts' talks of gold is god, be forewarned here. There is nothing in the real world that can go up forever.
FKLI:- Can We Stay Clear Of An International Crisis (Euro PIIGs, war in Koreas )  ? I Don't Think So. - 11/29/2010

This week I would like start with the weekly chart first as I feel there are important signals flashing in there. You should pay attention to the prices as they have now closed below the upper Bollinger Band. For the more strong heart traders, this is usually taken as an initial sell signal. The Stochastic has already turned negative and now falling toward the 80's signal line. When if it crosses down there, it will provide another sell signal. Even the MACD has begun to turn around and may be turning negative by the coming week. The weekly ADX has also started to turn downward , confirming the prior bull trend has lost momentum and may even signaling its end.

Overall the weekly chart has started to withdraw from its previous  bullish mode.




The daily chart Stochastic is turning positive one day and negative another. I would pay great attention to this indicator as if when it crosses down its 20's signal line, a bigger bear may just jump out. This is especially so when the negative MACD is now fast falling towards its zero signal line.  The ADX has stayed flat at 24's, indicating there is a lack of trend in the market. This explains prices jumping above and below the lower Bollinger Band. But a word of caution here, as the ADX is at 24's and not below the 20's, any new directional changes here could be one of those frightening type. This is especially maybe the case here when the D- stays above the 30's.

The current readings is that with all the indicators turned negative and falling and price closed below the lower Bollinger Band. On top of all these, there is the overhanging bearish divergence, I firmly remain convinced on the sell side. And if you have already committed the sells, place stop at 1518.

As the Euroland PIIGs crisis coming back in prominence (unlike a local "expert" claimed that they do not matter a great deal, when with most of Germany and French banks' high exposure, any meltdown  matters very much) , by the coming week we may see their next candidates , Portugal and Spain taking the centre stage. And we may even see a re-appearance of Greece. On our side of the world, with Australian Dollars finally breaking down , coupling with their high inflation and property bubble, I would not be too surprise that Australia becoming the first in Asia to face the music.

Thursday, November 25, 2010

"   Rare Earth"   are NOT really rare
   
Survey Shows U.S. Has Abundant Rare Earth Supplies


In the headlines lately has been news of China's monopoly of rare earth elements (REE), adding to China's growing clout. It would increase their leverage should they choose to reduce exports, causing REE prices to soar. The United States imports almost all of its REE from China, putting it in a position of geopolitical weakness. In light of this circumstance, the US Geological Survey (USGS) has conducted a study to map out the presence of REE found domestically. It turns out that rare earth elements in the United States are not so rare.

Rare earth elements are a group of 17 metallic elements that are essential for high technology applications. They all have unique electrical, optical, and thermal properties that distinguish them from more common minerals. REE are composed of Scandium (#21 on the periodic table, Yttrium (#39), and lanthanides (#57-71) which include Lanthanum, Promethium, and Europium.

Since most people are not geologists or high-tech engineers, these elements are unfamiliar. Yet without them, many of our current technologies would not exist, such as lasers, color TVs, certain computer components and batteries, and long-distance fiber optic cables. Newer technologies that require them include electric vehicles and photo-voltaic cells.

Rare earth elements are found commonly throughout the Earth's crust, but rarely in economically recoverable concentrations. They are often found in hard-rock deposits. The USGS study analyzed these deposits as well as placer and phosphorite deposits. They estimate that the United States holds about 13 million metric tons of REE within its borders. At a consumption rate of about 10,000 metric tons annually, these deposits can potentially meet demands for 1,300 years barring any changes.

"This is the first detailed assessment of rare earth elements for the entire nation, describing deposits throughout the United States," commented USGS Director Marcia McNutt, Ph.D. "It will be very important, both to policy-makers and industry, and it reinforces the value of our efforts to maintain accurate, independent information on our nation's natural resources."

The USGS found significant deposits in the following 14 states:

Northeast: New York
Southeast: North Carolina, South Carolina, Georgia, Florida
Midwest: Illinois, Missouri, Nebraska
West: New Mexico, Colorado, Wyoming, Idaho, California, Alaska


The largest deposits were found at Mountain Pass, California; Bokan Mountain, Alaska; and Bear Lodge Mountains, Wyoming. The Mountain Pass REE mine previously supplied the US but it closed down in 2002, due to cheaper REE prices from China and environmental restrictions. In 2008, it was sold by Chevron to Molycorp Minerals LLC which plans to reopen it in 2011.

Now that China's hold on the REE market is clear, the US and other countries such as Australia and Canada are exploring their own reserves. Development of domestic supplies could help meet increasing demands and shield industry from potential cuts in Chinese exports. In this sense, rare earth elements have become a national security issue. It should then come as no surprise that the USGS study was funded by the US Department of Defense. Thanks to this study, domestic users of REE should feel a little more comfortable to know that they are not completely dependent on overseas supplies.
 
 

Saturday, November 20, 2010


KCPO:- The Rubber Band Effect Strikes -11/22/2010


 


I was warning about the possibility of the rubber band effect may strike this market as it has been over-extending. Last week we really saw it strikes. Price went down to test a low of 3114 before snapping up again.  The Stochastic has now crossed down its 80's signal line while the MACD has turned negative. As the MACD is relatively "far" from its zero signal line, so I would not advocate a bit of caution here as the ADX continues to fall, the prior trend has fizzled out. Then please take note that  price has again closed above the upper Bollinger Band, this serves as a conflicting signal to the negative indicators.

 


The weekly chart suffers no damage for intra-week downward correction as price still maintain above the upper Bollinger Band. The Stochastic may has turned negative but it maintains above the 80's signal line, The MACD and the ADX continue to rise, confirming the trend is still intact. But as price is "far" from the upper Bollinger Band, we may see more of those rubber band effects occurring again.

Unlike many of the commodities charts, KCPO does not register any bearish divergence, so I would only look at any price retracement as a healthy correction in a strong bull trend. But with its intense volatility, it is getting more difficult to do position trading. And with the USD's increasing strength, it may be prudent to lessen our exposure in the buy side of the commodities.
FKLI:- Will Euroland's Crisis Trigger Another Selldown ? - 11/22/2010



Last week the Stochastic triggered another sell signal when it crossed down its 50's line. But the lower Bollinger Band seems to be providing a good support as prices went to test there but somehow did not close below that level. With that, the Stochastic has now shown sign of turning again. I would suggest you close the short positions and wait for a new set of signals. But any closing of below 1478 would mean the bear strikes again. On the other hand, any closing above 1517 would warrant a new long positions.

The ADX is continuing to fall indicating there is little trend in this market. With a weak ADX, you should apply the Stochastic to trade the market instead of using the MACD.




The weekly chart still has not flashed any sell signal as price stays above the upper Bollinger Band. I would watch out for any breach of 1401. MACD has turned around and point downward but it is still positive. The Stochastic may has turned negative, but it is still maintaining above its 80's signal line. The ADX has gone flat for the second week, confirming that the bull, or whatever left of it, has lost momentum.

As the daily chart is more bearish biased now, I would pay more attention to any new sell signal. The market players may be watching the latest development of the Irish and the Portuguese crisis as we may see another rerun on  Greece. As many of major German and French banks are highly exposed to those countries' debts, extreme permissive-ism may cause a public run on their deposits. 

Friday, November 19, 2010




Merry Christmas And A Happy New Year (Little Drummer Boy/Silent Night/Auld Lang Syne)
Jimi Hendrix
 Legacy, 1968/1969

Jimi Hendrix brings his cosmic cool and electric psychedelic swirl to Christmas and New Years! Jimi is backed by bass player Billy Cox and drummer Buddy Miles on the "Little Drummer Boy/Silent Night/Auld Lang Syne" medley – recorded at a rehearsal session in late December 1969 – this is no lame label or radio requested holiday tie-in, nope, the guys were really into it that night! This little 3 track EP Includes a 4 1/2 minute version of that and a 7 1/2 minute extended version, bookending Hendrix's own fun "Three Little Bears", backed by Noel Redding & Mitch Mitchell in May of '68

Available at  Dusty Groove


Soulies - The story of club soul in Britain




Keep on ...


Northern Soul - the most elusive and little understood of cult music scenes. The Northern scene is one that through the years has remained truly 'underground', it's evolvement having required absolutely no contribution from the British music business.

Imagine a raw sounding variant of Tamla Motown music, speed it up slightly, and then play it at a number of obscure venues in the midlands and north of England, and there you have it. Northern Soul is basically 60's (and some 70's) soul music, released on thousands of small independent US record labels which tried to emulate the highly successful Motown sound in the mid-1960's. These would usually have gained a very localised exposure in urban areas such as Detroit, Chicago, and Philadelphia, and in most of cases limited to just a few hundred copies.


Soul - Keep The Faith !


The interesting thing about this format is that any decent Northern track would not have been originally termed as such - it's a definition which came about following the growth of the craze for this type of music in England.

There are a few different suggestions as to the origin of the name Northern Soul - some say that it's a geographical term (ie. the northern cities of the US - Detroit, Chicago, Cleveland, etc), but the more believable explanation comes from around the early 1970's, when two distinct scenes were growing - the heavy, clucking, bassier, up-to-the-minute funk sounds favoured at clubs in London and the south, and the more thumping, vocal-based, orchestrated sounds recorded in the 1960's that were still turning up and making it to the turntables of clubs in the Midlands and North.

Soul record guru Dave Godin actually first coined the phrase 'Northern Soul' sometime around 1971 when writing his column in Blues and Soul magazine). This was in order to differentiate between the two noticeably different styles of Soul music which were becoming popular at either end of the country.


Marvin Gaye











The original Northern club was The Twisted Wheel in Manchester, which started operating in 1963, followed by The Torch in Stoke, which came to the fore during 1972-73. The most famous of them all, the Wigan Casino, hosted Northern all nighters every weekend from 1973 until 1981.

The magical essence of Northern Soul was the fact that it was never heard on the radio, or even at your local high street disco. In order to hear this music one would have to travel to an all nighter, and people would regularly travel from as far away as the west country or Scotland. On a good weekend, one might visit an all-nighter on both Friday and Saturday nights, followed by an all-dayer on the Sunday.

The beauty of traveling to an all nighter was the fact that there none of the usual problems associated with a usual night out - ie. trying to get home at 2am. None of the usual rigorous dress codes applied, either, although there was a definite style of dress which was suited to eight hours of dancing - flat soled shoes, loose trousers and baggy shirts.

Here are some typical examples of tracks played on the Northern scene:

These tracks (and literally tens of thousands of others) exemplify the uptempo feel that has made Northern Soul so enduring. There are literally thousands of recordings made in this vein, and previously undiscovered tracks are still emerging from sources in the US. It is probably impossible to identify a true all-time best track, as the sound and style is so similar on many of them, although any true 'soulie' will be able to run off a list of favourite sounds at the drop of a hat !


Taj Mahal


The style of dancing on the Northern Soul scene has to be seen to be believed. The pace of the music is up-tempo, so the dance moves that go with it incorporate lots of spins, twists, and sliding (this is aided by the use of talcum powder sprinkled on the floor).

Ever since the glory years of the 1970's, the Northern Soul all-nighter scene has been home to a unique collective of musical fanatics. One could travel to The 100 Club in London, Top Of The World in Stafford, then The Fleet in Peterborough on different weekends, and see the same familiar faces. You couldn't normally buy alcohol at these events - soft drinks such as Lucozade were usually most in demand, especially after four hours building up a sweat.



Function at the Junction, Battersea 
The atmosphere to be found at the clubs on the Northern Soul scene is still as electric as at any of the venues of 25 years ago, and alot of the old 'faces' and DJ's are now as active as they ever were.

The true basis of Northern soul has always been '60s recordings on obscure US labels. One has always been able to buy these at all-nighters from various record vendors (usually for exorbitant prices, based on rarity rather than quality), or from mail order specialists. In the heyday of Wigan, many tracks became played purely for their '100mph' uptempo beat (to satisfy the amphetamine-fuelled dancefloor), and their soulful quality was often quite debatable.

The mid-1970's saw a breakaway movement appear in the form of Modern Soul - basically danceable non-commercial soul music that was also contemporary. The venue renowned for this style of soul was The Blackpool Mecca, whose famous Friday nights were hosted by DJ and promoter Ian Levine. The most famous track from this period was probably The Carstairs - 'It Really Hurts Me Girl', a brilliant shuffling piece of soul, complete with exquisite vocals and produced to superb effect by Gene Redd.

A great deal of resentment was bred as a result of the split in the scene, caused by friction between fans of so-called Modern Soul played at Blackpool, and the traditionalists who favoured the more traditional 60's 'stompers' played at Wigan.

The Northern Soul scene is still alive today, and catering for an adult following who have grown up with this music. The internet, compilation CD's, and more spare cash (yesterday's punter's are now considerably wealthier) now account for a massive renewal of interest in Northern Soul. Alot of the activity is now centred in London, at clubs such as These Old Shoes, The Dome, and The Rocket. 
      

Tuesday, November 16, 2010



Australia is one the world's biggest producers of mineral riches. The whole national's well-beings are tied to the mineral resources and exports. That's why AUD is called a commodity currency. (same as Canadian Dollars). With the Americans' QE2 (nobody seems to be talking about the Japan's version though theirs are really the mother of them all) , every "experts" are expecting the global commodities prices will blow up. If so, then commodity currencies like the AUD should also be shooting up !

But is it ?



In its weekly chart, I take note that the Stochastic has been falling down from the overbought zone. It looks like it may be crossing down its 80's signal line soon. If such, it will be offering an intial sell signal. The MACD is turning around at the moment, but it still remain positive. The D+ , though remains above the D- has been registering lower peaks and the flattened ADX is pointing at a bull losing its steam. The upper Bollinger Band support of 0.9799 must be defended. If price is able to close below that level by this Friday, then we would have another sell signal.

The higher high achieved these past few weeks compared to the high done on November last year may be  forming  a bearish divergence. Though I must admit it may NOT be a picture perfect one. And this is NOT confirmed yet at the time of writing as we need to see the MACD complete its turning, but I would be monitoring it with a keen eye on this item.




I am getting so excited over the AUD's daily chart. The bearish divergence has been so beautifully formed with the MACD fast crashing down towards its zero signal line. The Stochastic is also fast approaching its own 50's signal line. Upon crossing down, both would offer a concrete sell signal. The D- is over the D+ which confirm a sell. Now I am watching for the ADX to rise in order to confirm a new trend which is usually important for a more profitable trade.

Prices have already gone below the middle Bollinger Band which is effectively a 20 period moving average. The lower Bollinger Band support of 0.9780 will be next  support level, when if price is able to close below that level, I think we would see a real nasty crash down.

The weakening AUD may be confirming what a small minority of the market analysts that think the Australia's economy has already long overdue for a major correction. Her inflation is high, the property market is nothing but a bubble, the mineral prices have been over extended. And Australia's economy has been closely tied to China's and China's economy bubble may also be ripe to burst . As a newly regenerated Republicans controlled Congress will definitely get tougher with their right wing "let trash the Chinese Commies" thinking. We may see many protectionism policies disguising as new trading rules that will hurt China. Unfortunately Australia is getting caught in the cross fire.

Summarily, AUD should crash down big time. It is going to be one of those extremely profitable trade.

The Secret Currency War Series:-  Is  Ringgit Going To Be Chewed Up By The Dogs ?

Regardless what the politicians say/reassure/guarantee, I think the global currency war may have already secretly begun. Ringgit is one of those "shining" candidates.

Before going into the chart reading details, I have to clarify here since the Ringgit is smaller in value than the USD, so whenever we see the prices rising, it means the Ringgit is actually depreciating. On the other hand when prices are falling (as like the last few months), it is appreciating. So when I say it is bullish, it actually mean the Ringgit is/will be depreciating and vice versa.



At the weekly chart , the Stochastic has already crossed above its 20's level while the MACD has a positive cross up. Both offer an initial buy signal. Prices have also managed to closed above the lower Bollinger Band and depend on this Friday's closing, we may even see it closing above the middle band which is flashing another buy signal. The middle band is effectively the 20 period moving average, a much watched moving average by many traders, hence its importance.  The D- is fast dropping and may be crossing below a rising D+ which will confirm a change in the cycle from bear to bull.  The falling ADX from above D- confirms the end of the prior bear trend.

An important chart formation here is the presence of a bullish divergence where prices have been falling to new lows while the MACD and Stochastic registering higher troughs. This is telling us whatever bears have been doing is merely a lot of BS - they in fact have exhaust their resources to push prices further down.

An important item that keeps me maintaining a bit caution is the distance of the MACD with its zero signal line. I actually would prefer to see the MACD nearer to its zero line to be blissful.

 


The Ringgit daily chart is really exciting as there is also a very nicely formed bullish divergence between a series of lower lows and higher MACD's troughs. The Stochastic has already crossed above its 50's signal line which I usually take it as a more confirming buy signal. The MACD is beautifully crossing above its zero signal line which is also a more confirming buy signal.  The most powerful confirming signal comes from a rising ADX that is crossing up above a falling D-. This is telling us a strong trend may be in formation.

Price yesterday had tested a new high but did not manage to close around there but instead went back down and close at the same level as its recent fractal high of 3.137. If it manages to close above that level, I am taking it as the final go, go, go signal.

It is because of the presence of bullish divergence at both the daily and weekly chart, I am reading this NOT as a mere correction or retracement BUT as a major terminal point for the Ringgit. It means that Ringgit will start depreciating strongly
for the next few months to come.

There is another even more interesting item that may be developing at its monthly chart. I do not usually pay much attention to monthly charts as I am a short/intermediate term traders. But as in the Ringgit case, I notice the Stochastic may be turning its corner at below the so-called "oversold" zone and the MACD has also started to turn around though it is still negative. Of course I would have to wait for the last trading day at the end of the month to be able to correctly read the monthly chart. If both the indicators do really successfully turn, then the Ringgit really may be going into one of those nasty depreciating cycle.


Of course this is NOT what our politicians or bureaucrats have been telling you in the media .

 

The Secret Currency War Series:- 
"   Experts " declare: QE2 = US Dollars Tumble Again !




These days every "experts" are telling us that with the massive QE2 by the American Feds would render the US Dollars into worthless papers and hot money will push up everything else. 

Theoretically speaking it is true when a country start printing money massively, inflation will follow thus render the country currency depreciating. This seems to be true in the case of Japanese Yen. But it certainly does not seems to be the case of US Dollars.

I am looking at the US Dollars strictly from the technical analysis viewpoints.






In the weekly chart, the Stochastic has started trying to cross up its 20's signal line > once crossed successfully, it would provide an initial buy signal. While the MACD seems to turning around, but it has NOT crossing up yet. The D- is still above the D+ which is telling us the bear may still have a upper hand over the bull. But the ADX has turned flat which is telling us the bear is losing momentum. The only one bullish signal so far is the price has closed above the lower Bollinger Band for the 2nd week which offers another initial buy signal.

So as far as the weekly chart  is concerned, I think it would be prudent to wait 1-2 more weeks before turning into a buy mode.




The daily chart is certainly more bullish than its weekly chart. Price has already closed above the upper Bollinger band and its recent fractal high of 78.28. A solid buy signal. And I get terribly excited with the bullish divergence found at both the MACD and Stochastic where prices recently went lower but indicators formed a higher troughs. As when the MACD crosses up above its zero signal line would add another confirming buy signal.  The ADX has been falling from above the D- and D+ confirms the end of its prior bear trend. Now the D+ has also crossed above the D- which is offering another buy signal.

With the presence of divergence , I expect US Dollars to rally strongly. This , of course, would go against all the "experts'. But like most of my previous readings on the charts, I think I should be correct again.

If you wants me to EXPLAIN the reasons behind the USD rally amidst all the "logics" and "common senses", I can't. But I can tell you that often charts predicts something that is about to happen soon - maybe more financial crisis ? Wars ? A lot of things that are actually here already, but it is only because most of us REFUSE to acknowledge them. 

Monday, November 15, 2010

One Sentence That Explains The Whole China Problem


Since talk of China and the yuan is non-stop, we thought it would be good to put the situation in the cleanest, simplest perspective we can, and that's this:

Since the establishment of modern finance, there's never been a country that's so rich  (it's the second biggest economy in the world), and so poor (GDP per capita is below Albania).


We've always tolerated protectionism and currency controls for poor countries, which is what China is. And we've never tolerated it for rich, big countries.

Thus the Paradox.

From Wikipedia, here's the 2009 rankings of GDP per capita. Note how many come before China It's obviously changed a bit in the last year, but the basic idea is unchanged.
-----------
1      Luxembourg     78,409
2      Qatar     78,260
3      Norway     51,985
4      Singapore     50,180
5      Brunei     47,930
6      United States     45,934
—      Hong Kong     42,653
7      Switzerland     40,484
8      Netherlands     39,877
9      Ireland     38,685
10      Australia     38,663
11      Austria     38,567
12      Canada     37,947
13      Iceland     37,853
14      Kuwait     37,849
15      United Arab Emirates     36,843
16      Sweden     35,951
17      Denmark     35,828
18      Belgium     35,534
19      United Kingdom     34,388
20      Germany     34,388
21      Finland     33,445
22      France     33,434
23      Japan     32,554
24      Republic of China (Taiwan)     31,776
25      Greece     29,839
26      Spain     29,625
27      Italy     29,068
28      Israel     28,581
29      Cyprus     28,504
30      Korea, South     27,938
31      Slovenia     27,470
32      Bahrain     27,214
33      New Zealand     26,670
34      Bahamas, The     25,807
35      Oman     25,635
36      Czech Republic     24,271
37      Seychelles     23,744
38      Malta     23,667
39      Saudi Arabia     23,272
40      Portugal     22,671
41      Barbados     22,272
42      Slovakia     21,245
43      Trinidad and Tobago[4]     19,759
44      Equatorial Guinea[5]     18,573
45      Hungary     18,506
46      Poland     18,050
47      Croatia     17,707
48      Estonia     17,695
49      Antigua and Barbuda     17,308
50      Lithuania     16,529
51      Russia     14,913
52      Argentina     14,525
53      Botswana     14,321
54      Chile     14,316
55      Gabon     14,297
56      Latvia     14,291
57      Lebanon     14,268
58      Malaysia     13,800
59      Mexico     13,609
60      Libya     13,599
61      Saint Kitts and Nevis     13,316
62      Uruguay     13,144
63      Belarus     12,750
64      Mauritius     12,737
65      Turkey     12,466
66      Venezuela     12,184
67      Bulgaria     11,883
68      Romania     11,869
69      Panama     11,776
70      Kazakhstan     11,679
71      Iran     10,939
72      Grenada     10,697
73      Serbia     10,577
74      Costa Rica     10,564
75      Montenegro     10,528
76      Brazil     10,499
—      World[6]     10,398
77      South Africa     10,229
78      Dominica     10,218
79      Saint Lucia     10,163
80      Saint Vincent and the Grenadines     10,127
81      Azerbaijan     9,540
82      Macedonia, Republic of     9,183
83      Tunisia     9,154
84      Colombia     9,046
85      Jamaica     8,804
86      Suriname     8,630
87      Peru     8,626
88      Dominican Republic     8,269
89      Thailand     8,051
90      Belize     7,841
91      Ecuador     7,765
92      Bosnia and Herzegovina     7,634
93      El Salvador     7,355
94      Albania     7,169
95      Tonga     7,061
96      Algeria     6,885
97      China, People's Republic of     6,778
Joe Weisenthal 

Seriously, Kwai Los Are Very Different

Morgan Stanley May Shed Quantitative Trading Unit (NYT)

For nearly two decades, the mathematical whiz Peter Muller and his secretive band of traders have helped power Morgan Stanley to bigger profits. But now Morgan Stanley and Mr.Muller are in advanced talks about splitting up. Under the plan being discussed, Morgan Stanley would spin off Mr. Muller’s unit, called Process Driven Trading, and keep a minority stake. The Process Driven Trading unit generated an estimated $4 billion in profits in the 10 years through 2006, according to Scott Patterson’s book, “The Quants.” [Since 1992] Mr.Muller stocked the group with Ph.D.’s and housed them on their own floor, away from the hurly-burly excitement of Morgan Stanley’s mammoth stock trading floor. To stimulate productivity and cerebral thinking, he had ceiling lights installed that changed color every 15 seconds.

Even though he and his unit were minting money, Mr.Muller quit working full-time for Morgan Stanley in 2001, saying, according to a short biography on his Web site,


that he realized he “can no longer find happiness in the corporate world.”


Over the next several years, he traveled to Bhutan, New Zealand and Hawaii, hiking and kayaking, with his five-pound keyboard in tow.

 He took up yoga and began writing crossword puzzles, many of which appeared in The New York Times and other newspapers


He indulged his love of music, writing songs, releasing two albums under his own label and playing his guitar on the streets of Barcelona and in New York City subways.


He also pursued his passion for poker, a favorite pastime of quantitative traders. He played in a few tournaments on the World Poker Tour. In his first tournament he came in fourth and took home nearly $100,000.



In late 2006, Muller returned full time to Morgan Stanley.



KCPO:- Into the No Man Land -11/15/2010

 

I would strongly suggest taking profit off the table now. The ADX which is above both the D+ and D- has now started to fall. A signal confirming the end of the prior bull trend. As I mentioned last:- prices are getting too far away from the upper band and the MACD's gap with its moving average are getting too big. This means the market is getting overextended and the rubber band effect will snap it back to the band.

KCPO has not flash any sell signal yet. Watch out for a closing going below the upper Bollinger Band or the Stochastic crossing down the 80's signal line. Since the chart does not have any bearish divergence, so you should treat this as a correction. 








 


The weekly chart remains as bullish as ever. Both the MACD and ADX have not shown any sign of weakness. The only item needs to be cautious is prices have been getting too far from the upper band. So you watch out for those rubber band effect that snap it back.

The global market seems to be entering into another new round of great volatility. The G-20 communique may say they agree to avoid a global currency war. Bu knowing politicians ( a Chinese survey once found prostitutes command more respect  than them) , they always say something and do another. Many of my FX charts are telling me exactly that - a global currency war may has already started and you should keep an eagle eye on how that is going to affect the KCPO and Malaysian equities market.
FKLI:- Bears Bear Its Claws -11/15/2010



Like I said last week:- do not get too carried away by the extreme bullish talks from the market "experts". The bearish divergence may just play out as when you are least expected. Price broke below the upper and middle Bollinger Band in 2 days and may just go break below the lower band by the coming week. The Stochastic has crossed down below its 80's signal line while the MACD has turned negative. What is more alarming is the D- has crossed up above the D+ for the first time since late June last year. All these triggered an initial sell signal.

Please take note the ADX has begun to fall. This is confirming the prior bull trend has ended, at least temporarily.

The next set of sell signals would be to watch out for are price closes below the lower Bollinger Band; when MACD crosses down its zero signal line and the Stochastic crosses down its 50's signal line. All are usually more confirming sell signals. Place stop at 1518. 

 



The weekly chart has not turned bearish yet. The MACD remains positive and the Stochastic remains above the 80's signal line. Prices still stay above the upper Bollinger Band. The ADX has stopped rising and turned flat, this is telling us the prior trend has stalled. Watch out for next Friday's closing of below 1485 for an initial sell signal at the weekly chart.

For the past few weeks and during the G-20 meeting, every talking heads in the world seem to be raving about the end of the USD (again !)  because of the QE2. But charts have been telling me quite a different picture. You would want to be informed that the USD has been rising for the past 5 days. If USD is able to close above 78.48 in the coming week, the world may see another shock and awe type of appreciation. And if the USD is able to rally successfully, we may see the commodities  collapsing dramatically.Or maybe I should ask: have it already started ?  A few days ago, a local financial writer who is a hardcore buy and hold addict was questioning unashamedly  have anybody talking about the PIIGs crisis again. His reasoning  being that many crisis are just alarmist and any retracement or corrections merely serve as an opportunity to buy some more. Maybe his info input is on a slow motion. Hello ????? Ireland and Portugal are back in the news as their crisis never really went away. If these 2 fall, many of the EU banks will be screwed , big time, due to their huge exposure .

No matter whether you are trading or investing in a financial market, timing is  always of the utmost importance.  An old lady once told me:- " A failed speculator will turn into an investor." Yes, it certainly never make sense if you can reap a 50% gain in a month, then why bother with a 50% gain buy and hold for 5 years ?

Thursday, November 11, 2010


再谈门口狗

中国领导没有面对其他国家领导人, 每当任何重大国际会议前夕他们会将人民升值:-

 
LOL ! China Lecturing America On Capitalism !



There's nothing quite like being given a lecture on capitalism from the Chinese.  By the way, they're doing it better than we are these days - and their version includes armored tanks!

But ......

Today's QE2 quotable belongs to China's version of Standard & Poors, the ratings agency called Dagong Global.  Here's what they had to say on the subject:

    "Though it is likely for the current loose monetary policy to postpone the occurrence of difficulties, yet in the long run, it will be proven to be a practice resembling drinking poison to quench thirst."


Instant classic, put it on the board.  Winner Winner, General Tso's Chicken Dinner.

Source:

The mood ahead of the G20 summit in Korea is turning ugly. America's actions - especially its policy of deliberate dollar devaluation through quantitative easing - are looking increasingly irresponsible and even reckless to its creditors, some of whom are starting to snap.

The Federal Reserve’s policy of buying $75bn of Treasury bills per month between November and June 2011 may well be a short term palliative to the US economy and, who knows, it might even deliver the hoped-for upturn in US employment.

The fear among America's international creditors, however, is that the policy known as QE2 will cause them no end of pain, especially if it is followed by QE3, QE4, QE5 and maybe even QE6. Every time the Fed prints money, the dollar shrinks in value and their chances of being repaid seem to diminish.

The weaker dollar will also limit the emerging and emerged economies' chances of being able to export themselves to prosperity.

The Dagong Global Credit Rating Co, a Beijing-based credit ratings agency founded in 1994 and closely intertwined with the People’s Republic of China government and Bank of China, is particularly narked by Washington’s self-serving monetary and fiscal policies.

This is the agency that, in its first foray into international ratings in July downgraded several western nations declaring that its goal was to "correct the defects" of the existing system and offer a counter-weight to Western agencies such as Standard & Poor's, Moody's, and Fitch.

In a 10-page report headlined 'Surveillance Report for Sovereign Credit Rating The United States of America', Dagong said it had further downgraded US debt from “AA” to “A+” with a negative watch. The ratings agency said America's policy of deliberate dollar debasement through QE2 “severely harmed the interests of creditors" and meant the US could no longer be trusted not to renege on its debts. In a classic passage, the ratings agency said:

    "Though it is likely for the current loose monetary policy to postpone the occurrence of difficulties, yet in the long run, it will be proven to be a practice resembling drinking poison to quench thirst."

Dagong said the US's economic and fiscal model was broken and that Ben Bernanke’s Fed had embarked on QE2 without taking the interests of its creditors into account and, indeed, against their will. For good measure, Dagong added the US was dissolute, at risk of insolvency, and at risk of triggering a second global financial crisis.

Here are some choice excerpts from the ratings agency's report:

    "Dagong has downgraded the local and foreign currency long term sovereign credit rating of the United States of America (hereinafter referred to as “United States” ) from “AA” to “A+“, which reflects its deteriorating debt repayment capability and drastic decline of the government’s intention of debt repayment."

    "The serious defects in the United States economic development and management model will lead to the long-term recession of its national economy, fundamentally lowering the national solvency ... Analysis shows that the crisis confronting the U.S. cannot be ultimately resolved through currency depreciation. On the contrary, it is likely that an overall crisis might be triggered by the U.S. government’s policy to continuously depreciate the U.S. dollar against the will of creditors."

    "...In essence the depreciation of the U.S. dollar adopted by the U.S. government indicates that its solvency is on the brink of collapse..."

    "Outlook: Dagong believes that the occurrence and development process of the credit crisis in the U.S. resulted from the long-standing accumulation of the contradictions in its economic system; the U.S. debt burden can be relieved only to a certain extent through large-scale printing and issuance of the U.S. dollar; however the consequent decline of the U.S. dollar status and national credit will block the debt revenue channel which is vital to the existence of the United States to a greater extent. The potential overall crisis in the world resulting from the U.S. dollar depreciation will increase the uncertainty of the U.S. economic recovery. ... Given the current situation, the United States may face unpredictable risks in solvency in the coming one to two years. Accordingly, Dagong assigns negative outlook on both local and foreign currency sovereign credit ratings of the United States."
 
 
 

Wednesday, November 10, 2010

Something To Warm Everybody's Heart



Quantcast


岑碧泉(左)和岑堯寬(右)兩位媽姐,為伍家工作多年,已超越 主僕之情

當今天勞資關係陷於只計利益,不問人情的時代,舊時代的僱主情義仍 然存在,恐怕就如那些海洋中活化石魚類一樣,只會被現代人視為落後文化表現。

今天多份報章刊載,永隆銀行前大股東伍氏家族,為紀念服侍他們家 族逾 60年的兩名已故家傭,以家傭岑堯寬、岑碧泉名字,捐助浸大一個癌症研究中心2000萬,並將中心冠名為「岑堯寬岑碧泉紀念癌症炎症研究中心」,以作紀 念。

用兩位為家族服務一生的家傭名字,作為捐贈大學的冠名,後有沒有來者,那是未可知,但肯定是以往未有人做過!據伍家的伍步 莊憶述:「岑堯寬與岑碧泉 兩姊妹,戰前時候約 20歲左右便開始服侍他們家族,「已經跟咗我哋 60幾年」。直至 80多、 90歲,姐姐岑堯寬因患上胃癌,而妹妹岑碧泉則因患上肺癌,先後離世。之前大姐負責打理家務,而細姐則負責廚房煮食,各有分工。她兩對家人照顧無微不至, 每逢下雨天,便會準備雨傘給外出家人,以免家人濕身受凉。抗日戰爭一家人走難離開香港,大 姐更負責背着她的一名小弟弟,長途跋涉跑到廣西。」(引述自生果 報)

而家族另一成員伍步剛則指:「兩名家傭盡忠職守,協助母親打理家務,並帶大他們六名兄弟姊妹,恍如自己親人,不幸兩人分別 患上癌症而去世。所以今次捐款 2,000萬元給浸大癌症研究中心,並以她們名字命名作紀念。」

如此僱傭如親人關係,今天香港可說不可能看到,回首以往,究竟,香港人與人之間關係、僱主和員工關係,隨著時間是進步了, 還是倒退了?


The truth is that markets are inefficient




The Efficient Market Hypothesis claims that stock prices reflect all available information. According to the proponents of the Efficient Market Hypothesis, investors can’t beat the market indexes by stock picking. They say investors trying to find a secret formula are wasting their time because stock prices follow a random walk. Interestingly, this theory also implies that a monkey (not Insider Monkey; our monkey is the smartest monkey on Wall Street and doesn’t waste time throwing darts) selecting stocks by throwing darts at a newspaper’s financial pages can perform as well as a portfolio manager named Josef Lakonishok who picks stocks by using quantitative methods. Their claim: you can’t beat the market, but the market can’t beat you either (before expenses, of course).

Unfortunately, individual investors actually do worse than dart throwing monkeys: they manage to underperform the market even before accounting for expenses.  How do individual investors manage to lose money in the stock market?

A study by Barber and Odeon (Journal of Finance, 2000) shows that an average household with an account at a large discount brokerage firm underperforms by an average 15 basis points per month based on Fama-French’s three factor model. This is based on gross returns (before expenses). Another interesting finding of this study was that an average individual investor would have been better off by not trading. Barber and Odeon compared the returns of stocks an individual investor sold to those they bought. The stocks these investors sold performed better than the stocks they bought.

An obvious conclusion of the study is that individual investors who traded more frequently earned less than the average household. The returns of the frequent traders averaged 11.4% while the average household earned 16.4%. The market return during the same time period was 17.9%. Most of the underperformance of frequent traders can be attributed to high transaction costs. They not only managed to lose money on their trades (before expenses) but also waste a big chunk of money on commissions and other fees.

Barber, Lee, Liu and Odeon also analyzed all trades on the Taiwan Stock Exchange between 1995 and 1999. The results provide strong evidence for the underperformance of individual investors. The aggregate portfolio of individual investors suffered an annual underperformance of 3.8 percentage points. Meanwhile, the Taiwan Stock exchange had an annual turnover of nearly 300%. The authors wanted to know why individual investors had such an appetite for trading and then got poor results. Their only answer: overconfidence. This theory was supported when they made another discovery: In 2001, the number of day traders greatly reduced right when Taiwan introduced a legal lottery system. Before, lotteries were illegal. Subsequently, the turnover in the stock market went down by 25%.   Similar to what happens in the US, the stocks individual investors sold outperformed the stocks they bought by 76 basis points per month (using Carhart’s four factor model) during a holding period of 140 trading days.

Frazzini and Lamont analyzed individual investors’ market and style timing skills using mutual fund flows. They found that on average, retail investors direct their money to funds that will have low returns. They allocate funds from future winners to future losers. They’re also overweight growth stocks in general.

Interestingly, individual investors perform relatively well during the first 3 months, but subsequent returns more than neutralize short term gains and individual investors lose on the average. Authors contemplate that either huge flows into these funds push the stock prices temporarily higher or individual investors benefit from the momentum effect in the short run.

All these studies show individual investors are very successful at finding ways to lose money. Efficient Market Hypothesis propagators ask you to believe that individual investors lose money because they are just unlucky.

The truth is that markets are inefficient and there are investment strategies that will outperform (or beat) the stock market in the long run.


Tuesday, November 9, 2010


History of Tea Party in 4 Minutes !



http://www.slatev.com/video/history-tea-party-four-minutes/

The Original Sound Of Music People !





The TRAPP FAMILY SINGERS

Journey - Folk Songs, Christmas Carols and Chamber Music of Many Lands


'Journey' by popular demand, is the second volume of the incredible recordings of the legendary Trapp Family Singers, the inspiration for the musical, 'The Sound of Music'.

This set features many of the early sessions recorded shortly after their arrival in the United States along with their final tracks recorded during the mid-1950s and are superbly remastered.
Much of their chamber music is also included plus detailed liner notes written by noted author William Anderson who is a long time friend of the Trapp family members.

It is available at:- www.jasmine-records.co.uk



Monday, November 8, 2010

Paul Krugman: Jim Rogers Has Never Been Right About Anything And He Makes My Head Hurt


Paul Krugman won't defend Ben Bernanke much these days, but he will defend him against the ravings of Jim Rogers, who said at Oxford that the Fed chair doesn't know squat about economics.
I’ve seen Rogers in action; he seemed to me to be confused about issues like the difference between assets and liabilities. And please note that inflationistas like Rogers have been wrong about absolutely everything - this cycle (and the last cycle, and the cycle before that).


Jim Rogers Shames Oxford: 'Ben Bernanke Unfortunately Does Not Understand Economics'



Mr. Rogers is at it again, making more extravagant claims to sell books:
Bloomberg:
“Dr. Bernanke unfortunately does not understand economics, he does not understand currencies, he does not understand finance,” Rogers, 68, said in a lecture at Oxford University’s Balliol College yesterday. “All he understands is printing money.”
“His whole intellectual career has been based on the study of printing money,” he said. “Give the guy a printing press, he’s going to run it as fast as he can.”
This, at Oxford.
Rogers, who predicted the start of the global commodities rally in 1999, said investors should put money into “real” assets such as metals and agricultural products. He told students to scrap career plans for Wall Street or the City, London’s financial district, and to study agriculture and mining instead.
Rogers, who described the U.S. as the most indebted country in history, declined to comment on the performance of his own investments in commodities.
Of course Mr. Rogers has his own printing press to run, which is probably how he makes his real money:
“I’m here to sell books,” said Rogers, who lives in Singapore. “My little girls need royalties,” he added, referring to his two daughters, who are both younger than eight and were in the audience.



China vs US at G-20 Summit

China has dismissed a US proposal to impose current account targets and criticized US monetary policy, undermining hopes that the governments of the World’s 2 largest economies will find common ground at the G-20 Summit in Seoul next week.

Cui Tiankai, a deputy foreign minister and one of China’s lead negotiators at the G-20 Friday said the US plan for limiting current account surpluses and deficits to 4% of gross domestic product harked back “to the days of planned economies” (hahahahaha......). “We believe a discussion about a current account target misses the whole point,” said Mr Cui, in the 1st official comment by senior Chinese officials on the subject.

“If you look at the global economy, there are many issues that merit more attention, for example, the question of Quantitative Easing.”

Tim Geithner, the US Treasury secretary, had proposed using current account targets to accelerate Global re-balancing partly as a way of finding agreement with China which has strongly opposed US pressure for a more rapid appreciation of its currency.

In recent weeks, there had been some hints that China was favorable to the idea. Yi Gang, a deputy central bank governor, said China aimed to reduce its current account surplus to 4% of GDP in the medium-term.
KCPO:- Higher And Higher - 11/8/2010

This market provides a very good lesson in technical analysis here. Many will tell you since the Stochastic is in the so-called overbought zone that we should start selling the market. If you have followed you would have suffered great losses in shorts by now. Many say that technical analysis does not work because of this. To me, I always think it is not the fault of the tools, but it is often of the users. In a strongly trending market, we should only look at indicators like the MACD  for signals.

 


The market taking hints from the Americans' QE2 and push higher. The ADX has shown no sign of weakness as it continues to climb higher. Since it remains above the D+, you should keep an eye on this as this is usually an overbought sign in a trending market. Place stop at 3090.

 


The weekly chart is also as bullish as the daily's. ADX continues to rise which is telling us that the trend is strong and intact. Prices is way above the upper Bollinger Band . So is the MACD. But sometime when prices get too far away from the band, they tend to go back down to hug the band again.

Like many of the commodities markets, CPO is riding the wave of the American QE2 and perceived resulting weakness in the US Dollars. But as far as the USD Index chart is concerned, that perceived weakness may just be "perceived". My reading is that it is getting increasing bullish. Any push above 77.95 may see the mother of all bulls returning to slaughter the current bears. 

FKLI:- Watch 1531 - 11/8/2010

The market gapped up on last Monday but again failed to follow up with more upside and volume. The Stochastic is now in the overbought zone while the MACD has begun to turned positive again. With the ADX staying flat,  I do not like this market very much except to say it would most probably drift slowly towards its last historic high of 1531. That level would act as a strong resistance and I would think the big players would push it a little beyond to set a bull trap. I am not very convinced about the current move because the presence of negative divergence.






I would not go against the trend by entering into shorts at this moment but neither would I place huge bets on the long side. But I would keep my longs and place stop at 1504.

 

 

The weekly chart continues to stay bullish as the MACD and ADX are still rising.

Summarily speaking:- Stay long and watch 1531. Since there are divergences, so you should NOT get too carry away as the big bad bear may be lurking behind the woods getting ready to jump us.