FKLI did selldown at the end. DJIA futures down -3 pts.
(sorry no charts as I have problem posting them).
Monday, August 10, 2009
10:14 am - Market Report by Bill Wermine
Dear Traders,
We held our traders club meeting at CIMB auditorium today. Nigel Foo gave his outlook and it was bearish for everything. He showed an Elliot Wave chart with the Dow/ KLSE in an extended wave 2, known as the sucker wave.
He said it will suck in the majority of players who are 88 % bullish acording to the sentiment indicator he follows. This was the same sentiment level at the 2007 top. Once the rally wanes the Dow is on course to 5000 and the KLSE to 600.
How do we protect ourselves in this scenario? Watch for no demand price bars, upthrusts and hidden potential selling confimed by volume/price spreads. In this way we protect our accumulated profits on our quality shares by exiting at the time professionals/ smart money are moving to the exits.
We played 4 video clips from the documentary Broke in America by hedge fund manager Michael Covel as he explained how the government controlled media in the US cheerleads for the vested interests such as Goldman Sachs, Obama and his band of socialists. We showed a clip of CNBC front man Jim Cramer whose job is to lead the sheep investors to slaughter by recommending hot tips to make fast money as his insider friends offload. He is nothing more than a pimp for the prostitutes he serves.
Insider sales as reported to the exchanges is at the highest level since the market top in 2007. Insiders include CEOs, institutions, hedge funds, professional investors that trade size. They are the smart money and you have to ask why are they selling when all the news is bullish ?
As a trader I try not to have opinions or make forecasts but my mind is open to views from those I respect. I then use my charts facts and logic to confirm what they say. This will lead to opportunity be it on the long side or the short side.
Based on the US Government's easy money policy- Bernenke has pumped 1.75 trillion dollars into the big US banks while slashing interest rates to 0.25 % to counter the worst banking crises since the Great Depression. The Fed's ultra easy money policy may have sown the seeds for an outburst of inflation when economic activity picks up.
The CRB Index supports this view. The CRB is a basket of all the major world commodities- grains, precious and base metals, as well as soft commodities.
As investors and the public lose confidence in currencies they accumulate commodities- witness the Chinese who are accumulating virtually all commodities as they reduce their holdings of US Bonds.
CRB Monthly chart shows a rounding bottom over the last 9 months as professionals accumulate commodities anticipating a return of inflation. There is more room to go up than to go down. The CRB supports the inflation scenario.
We held our traders club meeting at CIMB auditorium today. Nigel Foo gave his outlook and it was bearish for everything. He showed an Elliot Wave chart with the Dow/ KLSE in an extended wave 2, known as the sucker wave.
He said it will suck in the majority of players who are 88 % bullish acording to the sentiment indicator he follows. This was the same sentiment level at the 2007 top. Once the rally wanes the Dow is on course to 5000 and the KLSE to 600.
How do we protect ourselves in this scenario? Watch for no demand price bars, upthrusts and hidden potential selling confimed by volume/price spreads. In this way we protect our accumulated profits on our quality shares by exiting at the time professionals/ smart money are moving to the exits.
We played 4 video clips from the documentary Broke in America by hedge fund manager Michael Covel as he explained how the government controlled media in the US cheerleads for the vested interests such as Goldman Sachs, Obama and his band of socialists. We showed a clip of CNBC front man Jim Cramer whose job is to lead the sheep investors to slaughter by recommending hot tips to make fast money as his insider friends offload. He is nothing more than a pimp for the prostitutes he serves.
Insider sales as reported to the exchanges is at the highest level since the market top in 2007. Insiders include CEOs, institutions, hedge funds, professional investors that trade size. They are the smart money and you have to ask why are they selling when all the news is bullish ?
As a trader I try not to have opinions or make forecasts but my mind is open to views from those I respect. I then use my charts facts and logic to confirm what they say. This will lead to opportunity be it on the long side or the short side.
Based on the US Government's easy money policy- Bernenke has pumped 1.75 trillion dollars into the big US banks while slashing interest rates to 0.25 % to counter the worst banking crises since the Great Depression. The Fed's ultra easy money policy may have sown the seeds for an outburst of inflation when economic activity picks up.
The CRB Index supports this view. The CRB is a basket of all the major world commodities- grains, precious and base metals, as well as soft commodities.
As investors and the public lose confidence in currencies they accumulate commodities- witness the Chinese who are accumulating virtually all commodities as they reduce their holdings of US Bonds.
CRB Monthly chart shows a rounding bottom over the last 9 months as professionals accumulate commodities anticipating a return of inflation. There is more room to go up than to go down. The CRB supports the inflation scenario.
We also plan to post Nigels presentation on Martin's blog as we move toward servicing you via the internet. Many of you live in Penang, Kuching, Johor, Singapore and even Indonesia and it is not practical for you to participate in our gatherings. We plan to extend our research coverage as hiring hotels for presentations, travelling outside KL and advertising in the newsmedia has become prohibitively expensive.
Let us have your feedback on this. Martin and are planning to attend a workshop on creating blogs/ setting up an e coaching service next month by a prominent Indian blogger.
Here's a quote from a floor trader of S & P futures- Larry Levin
"And oh, by the way, don't expect any stock market weakness while so many billions are being shoveled out the Fed and into the pockets of the primary dealers. They'll have to do something with all that freshly minted cash....."I think it's clear folks; there is no "free market" and what is left of the stock and bond markets have become a pyramid scheme that makes Bernie Madoff look like a piker. Trade well and follow the trend.
Have a profitable week ahead
Bill
Let us have your feedback on this. Martin and are planning to attend a workshop on creating blogs/ setting up an e coaching service next month by a prominent Indian blogger.
Here's a quote from a floor trader of S & P futures- Larry Levin
"And oh, by the way, don't expect any stock market weakness while so many billions are being shoveled out the Fed and into the pockets of the primary dealers. They'll have to do something with all that freshly minted cash....."I think it's clear folks; there is no "free market" and what is left of the stock and bond markets have become a pyramid scheme that makes Bernie Madoff look like a piker. Trade well and follow the trend.
Have a profitable week ahead
Bill
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