-Bonifasius Trading-

I really regretted I did not notice this graph before. But there is no point of it.

Time to analyze it on the reason why I’d purchase the stock/ option of the stock if i’d have seen it

FMG (Fortescue Metal group), an Iron ore mining company that would rival RIO Tinto and BHP in Australia. BUY 18th Sept 2008

1.The trading volume has steadily increasing for the last 5 trading days.
2. On 16th Sept, there is a ‘false’ hammer candle stick on rising volume (slow) and on 18th the hammer reversal showing a significant change in volume increase despite a very bad day from US Market.
3. Watch stochastic from 11 and 17th of September. WHILE THE PRICE IS MAKING A LOWER LOW, THE STO INDICATOR IS MAKING A HIGHER LOW.
4. on 18th , while the price is suffering (hammer reversal), the STO is INCREASING!!!
5. Should purchase a little ,and if it is an up day the next day, BUY MORE

A while ago, when my OBV indicator had an issue, I tried on AD indicator. I should not overload myself with too much indicator or i would get confused, but briefly, just for the sake of understanding, I google it.

I chose the information tab from stockcharts.com and I found that the nature of this indicator is quite interesting.

Stockcharts gives complete explanation on how does it work and how can you apply it on your trading. 

The last picture is from my trading platform of AMAT (APPLIED MATERIAL)

Oerlikon and AMAT is currently the only manufacturing with turnkey solution for thin film Solar PV cell.

As you can see, often OBV and AD indicator moves on a different direction.

I’d talk more on this after i get a better grip on the indicator.

1. ER (Energy Renaissance)
If the last 20 years have been the age of IT (information technology), the future will be for ER. It is slow, it is infant but if China keep saying ‘American has 100 years to pollute the world, this is our time, let us be’, Anyone…. Any country, Any companies who own the technology will have the leveraged , just like How iT is so unavoidable, no-man can avoid clean energy.

There are a few candidates, and I will cross out bio-energy due to the rising cost of food:

a. Solar
The point of having a solar power is to get the panel so SO SO very cheap and higher in efficiency plus better performance under a cloudy sky! I would envision a city like singapore/dubai or HK in which the solar panels blanket 3 Dimensional space on BIPV. Clearly, installing it on the rooftop or building a solar farm is wasting a lot of space and impractical. But Imagine that Solar cell is so efficient, so SO cheap that they can afford to blanket the whole building wall (with great colour pigmentation), windows and the rooftop. Where the integrated panel can be easily removed (once it reaches an un-acceptable efficiency) to be then sold somewhere else or replaced with a new layer.

The race against $1/Wp cost barrier is achievable according to Oerlikon solar by 2010 in 1Gw production plant. But, by 2008 their total shipment is only 350 MW, and I’d be very much wanting to believe that they can triple their production and installation capacity in 2 years time. That is also not so mention if their ’stabilized cell’ does not deteriorate in the following years. and it is a manufacturing cost, not sales and installation cost.

Everyone can be excited with the amount of capital pumped in Thin film PV, but the future is still far ahead. The good news is it is THERE!, it is MOVING!, it is GROWING!
Theoretical cost of it per watt peak of module is 30c (excluding substrate). If this to go down,… I WILL NOT CARE if the efficiency is 5%, if i can get 10c/Wp module, I will blanket my whole building , roof , windows with it! All i need is cable , no fuel for the next decade..!!
‘JUST KEEP THE SUN SHINING”

b. Wind
c. Nuclear

FA is where i started and slowly to come and approach TA and has been working quite well for me.

Is it possible to predict future from the ‘past/history’ ? , Well, it has been a debate and TA is not about predicting future from the past and TA is not a science as well.

In my defense, TA is probability theory based on price and volume movement. Some people, or most people purchase an equity based on their ‘mood/feeling’ or how fundamentally sound is the general and specific economy.
TA is about cutting your lost small and letting your profit to run.
-yes, you can still make money consistently although you are wrong most of the time.
-yes, you can still lose money consistently although you’re right most of the time.

With the current volatility in the market, the direction is unclear. I am still holding a view that this thing is just waiting to collapse. What will happen if I can get a job next year, I have no idea.
am I scared? Just like everyone, but whoever it is, the collapse may not be isolated.

Fed is still struggling to do ‘quick patch’ the economy, but they’re treating the ‘patient’ not healing. And at times like this, I am very very tempted to analyze the situation with FA.

I need to stay consistent with my analysis way… although the sector may be chosen with a little FA help

This post it on Fundamental Analysis;
Disclaimer: I do not normally post on FA, and any information is based on author’s assumption on the current market condition.

Dow Jones and S&P500 raised more than 7% in 2 trading days on last Thursday and Friday. With Fed pleading to inject and rescue the troubled financial market.

A number is out, $700-800 billion dollar, which equate to around 1750-2000 dollar/ citizen of US (assumed to be 400 million) to bail out those owners who cannot pay out their credit.

Do US Govt has the money? … Well, NO… and this will put a greater dependency to gulf/oil producing country , spore , china and japan as they’ll print MORE BONDS and Debt!

I bet they’re getting smarter as Chinese wants 49% of Morgan Stanley and Spore Temasek must be eyeing for better chunk of Merrill Lynch (unconfirmed).

Back the rise of US -stock. Has the confidence been restored?
I am very much doubt about it.

1. If i would have to speculate, I tend to believe that the FED is buying into the market to interfere as they also start to crack down on ’short’ selling of Hedge fund. Anyone in the right mind, will not resurrect and snap Citibank and push it up to 25%

2. AUD within less than 2 months goes from .98/USD to less than .80/USD!!, the interest rate merely change by a slight and AUD lost nearly 20% value. (good news to exporter and overseas student, and bad news for local OIL Price). While oil price has dropped 30% from its top nearly $150/barrel, due to 20% drop in AUD value, the price of oil on local pump is only down by a mere 10-12% to currently around $1.50/liter. Strengthening of USD indicate a flow out of capital as USD has been strengthening towards Euro as well.

3. Rise in commodity price. If Stock is not a safe place to park your capital, and cash is no more the king (anyone holding AUD will lose 20% value in less than 2 months). then they’d hide behind commodity price. OIL price jumps from $93-$94 to nearly $100 in 2 days, Gold price spikes up, and most of commodity like soybean, and metals is also up….

I have some sectors that I am quite bullish about in the future.. and I’ll make some suggestion (Disclaimer ON again) very soon. ….

I met my old friend’s housemate today, an experienced 2 years++ trader at ISX (Indonesia Stock Exchange). Lets call him Andy.
He is a fundamentalist, but he does still use some TA indicator as well.
I Have been out of ISX for 2-3years now tho most of my relative still trade there.

Andy and I had a discussion on the FA and TA approach…. and he mentioned something quite hilarious

People say, if it is bullish , it is like climbing a ladder… slowly going up, but if it is bearish, it is like jumping off the window!! hahaha

I will not to look back to tell a story of my old time sake back in JSX (Jakarta Stock Exchange before it is being merged with other local bourse to crease ISX).

But looking at the chart of AAPL, GOOGLE and BHP last night, made me realize that this bearish trend is coming to STAY!

Lehman Brother has just filed for bankruptcy (the institution that survived for nearly 160 years, surviving 30’s depression and many more ) , Merrill lynch is sold to BOA after capital injection from TEmasek and Dubai Sovereign fund And asset sales cannot keep up with the asset writedown and bad credit.

Where is this going,…… i believe we’ll be seeing more red candlestick (if you’re not chinese in china) in the future.
This is the bear Cycle.. and the volume on OBV has confirmed that the distribution is HAPPENING!
Google OBV level and Apple is exactly the same as before they took off about a year or a little more ago.

if you’re a stock trader (especially a fundamentalist) with a ‘Long’ position and strategy, it will be wise to pack your bag as CASH IS KING now!
AUD plummet from 0.98 to below 0.8 (nearly 20%) in value in about 2-3 months. Where has those money flew into? Nobody knows, …. USD has strengthen, Oil is falling as the speculator realize that it is time for them to liquidate their asset and to keep it under a safe drawer.

Where can you hide? As for now, the smart is the one who would survive.

Is there still an opportunity? Fortunately, The answer is ‘Yes’…. =)

I realized this suddenly just now that the only reason why I believed that S&P 500 chart may be bullish is
1. Making a higher low (which is a valid bullish indicator).

2. MA 20 is now crossing above MA 50.
This IS NOT always valid to indicate a bullish indicator.
ONLY IF RISING MA20 crossing above a RISING MA50, it will indicate a bullish trend is formed.

Recently, I have been putting more attention on William J. O’Neil book’s of Short trading. Well, the book is thin and mostly it is about a single short strategy of trading ( Head and shoulder formation followed by 2-4x failed attempts to break above MA 50).

To note that most of his charts is weekly or bi-weekly chart represented in a single bar. therefore, my analysis on the current S&P 500 is experimental. I would also assume a hermeneutical effect from reading the book recently, however, this is just an attempt to recognize a chart pattern. 

The figure of the latest S&P 500 is shown as below:

On the top left hand side, (sorry i couldn’t edit the picture on my mac), there are 3 horizontal bar, and I’ll call them A, B and C. starting from the left hand most of it.
A= Left shoulder
B= Head
C= Right shoulder
The pattern fits the criteria in which the right shoulder should be lower than the left shoulder. (It would simply explain the index fallt in the next few days afterward).

Then there on the right hand side, there is 4 lines pointing at one direction upward. Note that the blue line is MA50 lines, the 4 lines are drawn based on the daily chart of the candle stick trying to break the MA50 and failed.
On thursday, S&P dropped 3% below its support level 1253 ( draw a mental picture of this line).

The Question left to answer is,…. with the current fundamental of US market, it may not be long after the election that the crash may happen. I am still very very skeptical that the worst in the market has over yet. So,.. is this a signal to shift the strategy to bullish setting? hmm,…. we’ll have to see….

I posted the S&P chart few days back, and at the time, i believed that the chart does not show a strong trend of either being bullish or bearish. 

Though i note that the chart is making a “HIGHER LOW” and “the MA 20 is moving above MA 50″, which is a signal of a chart to turn Bullish. However, the gap between MA 20 &50 with MA 200 is so huge that this may just be a short lived bullish. 

I took 2 pictures of the current S&P500  for better view (Click on image to zoom in)

- The chart is not consistent on down trend line ( 5 trading days ago , a long green candle ) , however it is consistent with today’s closing. My gosh. 

- This is an unlikely Flag pattern, and anyone who would have assume it will have to bite a bitter pill if they do not wait for the next day confirmation. the chart simply punch out of the flag and fall down, “premature”.

- This was then followed by “Bearish Harami” , Doesnt look good eh? 

http://www.hotcandlestick.com/directory/Bearish%20Harami.htm  

-on 2nd September, it is a red candle with LONG upper head, the chart is opening so high that it was pulled down during the mid day…. CERTAINLY not a good sign! 

-This 3 condition in the last 5 trading days may confirm the existence of bearish trend, but…. the MA 20 that is growing the gap distance with MA 50 also telling a bullish trend…. 

-A final note that a head and shoulder formation is possible but  it will not be considered unless it is crossing below MA50 again. 

This is why I’m laughing… “Not entering market yet”, but I believe it may be a start of a Bearish again from now.