Right again…. as I was saying in the previous posts and the free webinar we had the other day, with the Chinese govt stimulating their economy but US growth that may push the rate hike,,,, I don’t know if it’s any good to be in the market for “medium-term and long-term” investors. Those who are bargain-hunting better be actively monitoring the market because the prices can go downhill fast. Look at last night’s session …

It’s because there were US Fed officials are saying the interest rate hike is still in the cards. Given that:
US GDP grew 3.7% annual rate, beating consensus
Jobless claims dropped
— and you know the jobs data is what the Fed is watching.

So watch for signs of economic strength that will rock the boat.

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China is the single reason why stockmarkets are falling. Yes, even if the US economy is growing, and EU economies are benefitting from record stimulus. I talk about it all the time in my Low-Risk High-Reward Investing workshop. There are market movers that we have to know about. See, the world is interconnected like never before. Money travels in the click of a button and without borders. Let me give you a backgrounder — Chinese government officials have been on a mission to restructure the economy and “spreading the wealth” through social programs, so they say, the 10% per year growth is gone and will be replaced by a target of 7%. One would think, that it would follow that there would be less demand for commodities like iron ore, copper, coal, oil, that benefitted from the government-funded infrastructure projects. Some say the corruption crackdown which made luxury goods “a must” are hurting consumer buying. Also, China’s exports are being sent to countries that have been in recession or slow growth > Japan, EU, United States (which, even this year had a negative quarter!). However, China’s stockmarket was rallying until June this year, fuelled by debt and perhaps the new investors’ enthusiasm for stock investment given that real estate, the more traditional investment hit a wall, and this created another bubble which has been unravelling since. So if you want to know why the markets have been falling – let’s go back to what I’ve just said and hinted last few blog posts — there was a disconnect and maybe the natural or market forces are in the process of rebalancing. Although Chinese government is fighting this by propping up the already expensive stockmarket. Go figure.

So last night, we got the rate cut. I won’t blame investors if they get into investments and ride “good news” then get the hell out for fear of further slowdown. So as mentioned in my Facebook page HighHeeledTraders.com
the growth or slowdown in China is not yet fully understood. The rate cut was a mere 25 percent. Too little, too late and frankly, with the problems they are facing, not enough.

So people are asking, which countries are least affected by China and are experiencing high growth? Major markets like India, Philippines, Thailand who have limited / least reliance on commodity exports to China’s manufacturing industry, have consumer-driven economies are key. Add to that, little to no geopolitical issues (so Turkey will not make it to this list as it is very close to the Syria-ISIS hotbed)

I posted a video yesterday here about the areas where you could invest your hard-earned money and an article from Bloomberg appearing today (here) echoing my claim on where the safest (and best) investment destinations are because they are not dependent on China and are growing at the top rates in the world.

http://www.bloomberg.com/news/articles/2015-08-25/safest-emerging-stocks-in-markets-with-least-trade-ties-to-china

And if you want to know “Is it time to buy” or as a long-term investor with holdings in the red, is it time to cut losses and wait to buy at the bottom – here’s my webinar for you!

Title: Is it Time to Invest or Will the Market Slide Again?

Description: Bargain hunters are happy seeing stock prices fall, but is it time to buy again or will the market slide again? This webinar will help you determine the risks in the current market, and start you off to creating a Low-Risk High-Reward Investment Strategy.

Date & Time: Thu, Aug 27th, 2015 at 8:00 pm SGT

Registration

Please register for the above meeting by visiting this link: http://highheeledtraders.enterthemeeting.com/m/PMRC6YUR

Once you have registered, we will send you the information you need to join the webinar.

https://www.facebook.com/charmel.delossantosmarcial/videos/10153418670569792/?l=1830595368612364610
—————-

Charmel is a full-time tradermom and author of a stocktrading book for women (that men also enjoy!) “High Heeled Traders” helping individual investors like you achieve your life goals with their investments.

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Just announced China cuts interest rate effective Wednesday.
Nevermind the other problems. Stockmarket CPR this is.
http://www.bloomberg.com/news/articles/2015-08-25/china-lowers-interest-rates-for-fifth-time-since-november

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Attended the Invest ASEAN 2015 Manila leg organized by Maybank and it was a fantastic event that reinforced what I believe all along – that women and Southeast Asian countries with its growing middle class, consumer-driven economies and educated working women are the consumers to focus on, and that will create tremendous growth for investors for years to come. With the stockmarket rout happening globally, we are well-poised to take advantage of undervalued companies that are already reaping benefits of being resident in ASEAN countries. (ASEAN – Association of Southeast Asian Nations composed of Philippines, Thailand, Brunei, Malaysia, Indonesia, Singapore, Vietnam and neighboring Myanmar, Laos, Cambodia)

Check out the research from MasterCard / Maybank that makes the Invest ASEAN campaign all the more exciting!

Back to the stockmarket rout, the Chinese stockmarket again shed 7.6% “Government intervention has dropped substantially,” Michelle Leung, the chief executive officer at Xingtai Capital in Hong Kong, said in e-mailed comments on Tuesday. “The reform-minded camp within the government that favors letting the market do its work seems to be driving decision making right now.” I just said this in my blog post yesterday, that the Chinese government (or any govt) can’t prop up a dropping overvalued stockmarket (see thy wisdom!) and we can see there are Asian indices rebounding – possibly from all the value buys that can be found — these markets which have a consumer economy and less dependent on the weakened manufacturing / export industry — and dare I say, less government meddling!

Chinese Stocks article :
http://www.bloomberg.com/news/articles/2015-08-25/chinese-stock-index-futures-slump-as-market-rout-seen-worsening

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UPDATE – Aug 25, 715pm China cuts interest rate effective Wednesday
http://www.bloomberg.com/news/articles/2015-08-25/china-lowers-interest-rates-for-fifth-time-since-november

“Wait” that’s what I say to people asking me if the market selloff is over and it’s time to buy. I see articles and “gurus” talking about buying these “cheap” blue chips. I understand and also want to pick up bargains, the thing is, they could get even cheaper! AAPL was down to 105 level last Friday, but now just before open it’s at $99 (how low can you go!). There are experts who say the market is over-reacting, but I tell you what, the market is always right. Sentiment is just not improving right now, so why add to more losses? Some are busy talking about WHY the market nosedived. I wouldn’t worry about that now, I would be looking for how the market can recover.

What to watch out for : Economic stimulus – why the Chinese government “supports” the stockmarket the way they do like buying shares is just not going to work, they need to make the whole economy grow (not just the stockmarket companies stock price). The thing is, China has problems they want to address like too much debt (causing housing bubble and that stockmarket bubble – article here), and perhaps secondarily but still necessary to be fixed — poor environmental management, corruption etc so just the usual stimulus by way of interest-rate cut is going to make existing problems worse.

The US Federal Reserve can also add to optimism IF they hold off on the interest rates. But any real decision comes mid September so, there’s some waiting needed there.

We talk about this and more market moving actions in my Low-Risk High-Reward Investing Workshop and I am happy to announce that we will be offering it as a monthly webinar pretty soon!

Meantime, it’s a waiting game on what stimulus and other game plan will be on hand to arrest this downslide. It’s a bear market all around, except perhaps in the US, but it might come soon.

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Last night, the Fed was scheduled to release its Minutes of the last meeting, this kind of event usually inspires a lot of caution and volatility, lately because of interest rate hike possibilities, (for sure nobody wants to pay more for interest on their home loans, car loans etc) and that’s all understandable, but to get the Minutes showing concern of low-inflation which caused an upsurge in the stock prices BUT then followed with a stunning fall is very telling. It’s telling me that there is more than the rate hike that investors need to consider. There is also China’s devaluation adding fire to the pressure-cooker situation among currencies, the gold digging deep and oil sliding ($40 per barrel wow!). There is just too many assets diving and so that’s why the stockmarket has to get some selling action too,
1) take profit from winners that’s why even “defensive” stocks get sold
2) reallocate money away fr losing investments and into those that actually benefit from others’ weakness
3) markets increasingly interlinked, for example weak currencies help economies with strong exports like Japan, Germany, China obviously, and with the increased US dollar pushes down the price of gold and oil and the consequent companies with large exposure to currency movements.

In our workshops we discuss the deep reasons for this financial market moves show the strategies that profit from this volatility and market conditions. (So I am happy to tell you that we will again get to spend time in learning together with my upcoming webinars and events.)

I will send out the webinar link for registrations here in a day or two, just testing the features of my new provider.
Meantime watch these videos which I find highly informative and give further clues to the market.

http://money.cnn.com/2015/08/19/investing/stocks-oil-markets-dow/index.html

http://www.bloomberg.com/news/articles/2015-08-19/glencore-ceo-glasenberg-says-no-one-can-read-china-right-now

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Hey y’all … if you’re looking for my “freshest” update — those quick ones that you can take to market, head on to our Facebook Page here

where I post my quick thoughts for the day and critical if you want to keep your profits, or save your capital. Anyway, yesterday, I posted about the 6% plunge in Chinese shares sure to pull down US markets, which it did, early at open. Then, it flirted with positive territory only to fall back down again towards the close. Today, the Chinese stocks again went down to like 5.1 only to reverse the losses to gain 1.2% Europe is obviously in the red, so I think it would follow that the US will also be spooked at the open, perhaps opening lower then some brave souls would do some “bargain hunting”. Now here listen, there is no forever. The bull market is not forever, and so are government rescues. Chinese market capitalization is around 4.5 Trillion and guess what, no government not even the Chinese could afford to prop up the market forever — they set out a “policy statement” once the volatility goes down, they would not have to keep buying stocks. The thing is, stocks are not-so-cheap anymore, they had a good (some would say “too good”) rally last year, and on the other hand, a faltering economy / slowing growth / profts, so you know investors eventually see that “disconnect” that is seen in the valuation (Chinese stockmarket valuation is 72 while US stockmarket is 18 ) . And experienced investors see this — boom — they hit sell.

If you want to remain in the black — check the valuation of your holdings. A Price-Earnings ratio of 17 is the fair value. Above that is not-so-cheap anymore and beware, the steeper it is, the harder it falls. AAPL meantime, is around 13.2 that’s why it is a favourite for bargain hunters.

I will start doing webinars again since I’ve settled in to my new house … if there is any topic you want covered email me at charmel@highheeledtraders.com or post a comment at the Facebook Page
https://www.facebook.com/highheeledtraders.

http://www.businessinsider.com/nearly-half-of-the-chinese-stock-market-wont-be-trading-today-2015-7

http://www.bloomberg.com/news/articles/2015-08-19/china-s-stock-index-futures-decline-following-tuesday-s-tumble

http://www.bloomberg.com/news/articles/2015-08-18/china-s-richest-traders-are-fleeing-stocks-as-the-masses-pile-in

http://www.businessinsider.com/nearly-half-of-the-chinese-stock-market-wont-be-trading-today-2015-7

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Was able to give enough time to be ready for the start of trading last night, had late dinner but was reading on the news while the kids were still eating and since the day before AAPL was down by $6 and news came out during the day of further devaluation this became basis for continuing trend – I thought. But AAPL share was already in very low PE (13 level) and could prompt buying, so I was careful to size only half of the usual position and on alert to take profit / abort as market moved lower. The thing with AAPL is that with a PE as low as 13, it gets into some “you got to be kidding, this is way too cheap!!!” psychological level, it tends to attract buying interest and we’ve seen it snap back steadily. So I took my profit as it dived to $110 level, and even when I didn’t see it – to 109.63 level which I was monitoring as the low of the day. As it happens, 10 minutes into the trading day, I was done for the day!

However the stock didn’t stick around to the 109.6 level and was up quickly, I was watching if it is a level to put another bearish position, I was looking at the rebound from Low but with the overall market still overwhelmingly (200points) negative I didn’t think it was a low risk trade for me. I checked on AAPL news that are positive, there was none, all indices and other tech stocks were still onto fresh lows by 11am e.g. FB, BABA. AAPL was there inching up and up. I was monitoring for a good price point to ride a further move down.

My bearish trade was also not looking to capture big enough profit ie. 3R so I did not take it and I was already sleepy also.
Good evening all around, made decisions that I was comfortable with. The wonderful thing is that there are always opportunities, and it is an important matter to only take the Risk that you can tolerate.

So going into the new session, today’s news show that China’s central bank still lowered the yuan by another 1.1% BUT assures investors that it will intervene and not let the currency fall more than 10% and let the market have more influence of the value of the yuan. Which, in other times is “good news” because the market forces will do whatever it wants to do like it does to all other currencies, the bad news is, the currency looks like it is going to weaken further because of their slowing growth versus strengthening US economy and currency. So it looks like there’s going to a continuing trend for all stocks including AAPL, (which at early pre-market soared but declining steadily) which may mean people are clued with the continued devaluation that means less purchasing power for the Chinese consumers and that’s bad news for most, and AAPL in particular.

I wouldn’t be very bullish today.

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Apple has fallen fast and furious, I’m holding some too.  But is it time to sell?  What do we do?  People can’t even understand what’s happening. Bloomberg is busy explaining, here’s one article.

On one article posted, the head of Birinyi and Associates was quoted “On Apple (AAPL), Birinyi was at a loss to explain what has sent the stock down nearly 6% in the past two sessions.
“It’s a concern to me because I don’t know what’s going on,” he said. “I like to think it’s an overreaction, but I don’t know.” I tend to think the same thing, looking at the PE it is (even before last night’s fall – already in the undervalued level at 14, then with last nights steeper fall it was 13.68. I was actually expecting that it would snap back quickly because that fall was with the overall market (oil, dollar etc not about company news itself). Anyway, it is surely diverging big time just because it happen to tip to below its 200-day moving average. I also think it’s an over-reaction because fundamentally they have very sound finances (cash hoard of 194Billion as of April this year )

In any case, we have to accept some people think differently than us — I haven’t seen an analyst downgrade Apple after it reported its results. The growth concern is misplaced, just because there isn’t much details about the Apple Watch. One product. One! How about the many other products that is forming a web of related functions that make buying one Apple product pull you in to buy another product. What the analysts calls an “ecosystem” of products.

So last night I was looking at this situation — where to put money away from Apple. One of the easiest place to look for is where there is value, so checked up on the items on my watchlist and looked at the PEs of the stocks, nothing much to consider apart from GILD which I already mentioned in a recent post. FB, Netflix, BABA, Visa, MasterCard all run PEs in excess of 17 so — not touching those as investments.

I have to admit I have to cushion myself from further fall because the Support is at $110 level and we haven’t gotten there yet. It is looking oversold to me at this point, but I admit that further weakness is possible, and the stock goes ex-dividend tomorrow, and so there’s going to be some falls yet. I’ve written a “call option” on the stock… cool my heels with a long-dated option to get some cash from time expiry.

From an emotional standpoint, it is bothersome, but having that facility to write an option, get cushioned from further fall helps. If the stock goes back up, I have the ability buy it back, enjoy the price rise and roll up to another higher-priced option. If the price falls, I keep the money from the premium and write another option — considering risks of course … maybe I will wait for the hysteria to settle a bit and a confirmation rally from Support.

Will Power, R.W. Baird analyst, was on CNBCto weigh in on this recent development and discuss the slump in the stock in the last few days. “I think it’s a combination of things. Look, I mean from a technical standpoint…breaking the 200-day moving average is probably the latest catalyst. But I think there are some lingering questions on China and I guess the proof will be in the pudding there. I think we’re still optimistic on the opportunity there.” “But as I talk to investors, I think the biggest concern is the calendar Q4, the December quarter comp. I mean, look the company had an enormous iPhone shipment quarter in that quarter a year ago. I think their questions and concerns as to whether they can really beat that. We think they can and as a result combined with other factors, we like the stock here on this weakness. So we would be buyers, yes,” Power concluded.

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Guess what! Your bling wouldn’t have to cost you an arm and a leg to wear anymore, certainly not as much as US$1,700 per ounce level, which was pushed up by the days of war / terrorism / weak dollar. Gold gets in headlines now only to banner a lower price point, and the latest prediction  I saw was $800. (Read this article . Even then, I look forward to wearing 18K gold again (not the 9K being passed off as jewelry in stores!)

If you’re eyeing an alternative investment maybe you’d want to go from gold to GILD. GILD is a biotechnology and drugs company, which I have been watching for sometime. I was looking at the Earnings report of the previous quarters and they have been impressive, plus it was recently battered along with the market in the recent China rout and the valuation / PE stands at 12.5 level at below $111 … It was a “golden opportunity” — as the earnings was reported after the market close, beating the median by 43cents. So today, you’d know I’d be busy with this gilden opportunity.

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