Now we’re looking at a brave new world Post-QE aren’t we.  If that 2-day rally says anything, the world is never going to be the same again.  Kind of.  The stockmarkets of the emerging markets will get less attention given the strengthening of the US market, so here I am letting you know that I am going to be trading in the US market now, in addition to the Aussie and Philippine markets.  I will trade majority of my income strategies in the US market though because of the strengthening (and consequently weakening, Australian dollar and Philippine pesos).  That’s interconnectedness of the financial markets for you. That’s the important update to my business plan and so that entails finding new stocks (the easiest part – just check the most efficient sector),  re-scheduling my trading times (different time zone), frequency will be altered – because my “mommy time” is in daytime, I can be more active at night, plus I get better flexibility because of the weekend (extra Monday off, and be full-on on Fridays).

We’re all set for the New Year,,,

So how about some gift-giving this holiday!  I read this article of some holiday gift ideas for the trader in your life, and yes, it’s you.  Give yourself some loving with the items listed here.   This is clearly a “Gifts for Him” list, though the chair described clearly caught my attention. Just let me add some of my favorites.

— L’Occitane Verbena EDT. Fresh,citrusy… stress-busting scent in a second!
— Lindt Dark Chocolate with Hazelnuts (healthier than the milk chocolate, but I won’t complain with any variant!)
— Flowers – I’m enamored with arrangements with a variety of flowers and color, birds of paradise, orchids, roses, tulips. I’d love fresh bouquets in my office all the time 🙂
— Fruits — baskets of fruit in season would be lovely as well. I’m feeling lucky though that “open borders” are letting fruits in from around the world — I’m in mango heaven right now!
— Vitamin E oil – very important for healthy skin, I use it “everywhere” 🙂 I noticed a brand that I recently discovered that seem to have erased my wrinkles! I wish I took a “before” picture but now I can’t, because they are gone ! And I’ve just been using it for a week.
— Rosehip oil – for the face, I put it on at night after cleaning and feels so fresh. I used to use this prior to the Vitamin E oil I mentioned above – can’t find my usual supply right now but I still wish I can get my hands on it.
— Shoes — hehehe thought I would forget? I just bought a pair yesterday – something versatile I can wear all day, while driving – closed shoes, very comfortable but can also go shopping wearing a dress with it because it has a 2 inch wedge heel. Glad I was patient, I’ve seen 2 other brands of same wedge heel, but the comfort and look of this one is perfect for my daytime adventures with the kids.
(Kind of like trading eh…. patience

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Tapering, Tapering, Tapering is all over the news. Tomorrow we will know for sure if there’s going to be tapering going on.

This is could be a phenomenal event, or not!  If you look back in May, when all this taper talk started, people have mostly sold the market off their positions. So one wonders if there’s any action left to do but buy again!  OK wait, not tomorrow… the US Federal Reserve will come out with the decision to taper, tomorrow, but you can do several trades today.

Here’s what I am planning to do with my existing holdings.

I have a covered call position on the stock BHP.  It is in credit (meaning I profited when the market went down),  since the US market all declined today, there is a good chance it will also go down, so I am going to look to take profit based on my system.

There is a chance the tapering could happen (arguments later!) so I may keep the covered call.  The risk is that the prices may rise tomorrow and my profits will be limited.  However, it is holiday season so there is a seasonal tendency for prices to decline when positions are closed for holiday.   This is my belief, so I feel that if the price runs away from me, it will go back down close to my entry price. So that’s what I will be monitoring.

On the other hand, when the tapering does not happen, the upside potential is huge. Meaning, we can all have a  Merry Christmas and Santa will be early!  I am going to buy an out-of-the-money call option, but I admit, the profit-taking will have to be done quickly, as mentioned due to positions being winded down for the holidays.  Options will be expiring tomorrow (at the Aussie market)  so the options could be cheap, meaning it is a low-risk, high-reward opportunity.

Now, why would the US Fed NOT taper…. let me count the ways…

1.  They said they are data-dependent and they’ve long mentioned inflation target of 2% and unemployment at 6.5%.  The economy might be getting stronger BUT the numbers they are looking at are nowhere near the target.  That is crystal clear to me.

2. Head of US Federal Reserve is retiring.  The replacement will be announced this week — Janet Yellen, the nominated Chair is an advocate of QE ( read: no tapering yet) and in her Senate confirmation hearing, she said the economy is performing FAR from it’s best, so I see no tapering there, at least not tomorrow.

3. Christmas season, it’s going to dampen the holidays, i.e. the consumption and spending that goes with it, that is 70% of the economy, so yes, the US Fed is mandated to support the economy and  are not going to want to be on the Naughty List.

Alright, that’s all.  The sun comes out, tomorrow!

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Technically, end-of-year is still far off, I can count 2o to go before the big bangs ushering the new year.  But,  traders are always thinking ahead, so my trade for the year is near at end.  I have 2 trades left to do, one to sell and one to buy, in that order!   🙂 I am especially keen to buy during the Christmas break.  Yes, when everyone else is on vacation. This is one of the best times to really get into the market with limited risk to the downside.  Why?  There is a seasonal tendency to close positions and herein lies the opportunity.

Buy low 🙂

I plan on doing either end of next week, the Friday.  Or maybe even on the Thursday since it’s the expiration date for stocks (in the ASX).  There’s going to be some volatility no doubt as traders leave positions and take a vacation, while others could be positioning for next year.  Anyway, if you plan to do that, my little tip is to look at your current timeframe, e.g. you are a swing trader holding positions for a week or so, look at the next lower time frame e.g, per hour and check the Support, if you are near these levels, those would be low-risk high-reward opportunities.

Now, if you’re the type to REALLY go bargain-hunting, I read this article about bargainistas’s delights i.e.  contrarian investor holdings.  http://www.bloomberg.com/news/2013-12-10/the-2014-contrarian-investment-tour-from-rupees-to-copper.html

But I caution you, patience is key, along with due diligence.

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Major US indices DOW and S & P are going higher and higher, and while I already wrote about this happening in these December months on account of seasonal tendencies, I do think sometimes about the reasons behind this. Of course, with years in the market, I have learned (earned) not to question, or predict … and I know it could be hard (some may even feel guilty!) since we are in a business where research and data abounds. But again, this business is not about being right, remember? It’s the business of going with the flow, if you’re profitable, hang and when it’s not profitable or profit is shrinking, well, get out! What I want to share in this season of Thanksgiving is this aspect of the business that requires “enjoyment”.

So again, when the moves are in your favor, we should learn to be thankful that it is going in our favor and NOT worry, NOT question, and absolutely no taking profits early! If you need help in this area, my book, webinars and workshops are all designed help you develop your business and become profitable.

There are of course people whose job is to provide advice based on valuation who would be “baffled” by the continued strength of the market. As if, it’s the only basis of the market moving (uh, there’s more!). But as far as valuations go, the following video provides hints.

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December is just around the corner the DOW and S & P Indices reaching record highs are indicating that Santa Claus is early!

I’ve been reading a couple of articles sniffing out the sentiment in the market, and so far I can see no immediate danger to the uptrend in stocks. The usual suspects are asleep it seems and wish they won’t wake up soon!
1) Europe debt issues
2) US government policy changes (well this one will fire up early next year)
3) Geopolitics

I admit, my bullish reading would be limited to most US companies, blue chips, so for holders of emerging market stocks (like Philippines, Indonesian, Thailand which were the darlings early this year), you better be ready for more market swings. If you want any clues to this “money movements”, this article gives an overview of what’s happening among investors / fund managers as they review the performance of the the asset classes.

There is a very important lesson in it and I hope you are able to put it to mind. That, there are many places to put money on, and each attracts money in different ways. Notice how gold was so strong at the onset of the financial crisis however it has fallen off more than 20% its highs at the talk of tapering and interest rate rises.

For me my new short-term trade on my retirement account is in a bank stock (ANZ) that has reached a high of $34 but has traded lower last week to 31.50 level, my goal is to make 3times what I risked till the end of the year. I have a fairly wide Initial Risk or 1R of 60c.
Last Friday the stock moved 20c higher and with the Monday trade following a good week at Wall Street, I am expecting this stock to roar.

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Sexy title huh! I only do this rarely but I thought it is appropriate, since there is going to be a woman at the top job in the US Fed. How lovely. She is Janet Yellen and she has made it known loud and clear that there is going to be “highly accommodative” monetary policy so that US will have a robust recovery.

OK, I’ve been saying that all along. But still, some people have very creative minds thinking that some good news at the economic numbers is going to cause tapering (causing market falls and inducing fear) … soon, like this December! Now, they already said before that they are looking at 2 things : jobs and inflation. With key measures of unemployment (people with no jobs) at 6.5% and inflation at 2% territory. Jobs generated last month was 204,000. Now try doing this : 204,000 divided by 50 states you get 4080 jobs per state. That’s not a lot! That’s just like how many people are in a shopping mall at one time. Strong recovery is what we want and that’s just not happening yet.

So thank you, Ms. Yellen for clearing that up! Now, it would be a no-brainer for trading positions to be on the bullish side, there is going to be usual ups and downs, but I am projecting the volatility would be low and probably more on the profit-taking side from time to time. I am adding more positions in banking sector that performs strongly in the current markets – tied to housing, consumer, energy and even mining (or the resources sector). We are seeing gold being supported with the “tapering” not happening anytime soon. And it also follows that money flows to growing economies, so emerging economies / stock markets that saw outflows will get foreign inflows due to this.

My preferred strategy is Call Bull Spread and even some covered calls at Resistance at 1 day time frame. My current schedule does not allow me to be at the market at the opening times but rather near closing times for price action ripe for reversal. As always, be guided with your business plan, and system.

Roar on!

SO LET’S ROAR!

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Catchy title eh! I’ve lost count myself of how many articles I’ve read with the above title, and of course believe them for a while, only to find that soon after, things don’t turn out as rosy. But anyway, to go back to my title, and my current trade, I last told you about the mega-position I have taken with BHP, entering at 36.18,,, a few weeks ago and I was saying I am going to make my regular income with covered call strategy. Now, you must know that with covered call options, if the price of the stock moves against you, you are saying goodbye to more profits. And who wants that? So you got to trade off a “sure win” with potentially “gigantic win”. Now, BHP is at this point, it had gone up as $38.27 and guess what, I have, made several attempts to “demo” a covered call strategy but got out quickly, yeah, so quick I didn’t have time to tell you all about it! Life is like that, you have to take your chances at the best time possible. That happened last week, what I have been finding with BHP is that since it is a widely-held stock, once that it had dipped there are other buyers snapping it up. It had only fallen very small points over the “the triple digit” fall we had last week at the DOW due to tapering fears by the US Fed. But, like what I said in my title, there are “the best times to invest”, and it appears, it is now. You see, the next day, the good news that was being “feared” to add to the tapering scenario produced a stellar comeback from the US market.

Anyway, in the years that I’ve observed in the market, there is a trend upwards toward the end of the year. You may want to call it the “Santa Claus” rally (a bit early, but hey this morning I heard on the radio that it is only 44 days to Christmas!). And there is now way, the government, yes, the US Fed, (scheduled to hold another policy meeting around Dec 18) is going to act like the Grinch and ruin Christmas for investors.

OK, so that’s one “best time to invest”.

The second is, take a guess, right after Christmas season, when January rolls in.
Of course there will be the ebb and flow of the markets, there is going to be some volatility but not expecting a wild ride / sideways market. This is because January is when people’s “New Year’s Resolutions” are the strongest (haha surprised?), when there is a tendency to buy. From a more market-oriented view, this is another “new quarter” and “annual” reporting season and there is anticipation rally more often than not in the many stocks I have observed.

So shall we move on to February as one of the best times to invest? Well maybe, it all depends, on whether your company stock gives out their annual reports and dividend announcements at this time, at which case, investors are holding on to their stock to receive their dividends pushing up the price.

OK so that’s three. But don’t wait for me to tell you more. I did say, one of the best times is now!
So go ahead and study what you will have to invest on.

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It’s late at night and so sleepy, I thought I’d take a break from doing my taxes and looking for something to crack me up. Checking on Bloomberg seems to be a habit of mine and I, of course jumped in to the videos with Warren Buffett (quick! Google him if you don’t know who he is!). Lately I’ve been thinking if I should jump in on bank stocks. I’ve been watching them for years and actually, I did try trading them early on but my self-awareness wasn’t “aware” yet HAHAHA so I can’t share any worthwhile lesson about it. But, here we got Warren Buffett, Carlos Slim who are in the banking business so it must be a good business to get into — despite the debt issues still lurking in the shadows. I guess like any business, managing the risk of debt is always important. Anyway, will come back to my investigation of bank stocks. I do believe there is a good chance of uptrend / strength in this sector considering the bleeding period they had gone through, and would be well-positioned for recovery in local and even global economy. (Whenever that is!)

Now just to update you about my trade, I was able to enter BHP at 36.20 and the stock is now up at 37.50. This is past the 1month Resistance of 37.44, so while I am so tempted to take profit at the highs intraday (it went as much as 37.80 or about 30c profit). I feel there is significant upside to the position, and once the Resistance is pierced supported by investors, I can let my profit run. Still just observing Initial Risk (Stop) at 30c, when I can implement some risk management strategies like the covered call option.

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Today I waded back into the market with a buy order on BHP. Employing my position sizing strategy, I aim to deploy cash (Buying the shares) and receiving a sure income (premium received with options strategies). BHP reports on its quarterly production, from my observation, this is a widely held stock that could experience “anticipated moves” and bargain-hunting should there be “early investors” cashing in. I would have liked a lower price, but I was busy attending to my kids activities as the price fell during the US budget dramas, now I have gotten my preparations in order and felt with the US stimulus programs in place there is a strong possibility of share price moving up, so I entered today. It is a “prediction” that I am prepared to be wrong about, no reason to panic, we wait for STOP levels that are in place (34.50 level which is a 1 week low.

BIITS
So is the “stimulus” going to keep coming. Many people think so, there is just little proof to say that US recovery is well on its way. I guess it’s like an adolescent girl requiring strict supervision.
I’ve been reading though that the way people have invested in emerging markets (EMs) are changing. No more BRICS, and investors are warned to be bit by BIITS (Brazil, India, Indonesia, Turkey, South Africa). Check out these many-splendored-things in this article. Of the things mentioned that affect the attractiveness of these markets, China is a big driver. So like in my previous article, keep watching them over yonder. The world indeed has changed.

Meantime, get some ideas on where to invest $1000 from Dr. Nouriel Roubini who predicted the global financial crisis (GFC).

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OK, so the dramas of the US shutdown (and default scenario) is past. Just don’t forget that they “merely” extended the borrowing, I think there is 4 months timeline the same issue might come up again. So I’d expect some V-shape week charts. Meaning, fear-driven sell off at the hint of strong disagreement, but that doesn’t mean the world has come to an end. Bargain-hunters would swoop in and the rest of the market could rally just before a final agreement is hammered out. After the agreement, there was a “sell on the news” phenomenon but only a slight dip within the day.

Meanwhile, there is life outside the US :). I’m trading BHP (biggest miner in the world) so I had to pay attention to the news coming out of China. Here are some videos with details of the next meeting for policy direction.

My trade here will be for BHP, the biggest miner in the world, I am expecting a volatile uptrend with this stock. Will be employing ratio and perhaps calendar spreading strategies which I will discuss in the next blog posts.
Meantime, enjoy one of my favorite songs “Georgia On My Mind”

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