High Heeled Traders

Over-Reaction

September 16, 2015

We’re nearly there — tomorrow, the Fed will raise the interest rates – or not! With the tension and talk about the interest rates, I’m ready to say, come on, do it already! It’s just .25 percent. And as with the Fed’s previous pronouncements they will raise the rates gently, and just because of the jobs already strong and inflation is moving to target. Nobody said anything about China. And if they want to move it to December, I’d rather have it now than to ruin Christmas.

Wish it’s that easy. Anyway, here’s all the talk about the negative effect of a rate rise. So Fed, if you’re reading this blog — listen to them! “Doom and Gloom with the Rate Rise”. Yes, I don’t think they should raise rates. The US will certainly be “out-of-place” with the rest of the markets either in recession or struggling.

However, one thing is for sure. These companies, investors and other “borrowers” are not babies. If I am them, they must know the rates will be raised – plenty of warning already with the “taper tantrum” 2 years ago. So how do you play along ? I like it low-risk with a 50% chance of profit, so I don’t position and speculate for this. This is because, like all investments – I might be wrong and most important for me is to trigger my stop and keep my losses small so I can still preserve my investments.

That’s the way of the wise, even with the US market rally last night, it has very thin volume.
I tell myself I have plenty of options, plenty of opportunities and if the risk is too great, I’m out of it!

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Predicting the Market

September 14, 2015

No need for crystal ball, we only need to look at China to see what’s going to happen to the world markets.

First, I’ve said China is finished. It’s never going to be the super power in this world and will likely drag many other countries. Economic reports released over the weekend added to yet another falling growth story. As of this writing, it’s down more than 4% and it’s not yet closing but the “rescue squad” might just step in and buy the blue chip stocks, but it just makes it clear to everybody, that only the government wants to buy up this market. Everybody else wants out. Ouch! And with all this uncertainty, there is talk to go to cash (see video below).

For the US Federal Reserve, I’ve talked about my fearless forecast in my post “Bear Months”. However, that’s not all there is to know about predicting the market or even making money out of your predictions so I invite you all to my upcoming workshop “Low-Risk High-Reward Investing Workshop”.

What You Will Learn

•The investing mindset you need to be successful
•The 3 things you need to ensure when you invest
•The 3 critical investing rules to remember
•Why investing / trading is a business
•How to avoid the loss trap
•How your personality impacts your investing
•Using a structured investing approach
•Developing your system or investing/trading rules
•The 10 parts of an Investing system
•Understanding position sizing
•How the investing world is inter-related
•Understanding the big picture and how to fit your strategy
•The 3 human inefficiencies that lead to losses
•Dr. Van Tharp’s 1-2-3 model
•How to translate information to profits
•Understanding how foreign funds and big institutions think
•Observations about market auctions
•The 3 market types
•Concepts that work
•The 3 money movers
•Prediction and expectation models
•Effective entry techniques
•Understanding support and resistance
•3 major risk areas and how to manage them
•Profit-taking exits
•Ramping up

This will be on
Sept 19, 2015
830am to 12nn
September 19, 2015 Saturday
Ortigas Library Conference Room / 2nd Floor Ortigas Building
Ortigas Avenue. Pasig City, (Parking at Sapphire Road in Ortigas Center)
Metro Manila, Philippines

This seminar is filling up fast so register now! Email me at
charmel@highheeledtraders.com and get 50% off the regular rate for readers of my blog!
Regular rate Php 3000, 50% discount is Php 1,500

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China’s stocks plunges again! Europe and US will not be immune. With the crazy market we’ve been having, the “Low-Risk High-Reward Investing” workshop gives you timely information for profitable investing in the current conditions of the Philippines and global financial market. After years of a bull run, the market has changed, requiring more adept investing skills. For me, technical analysis, fundamental analysis, trial and error in the market, are not enough and needlessly make things complicated and painful even. In this workshop, you will finally learn exactly how to invest with low-risk and high reward strategies that involve entry techniques, profit-taking exits and manage risks of this volatile market. As an added bonus, this workshop will help you find the undervalued but growing companies so you can sleep at night, knowing your investments are safe and on-track to meet buy that car, that house or retirement. No more excuses, just get to your goals!

What You Will Learn

•The investing mindset you need to be successful
•The 3 things you need to ensure when you invest
•The 3 critical investing rules to remember
•Why investing / trading is a business
•How to avoid the loss trap
•How your personality impacts your investing
•Using a structured investing approach
•Developing your system or investing/trading rules
•The 10 parts of an Investing system
•Understanding position sizing
•How the investing world is inter-related
•Understanding the big picture and how to fit your strategy
•The 3 human inefficiencies that lead to losses
•Dr. Van Tharp’s 1-2-3 model
•How to translate information to profits
•Understanding how foreign funds and big institutions think
•Observations about market auctions
•The 3 market types
•Concepts that work
•The 3 money movers
•Prediction and expectation models
•Effective entry techniques
•Understanding support and resistance
•3 major risk areas and how to manage them
•Profit-taking exits
•Ramping up

This will be on
Sept 19, 2015
830am to 12nn
September 19, 2015 Saturday
Ortigas Library Conference Room / 2nd Floor Ortigas Building
Ortigas Avenue. Pasig City, (Parking at Sapphire Road in Ortigas Center)
Metro Manila, Philippines

This seminar is filling up fast so register now! Email me at
charmel@highheeledtraders.com and get 50% off the regular rate for readers of my blog!
Regular rate Php 3000, 50% discount is Php 1,500

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That Was Last Week

September 9, 2015

Just like magic, a few days back from holiday and it seems the world is a different place from last week! I am not one to spoil a party so I say take the plunge and ride the bullish sentiment. Yesterday’s bad China trade data – a bad export figure (down 6%) and even worse import (down 14%) is indicating sloooowwwwinnng growth but it seems, with China’s government ready to do the heavy lifting, the bad news is good news. Everyone can heave a sigh of relief.

Now, just remember, there is that US Federal Reserve Interest-rate setting meeting next week, so enjoy the positive sentiment but beware.

This is how it looked at the previous US session, fun opening and the first few minutes reached 2-3% highs for a lot of stocks — pushing the Dow 300_+ points and NASDAQ over 115 points, but, the rally started to give way to profit-taking so mid-day there were a lot of stocks back to where they started. However, there is more positive than negative sentiment so another upswing was seen. Not a bad day for volatility-based system and I myself had a hedged position, took profit (on a covered call option becoming cheaper) and wrote another option with room for upside.

Today there is probably no earth-shaking report from China, so sunny skies are forecasted my friends, but tomorrow there is that CPI — inflation information — and hopefully it is not all that bad. But if it is bad, it’s probably good (more stimulus).

However, like what I keep repeating here last week’s volatility was all about concern on — valuation, valuation, valuation. If that gets too high again, unsupported by earnings (or telltale growth figures like retail sales, factory output, jobs) that’s another reason to sell.

If you want the specific, timely and actionable ideas to be profitable in wild swings in the investment environment (you know, the volatility). Workshop and webinars coming!
Low-Risk High-Reward Investing Workshop
Sept 19, 830am
2F Conference Room, Ortigas Building
Ortigas Ave, Pasig City Manila

Sign up at charmel@highheeledtraders.com

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Is It Over?

September 7, 2015

The holidays, is over, for sure. But the selling, ahhhh not so sure. And because of all the uncertainty, more selling is happening. When will this be over ?!

The other “quotable quote” that “it’s over” is from the chair of People Bank of China, that the “volatility” is ending. The investors, fresh from their holiday, initially gave their agreement, but seemed to change their mind in the afternoon, and lo and behold there is no gov’t buying like what happened like clockwork last week! Uh oh, I mean if this keeps happening (Chinese govt gives reassurances but the public doesn’t believe) — the market will continue to slide.

BUT this is not the time to be “hard headed” and rely on predictions. (Never a good idea!) All we can really say is the market is going to do what it wants to do. So we all got to be watchful and follow the system that makes money from this volatility. And, this is why I am endeavouring to reach out to as many people as possible to share specific, timely and actionable ideas to be profitable in wild swings in the investment environment (you know, the volatility). Workshop and webinars coming!
Low-Risk High-Reward Investing Workshop
Sept 19, 830am
2F Conference Room, Ortigas Building
Ortigas Ave, Pasig City Manila
and there will be webinars coming soon!

On a side note, I mentioned last week that Germany had a rosy manufacturing report, now it has reported that Industrial production has rebounded strongly. The report indicates “High overseas demand filled the order books.” That just means to me, it’s all over for China. Their export markets are overtaken by strong competition from all-of-a-sudden more affordable products Made in Germany. Wow, we’re staring at a new chapter here friends. Keep watching.

http://www.bloomberg.com/news/articles/2015-09-07/charting-the-markets-china-respite-over
http://www.bloomberg.com/news/articles/2015-09-07/china-revises-2014-gdp-growth-to-7-3-from-7-4–ie99p812
http://www.bloomberg.com/news/articles/2015-09-06/china-stock-market-correction-almost-done-says-pboc-governor
http://www.bloomberg.com/news/articles/2015-09-07/german-industrial-production-rebounds-in-sign-of-solid-recovery

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Playing in the Rain

September 6, 2015

Plan was to go swim and do some fishing. Dropped by a local tourist attraction with waterfalls and learned the pool is closed. Went to go fishing and have lunch. It was a warm day with gentle breeze and it was a good time to rest and appreciate not having to think about the market. The kids caught two fish and we had lunch of grilled fish, meat and noodles, after sometime, it was getting hot and the kids are not getting any fish so we decided to head for a waterfalls nearby. It was our first outing to bathe in the waterfalls and it was starting to rain. Happily, everyone was ready for adventure and all in good health. We had a great time and a great experience.

My reflection is that it’s not always sunshine, rain has to come. But you don’t have to stop living life. You can still play when it rains. But you have to be prepared, in the right frame of mind and in good health. Same goes for trading, the bear market requires skill and preparedness. Like being able to recognize what are the flashpoints for a bear market. What are the signals that create pause in a bull market – I’ve been talking about valuation, interest rates and the players in the market. I’ve been talking about the US Fed interest rate setting agenda here for a while. Someone told me that “you can not time the market”, while there is no set appointment — there are indicators as well as data that these market players look at. If you are able to keep track of those economic reports as well as the market movers, you would know. Heck, to make it easy, I post it in my blog! For those of you who simply don’t expect “tips” and want to know everything there is to know about investing, I am glad to oblige with my series of workshops and webinars.

In our coming “Low-Risk High-Reward Investing Workshop and Webinar series”, we give you actionable ideas to profit in this volatility or preserve your capital, give you proven system and building blocks for a system that you can build for yourself as we believe,as Dr Van Tharp teaches “invest as it fits you.” For you whose life goals and family’s future are important, it is important to know how the market works so you know how to steer your investments. You have to know the rules of the market so that you can learn to play with the bears.

Learn all about it in my upcoming:
Low-Risk High-Reward Investing Workshop
830am Ortigas Library Conference Room
Ortigas Bldg, Ortigas Ave. Pasig City Manila Philippines

In this workshop I’d be happy to use examples of stocks that our attendees want to discuss.
So register and talk to us about what you want discussed.
Contact charmel@highheeledtraders.com
Happy Sunday!

Daranak Falls

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Draghing a Little Tenderness

September 4, 2015

Had a good sleep last night. Everything was feeling positive since there was no “red market” day over in China, but before the market opened in the US, Europe was awake and had the European Central Bank Chair Mario Draghi’s declaring a willingness to expand its QE program because of the global slowdown, and admitted, that there is going to be “negative inflation.” Found it really weird, why didn’t he just say there’s going to be – DEFLATION. I guess he’s trying a little tenderness – saying the word will spook the hell out of everybody.

So I was there watching — not feeling as confident even with the major indices up over 100 points – market signals were all over the place — first you see that confidence in the pre-market price levels jumped from the day before, and start to go down before the opening, after the ECB announces the expanded QE. The indices, all those individual stocks I like to watch like AAPL, FB, GILD were up and down so much (with my own measure of volatility), I decided, the market is hard to get any solid footing and low-risk enough, so, I went to bed.

So what has been happening ? You can say there is some confusion, because “stimulus’ or expansion is always a good thing, on the other hand, the question here is WHY we are stimulating the economy, again, and WHY the first one hasn’t succeeded. They’ve been making mistakes about the growth figures before, who can be sure they are not making any more (mistakes). (Just want to make sure I am very clear on this hahaha).

Well, the governments don’t like to paint a bad picture, it’s their job. But it’s our job to protect our investments so, I hope you get the knowledge I share in here and look after your investments.

Nevertheless, there are opportunities for the people in the know.
So with all this volatility, it is all the more important to know how to protect those profits, find the opportunities.
Understand the market conditions and the moves happening. I discuss actionable and proven ideas in my
Low-Risk High-Reward Investing Workshop / Webinar series.
Sept 19, 830am
2/F Ortigas Building Conference Room
Ortigas Avenue, Pasig City Metro Manila
Philippines.

The webinar version will be available to accommodate my audience in different parts of the world.
Will announce the schedule next week!
Enjoy!

—————————
http://www.bloomberg.com/news/articles/2015-09-04/ubs-cuts-hong-kong-stock-target-25-as-black-sky-becomes-reality

http://www.bloomberg.com/news/articles/2015-09-02/these-are-a-few-of-the-stock-charts-that-spook-louise-yamada

http://www.bloomberg.com/news/articles/2015-09-03/u-s-stock-index-futures-climb-to-track-european-shares-higher

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Bear Months

September 3, 2015

The IMF finally got around to what I’ve been saying for a while, China is weakening and sure will drag the global economy. Canada just had 2 quarters of contraction – which technically means they are in Recession. Australia registered a teeny-tiny increase in GDP a .2% increase. Brazil and Russia have been sad stories for a while due to the commodities (iron ore and oil) falling off a cliff since last year. IMF report here.

China is on holiday today and bargain hunters have started to load up on the oversold stocks yesterday, and can potentially continue till there is another reason to sell. Like, next week when China opens again, nobody knows for sure when, so like what I’ve been saying to people keep tight watch of your holdings or be prepared with hedging strategy. I had a position for AAPL falling last Monday and it was hugely profitable Tuesday, my mistake is I didn’t wake up for the close to take the profit so by Wednesday, I had to give up some profit since it went back up in anticipation of the China holiday “buying spree” by the Chinese govt agency. Still, it gives me confidence that I am “one” with the market moves. Yesterday was a huge move once again, can you believe how volatile the market is, it’s still a few days away from the US Fed meeting, so hmmm, get used to it.

Back to the US Fed rate rise, my fearless forecast is that they won’t raise rates – yet. A lot of rock star investors / traders are saying the Fed can’t hike in this kind of market uncertainty, but I know for sure that once they raise rates, US dollar will rise, their neighbour Canada – already in recession will grow weaker (US exports is at 19% to Canada accdg to the CIA Factbook) and that can’t be good for BOTH of them. So,,,, those job gains which they said is the primary basis for their rate rise is going to lose its importance. The wage gains can hardly be felt (I’m missing the Big Mac Index). Besides, with the number of “undocumented migrants” they have (who presumably are not in the “official” list because they don’t claim for jobless benefits anyway), the REAL unemployment is still high at 23%. (Where did I get that figure – google it)

So anyway, with the temporary respite from the interest rate increase — these “ber” months the market is going to be pressured by the falling commodities, weakening economies (because, answer this – where is the growth coming from?), currency wars and watch for it, China. The valuation remains stretched and the natural forces of the market will be unstoppable.

I discussed all this in detail in the webinar last week “Is it time to buy”. Yesterday I had a repeat scheduled of at 8pm – which is what I’ve scheduled in my Facebook posts but there was a confusion because in the webinar platform I scheduled it for Sept 1, so sorry all along I thought I had it for Wednesday, but anyway, I will be sending out the link to the video recording to all who registered. Apologies for any inconvenience caused.

So with all this volatility, it is all the more important to know how to protect those profits, find the opportunities.
Understand the market conditions and the moves happening. I discuss actionable and proven ideas in my
Low-Risk High-Reward Investing Workshop / Webinar series.
Sept 19, 830am
2/F Ortigas Building Conference Room
Ortigas Avenue, Pasig City Metro Manila
Philippines.

The webinar version will be available to accommodate my audience in different parts of the world.
I will announce the schedule next week.
Meantime, enjoy the China restday paydays. Here’s Septembear.

http://www.bloomberg.com/news/articles/2015-09-02/china-stock-futures-drop-before-holiday-on-state-support-concern

http://www.cnbc.com/2015/09/02/this-is-a-very-real-bear-market-gartman.html

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UPDATE : China manufacturing contracts. Germany unemployment down. You see here that Germany benefitting from “cheaper goods” from weak euro and seriously encroaching on China’s export markets.

I don’t want to immediately write-off China, but here’s the thing, other countries with weak currencies (euro and yen) and better quality goods are so competitive AND they are just not doing the right thing at all when it comes to what they should be doing for their long-term economic growth and prosperity. I thought before that with the kind of financial muscle they have, like owning the most amount of US Treasuries at 1.4 Trillion dollars that they can just go from strength to strength. But it is easy to make mistakes — like selling assets so they can spend the money on things that go down in value. It’s been widely reported that they are supporting the already expensive stockmarket. Only for the natural consequences of the market to pull it down. There are reports but let’s say they spent $20 Billion for stockmarket rescue last week alone, that’s definitely not going to last very long. And a question just in time for this week’s military parade — how will those fancy guns and firepower help the environmental, social and human development needed for growth?

United States — ahh the economy is the world’s largest and showing promise at growth so it still has a strong pull as far making money is concerned. However, rate cut looming poses risk in investments (USD strengthening) plus of course many of the biggest companies has exposure to slow-growth countries like Japan and EU, China are causes for concern. But then again, there is always attraction for companies with strong domestic focus and dividend plays.

Bloomberg article by Mr Pesek just confirmed what I said / wrote about as the next best investment destination – Philippines and accdg to him, South Korea are the big winners from the China slowdown. No more BRICS. Coin a new acronym, quick!
How about SoKorPhilUS? PhilSoKUS? SKUP?

I posted a video that the Philippines can even surpass China’s growth. I was in the Invest ASEAN event organized by Maybank Kim Eng (Malaysian bank now expanding aggressively in the Philippines — see what I mean?!) Check it here.

Now just a quick list why Philippines is the best investment destination post-China :
(Facts and figures from CIA World Factbook)
Philippines https://www.cia.gov/library/publications/resources/the-world-factbook/geos/rp.html
South Korea https://www.cia.gov/library/publications/resources/the-world-factbook/geos/ks.html

1. More income earning potential of the unstoppable USD –
a) Tourism – value-for-money destination featuring natural wonders (Perfect cone volcano), biodiversity (No.1 in the world), history and art from centuries of Spanish rule, American and Japanese occupations, fresh food, vibrant city life and rural fiestas and idyllic islands and beaches!

English-widely spoken attracting travellers from US / Western countries 4-5 Million migrants that recurringly visit their families and most of them area also bringing their foreigner friends.

Environmentally — Philippines also has a more welcoming environment, enjoying tropical / warm weather year-round.

c) Remittances – the overseas workers and migrants (10Million worldwide and high concentration in US / OECD countries)
Services / Outsourcing industry – the value proposition and talent pool is even attracting more and more clients. Major global banks like Citibank, JP Morgan has call centers and back offices in Manila.

2. Geopolitics –

a) Philippines – part of ASEAN block with a market of 600Million people, important strategic partner of the US Military vs China
South Korea – got a pesky neighbour with nuclear arms

Maybe even as a blessing in disguise, Philippines has a tepid relationship (resulting to low level of investments from China) because of territorial disputes. China, thousands of miles away is claiming territories within the 200 nautical miles exclusive economic zone as provided by international agreements.
http://www.un.org/depts/los/convention_agreements/texts/unclos/part5.htm

3. Demographics –

Philippines is 100M, South Korea is 50M – Philippines has double the size of the population translating to bigger market / workforce also.

Philippines also has a younger more energetic workforce with median age 23.5 vs Korea’s 40.2 and rapidly aging population with .14% growth rate

Education – American-style education has many Filipino professionals reaping relatively easy skill accreditation even with countries with the most stringent requirements like Engineers for many Middle East countries, Health professionals (Doctors, Nurses, Medical Technologists), Information Technology jobs (programmers) in the US, UK, Australia, Canada. The Philippines are also getting more and more business processing / knowledge processing jobs, many foreigners even US-based children of Filipino migrants there, have been coming to the Philippines to get their professional education here because it is inexpensive and high-quality.

For decades, South Koreans have been coming to the Philippines to study English. More Koreans are also living and conducting business in the Philippines.

Migration – while many Filipinos migrate out to work and live abroad, Filipinos continually come back to their motherland. Many have also inter-married to other nationals most of whom prefer living / retiring in the Philippines. Cebu, Dumaguete, Baguio. Manila and many rural areas have multi-racial families providing a dynamic linkage (and importantly the USD remittances ) to the Philippines from other OECD economies.

South Korea registers 0 migrants per 1000 population.

——————–

The Philippines’ economy, as part of the global financial world is not selloff proof, but its economy is not in danger of being dragged down by commodity exports like what’s happening to Canada, OPEC countries, Brazil and Australia. Despite having an abundance of natural resources due to its geographical location / Pacific Ring of Fire — the Philippines is not a big commodity producer that drags down the slowing demand of gold / copper / oil.

As an end note, with the election year coming, there will be further “stimulus” from the government. It doesn’t matter who gets elected. Most of the politicians are corrupt. It’s not the government but the people, resilient and self-reliant who make the Philippine economy go from strength to strength..

Mr. Pesek’s article
http://www.bloombergview.com/articles/2015-08-30/two-big-winners-from-china-s-big-slowdown

A sneak peek about the Philippines
2015 Tourism campaign

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Weekends are usually R and R for me, but it’s been raining outside and I just have to review the events this week! I’ve been talking about volatility and telling my trading community some of the things to expect. Here’s a very interesting discussion by Bank of
America head of global rates and currency research backing up my ideas on the what lies ahead … more volatility, China currency devaluation, deflation and possibly Fed non-action. Pay attention to him talking about “Risk parity” – I had to play it a couple of times to understand it hahaha. So go ahead, grab some chocolate, I had the bittersweet drink — and read on.

Chinese government selling US Treasuries to raise funds to support their own currency (yuan / renminbi) is happening, so when stocks are falling, US Treasuries are supposed to go up, BUT the biggest holder of the US Treasuries are selling, driving the prices down too. And so, “risk parity investors” take RISK OFF on everything.

This strategy of selling US Treasuries, while the Chinese holds US$1.48 Trillion in value … but using 40 Billion a month to “invest” in the stockmarket is not going to last long, and presumably, they won’t want to use it all on this stock intervention anyway, given that it was cited that it does not have a big effect on the Chinese economy overall.

http://www.bloomberg.com/news/articles/2015-08-28/bofaml-s-woo-explains-how-china-was-behind-one-of-this-week-s-most-extraordinary-market-developments

http://www.zerohedge.com/news/2015-08-27/what-chinas-treasury-liquidation-means-1-trillion-qe-reverse

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