Thursday, December 31, 2009

Review on 2009

As the year 2009 comes to a close, it's time to review my progress and achievements for the year 2009.

1) Set up ExamWorld for students.
2) Achieved my first $100k in equities in October.
3) Built up my tuition income quite substantially, both from private tuition and from teaching at a tuition centre.
4) Set up Wealth Buch.

My total realised gains (dividends, realised gains, realised losses) from the stock market is around $9061.33 in the whole of 2009. My investment capital has grown from around $60k at the start of the year till $112k at the end of 2009.

On the relation side, I'm planning with my girlfriend to apply for the Hougang BTO flats in Jan 2010. If succeed, marriage shall be in the works by 2013.

The year 2009 has ended positively, both in my life and in the market. Let's wish for another boomz year in the year 2010. :)

Happy New Year to everyone!

Wednesday, December 30, 2009

Hougang Build-To-Order Flats

Considering my first foray into property, although it's amidst the property fever.

HDB will be releasing information on build to order for Hougang in Jan 2010. Hopefully, 95% will be for first timers applicants again.

BTO for first timers are usually cheaper than resale prices... A look at the resale price index:

The previous peak occurred just before the 1998 Asian Economic Crisis. The current index is very near the previous peak, so it's giving me a dilemma if I should go for the purchase.

I did take note that the resale price index hike was probably due to buyers paying cash over valuation. I'm not very sure about BTO prices yet, but I'm with the impression that it is at a discount to valuation.

The details will be out on 5th Jan 2010, Tuesday.

As Mark Twain said, buy land, they are not making any more. In Singapore terms, buying land is currently out of my reach... But buying a living space the size of a pigeon hole is still within my means... Property plays usually entails leverage and much longer time horizon... It should be treated differently from stocks...

Thursday, December 24, 2009

Starhill Global Purchase

I managed to enter 10 lots of Starhill at the 200 day moving average at 51 cents. We could consider it as a potential reverse head and shoulders or triple bottom formation technically.

The fundamentals would be as researched earlier:
Starhill REIT

With this purchase, my monthly dividends would increase by about ~$31, assuming no change in DPU (although I expect an increase due to new property purchases).

My total average monthly dividends from my dividend basket is now $490, excluding those from the trading basket.

Merry Christmas!

STI Updates

I'm still rather confused which wave count is the one. Below are my preferred and alternate counts:

Preferred count:

In this count, we are still in intermediate wave A of Primary B. It has been 1o months so far, including the 5th wave.

My main concern is, if there's still a intermediate wave C of same time frame coming, then it would be at least another 10 months... Supposed intermediate wave B is 5 months, that would give us a total of 25 months for Primary B, which is a little too long in my opinion, given that Primary A took only 17 months. Because of this, the alternate count might be more valid.

Alternate count:

In this alternate count, the 3 months long ascending triangle is labelled as a wave X instead of a wave 4. This count signifies further upside to come, which would lead STI to achieve greater than 61.8% retracement level of 296x...

These... are assuming we are indeed in Primary B corrective wave, and not Primary 1 impulse wave...

Given the uncertainty in wave counts, markets and economy, I will still stick to acquiring defensive dividend stocks...

On the shorter term... we might likely be in the midst of the 3rd wave of some impulse wave...

Would it be the 5th wave or the A wave of A-B-C-X-A-B-C, or neither? Only time will tell.... I'm not a fortune teller anyway...

Monday, December 21, 2009


An interesting paragraph from Stock Trader’s Almanac 2010

Santa Claus tends to come to Wall Street nearly every year, bringing short, sweet, respectable rally within the last five days of the year and the first two in January. This has been good for an average 1.5% gain since 1969 (1.5% since 1950). Santa’s failure to show tends to precede bear markets, or times stocks could be purchased later in the year at much lower prices. We discovered this phenomenon in 1972.

Friday, December 18, 2009

STI Updates

STI's rising momentum seems to be slowing down... My wave count still stands at the moment:

This 5th wave has so far taken 1.5 months.

A recap of my wave count with first wave extension:
Wave 1: 3 months
Wave 2: 1 month
Wave 3: 1 month
Wave 4: 2 months
Wave 5: 1.5 months so far.... soon to end?

Within this wave 5, we have 5 waves as in my chart.

Wave (i) : 2605.1 ~ 2676.95 (71.85)
Wave (ii) : 2676.95 ~ 2616.49
Wave (iii) : 2616.49 ~ 2803.85 (187.36) ===> 2.618 times of wave (i)
Wave (iv) : 2803.85 ~ 2729.43 ===> 38.2% retracement of wave (iii)
Wave (v) : ???

Wave (v) will not be equal to wave (i) now. The next probable targets would be
1.618: 2845.68
2.000: 2873.13
2.618: 2917.53 equals to wave (iii)??? ===> a bit weird.

Have to see how it goes... The CCI is at a high, MFI at a downtrend resistance, Stochastics are crossing...

STI might have some further uptrend, but it will likely be capped in this final wave. As we move on, the penny fever could get larger, the Bollinger Band slightly tighter, and the general masses starting to buy in larger amounts... That could be the signal of turn.

Tuesday, December 15, 2009

My First 100K -- a long journey

I finally achieved my first $100k in cash investments/trading funds 2 months back, excluding any unrealised capital gains or losses, and excluding my CPF funds/debts. It has been a long journey, starting from my days as a kid. $100k might not be a lot to some people, but it is a personal achievement, considering I have only started working for 1.5 years.

Back then, I did not think so much about achieving financial freedom. It was not my goal; my goal was to score well in exams as a student. However, I do not like to spend on new gadgets, new clothes, etc. It's just not in my nature to spend that much. My main expenditure was, and still is, on food, food and food! Yes, I like to eat :)

I have to say, I was lucky on my journey so far. I saved up nearly 10k by the end of serving NS... Savings from young plus army allowance, teaching tuition during army, and even doing 'duties' in NS for a token fee during weekends, all played a part in my savings. During my 2nd year in uni, I was lucky to get a 3 year scholarship for the rest of my studies. The scholarship is not as much as most of the government scholarships, but it is sufficient to boost my personal wealth.

Of course, I taught a little more tuition during my university days as well. I saved up during my industrial attachment, and managed to secure a scholarship for my student exchange trip to Germany, of which I spent little overall, nett of all the scholarships. My savings were put into fixed deposits, which yield nearly 3.3% in 2007. I was totally focused on my school work instead of the stock market. This sort of protected me from the down turn.

So when I graduated, I found myself with about $45k in savings which includes $36k of scholarship money, and excludes my $25k CPF debt for university fees which I decided to pay off slowly since the interest rate is very low. This is in May 2008.

Fast forward to Dec 2009.

Many things have changed. At the moment of post, I have a portfolio which costs me $101k. I have $10k in opportunity funds. My dividends stand at $460 a month on average. My job is stable. My tuition sideline is growing well.

The journey has been long and arduous. Hard work and actions played a major role. I dream, I have ambitions, and I take action to work towards them.

How should I proceed from here, how should I move on from here... That's my main question and concern now. It's becoming increasingly difficult to plan my life. Back then, it was easy... A student planning to get employment after graduation could seek a scholarship with a bond... Right now, I'm in the wilderness.... Should I stay on in the current company? Move on to new challenges in another company? Expand my tuition sideline by setting up a tuition centre? Or perhaps just set up some other business?

On the cards are also... Marriage... First property with my future wife... Any babies...

The burden on me is getting increasingly heavy. The rat race appears to be going nowhere. I'm starting to get a bit tired.

Monday, December 14, 2009

4 ways to cut expenses

To achieve financial freedom, increasing income and cutting expenses must go hand in hand. There's no need to be a scrooge to cut expenses though. Below are 4 methods which we could employ to reduce our expenditures immediately.

1) Pay Yourself First

Many people like to spend first, talk later. The first thing they do with their monthly income is to spend before saving. Both committed and impulse expenditures come before everything else. Only what remains at the end of the month is saved. Usually, budgeted expenses don't work if expenses are placed before everything. Something else might just cropped up to cause you to spend whatever remaining you have, be it necessary or impulse expenditure.

The Pay-Yourself-First habit should be adopted. Take a fixed amount out of your income every month and put it into an investment or savings account.... then spend whatever is left. In other words, save before spending. As in the book "The Richest Man in Babylon", you won't feel much difference if you set aside a mere 10% of your income every month. Your life wouldn't be much different.

But doing this manually requires discipline! What if you don't have much discipline?

The easiest way to solve this problem is to make such savings automatic. The following could be done:

i) Get the bank to automatically transfer 10% of income into a savings account where it is not easily accessible.
ii) Buy an ILP/savings plan through your insurance agent and pay monthly through Giro.

Note: In Singapore, there's an option of buying the STI index through Philips Securities Share Builders Plan (SBP). This plan takes a fixed sum of money from your bank every month, and plough it into the index etf immediately. It's a form of dollar cost averaging.

However, if you have any debts, it would be wiser to take 10% of income to pay off part of the debt first, then the next 10% to savings/investment account. Finally, you can choose to spend the remaining 80% or save part of it as well. This is also a 'teaching' from "The Richest Man in Babylon".

2) Take charge of your expenses!

List down your expenses and study them. Try to identify where expenses can be cut. What may seem like a necessary expense could actually be cut at times; necessity is subjective sometimes.

You could be surprised that by doing so, you could eliminate expenses that over the long ter, will save you millions. Expenses that could be cut are

i) Impulse expenses, stuffs that we buy on impulse for instant gratification, after which would not make much difference to our lives
ii) Unnecessary expenses, i.e. buying things we do not really need, but buying just because it looks cheap.

With the power of compounding, the few extra hundred dollars you could save a month from reducing expenses will have a amazing impact on your future wealth. A $300 monthly savings would accumulate into >$300k in 30 years, assuming an average of around 7% p.a. The more you save, the more the power of compounding would work for you.

Try this out on an excel sheet to witness first-hand how powerful compounding such a small monthly could be.

3) Procrastinate in buying stuff

Before buying anything, always consider the opportunity costs. Do you think the stuff you are buying is absolutely necessary (subjective)? Would you regret getting it?

Consider your income as well. How long would you take to earn back the money you would spend on this stuff? Procrastinating here helps.

4) Buy discounts

We could save an additional 5% to 20% if we buy certain things only when there's a discount, or by buying in bulk, hence enjoying a mini economies of scale. Source for discounts if you can.

Example: I bought my protein powders recently with a nice discount to the selling price. I have managed to source for a consistent 8% discount after I discovered that one of my friends was the distributor of the products.

Another example: My mum buy clothes only after Christmas, after Chinese New Year and during the Great Singapore Sale since there are many discounts. She buys with a 6 months to 1 year horizon... Her new clothes (and mine as well) for the Chinese New Year has already been bought quite a long time ago, and stored neatly in the cupboard.

Note: The Chinese wear new clothes during Chinese New Year.

So, we have 4 simple ways here in which expenses could be reduced immediately. Although I mentioned procrastination in buying stuffs, do not procrastinate in cutting your expenses! Start now. It will only materialise if you take action immediately.

STI Updates

Updated Chart

It does appear that the rally still has some more legs to go; we are still halfway through the 5th wave.

If the above is true, then wave (iv) should be complex since wave (ii) was simple. That means, we might have a flat or a triangle in the works.

We might really just proceed towards the STI 61.8% retracement level between 1455 and 3906. That means, the 296x region.

Have to see how it goes. Perhaps the stagnancy I expect from STI could be playing out as the wave (iv), with the final wave (v) playing out in Jan 2010.

Sunday, December 13, 2009

NOL Chart

NOL seems ripe for a buy. ===> Edit: NAH!

Not shown on the chart as there wasn't space, NOL has covered the mini gap formed between $1.51 to $1.52 from 15th Jul 09 to 17th July 09.

Well supported at the moment.... Hope I can still get it on Monday.

Tgt entry: 1.52
Cut loss: 1.45
Tgt exit: at least 1.57 to 1.6... or more... will have a trailing stop....

Edited: A descending triangle formed sinced 4th Nov... It's valid as it was a downtrend before 4th Nov.

Bearish instead... of bullish.... Any possible rebound could just be technical...

Shall see...

Friday, December 11, 2009

STI Updates

A series of hanging mans and shooting stars on the dailies. An early warning? The series of candlesticks seem to suggest that the market is unwilling to go up much further. I do hope it doesn't happen...

STI covered the gap yesterday at 2770 region. With Dow green, STI could likely open green.

Missed Starhill at 51 cents as I was busy at work. Not going to chase it at 51.5 cents yet. Shall see and hope this price reach again...

Good luck!

Thursday, December 10, 2009

STI Updates

A long time since I really updated this blog on STI... Been really busy with stuff... :(

Anyway, my updated chart and counts

This chart builds upon the earlier count of the 3 months long ascending triangle, of which I counted as a 4th wave. To me, the 5th wave has started at the 2605 region.

Earlier, I made a mistake of pre-empting the market too early. I took into account the great bear line, which was breached without much effort. Also, the time frame of the 5th wave was too short.

The most recent count seems to fit the rules of Elliott Wave better. STI appears to form a rising wedge. It appears possible that the we are in an ending diagonal in the 5th wave of A wave of Pri B. This rally looks like it has some more legs, but the rising wedge pattern that is forming is indeed worrying.

In addition, MFI has been showing negative divergence since 29th July, and this divergence is continuing now.

Also, the signs I mentioned earlier that could signify a possible turn were
1) Bollinger Bands closing up
2) Penny stocks in play
Both signs are now playing out as well.

When it looked 'obvious' that a crash is coming in October, it didn't as expected.
Now, when it looks so obvious that a year end rally could be in place, could it not come as well?

The stars are starting to align themselves. Perhaps I should look into offloading some of my holdings soon... A need to rethink if I should really keep too many for long term dividends...

Sunday, December 6, 2009

STI Updates

Candlesticks Analysis...
The last 4 candles of STI...

Advance block with the last candle being a white hanging man
a black confirmation candle which is a half past six shooting star as well.

plus last 3 candles look like an evening star as well...

The bollinger band is starting to close up too.

Dangerous to go very long on most index stocks. I will still be watching out for my Starhill and Starhub....

Good luck trading.

Saturday, December 5, 2009

Starhill Global REIT: David Jones Building

Finally, I have gotten in contact with a friend who is now staying in Australia on the recent purchase of David Jones building by Starhill Global Reit. The following is my friend's reply and analysis:
1. I must admit that I am no expert in properties, less so in Australia. but I will give you my personal view. You decide.

2. David Jones (or DJ as it is popularly known here) is a department store behemoth in Australia. They are like the Takashimaya in Japan. DJ stores are all in the heart of the city, or CBD in its major location. So, DJ the business and its associated entities are all quite well regarded in Australia for now.

3. That said, the David Jones building that Starhill Global Reit acquired is in Perth, so it is no where near the big 2, Sydney or Melbourne. Retail property development in Perth, as you would imagine, lags the big 2.

3a. If you have a short term view, it may not be as attractive as I think it will take a while before the commercial/retail property development takes flight in Perth.

3b. It will be attractive if you plan to hold your stock for a while. For instance, I have a longer term view on stocks ( e.g. I bought Apple stocks @ US$20 and sold at $90+ after split 2 years ago, but I held it for more than 8 years. Of course, on hindsight, I should have kept it as Apple is now about $200 ;-). Nevermind, tt's another story). Reason why it may be worth the thought if you have a long term view on stocks:

3b-i) Perth is one of the fastest growing cities in Australia. the property price median in Perth is amongst the highest, if not highest of all of Australia, even tops Sydney. it has taken a beating last year but it has recovered nicely recently). I think this will apply for commercial properties as well.

3b-ii) Western Australia is resource rich. It has all kinds of minerals imaginable, and also lots of gas and oil field not opened. Hearsays are the government will tender some of these out gradually over the next 20 years, so sustained growth is a given according to many in western Australia. This partly explain 3b-i. Also, because of China's insatiable appetite for resources to fuel its own growth, Australia remains a key partner to China, especially western Australia.

3b-iii) There have been lobbies by businesses in western Australia to get the state government to approve longer retail hours and also store openings on Sundays. The law still forbid this on certain trades to do so. This seems an oxymoron elsewhere. Even if it didn't happen this year or next, it will happen sooner than later. I think this is a forgone conclusion. So, the retail scene in Perth can only get better, imo. Here in Melbourne, there are already 24 hrs shopping like Kmart and Macdonalds. My fave roast pork noodle shop open for supper till 3am. http://www.watoday.com.au/wa-news/last-chance-push-for-extended-shopping-hours-20090929

4. At the macro level, property investors in Australia can do no wrong of late. The population explosion & strong economic outlook contributed to the continuous performance growth here. I think it is what prompted Starhill Global to take the plunge in the DJ building in Perth. DJ the department store will not go away. A quick research tells me that DJ has the tenure at the DJ building in Perth signed till 2032. So, it is quite solid in that respect.

5. So, that's all my 2 aussie cents , or 2.6 SGP cents worth. Hope it helps. As I said, if you plan to hold on to Starhill Global for a while, it may be worth the investment. If you are looking for a quick gain, it may not work to your advantage.
This is a friend I can trust.

So now, with my FA on the Malaysian and Australian properties settled, I think I will still go ahead with my purchase. My target entry price will be 51 cents now as it appears that Starhill is unwilling to break the double support to reach the previous low and 200 MA at 50 cents.

However, I might have to weigh my options between this and Cambridge REIT as well as Cambridge is currently offering a higher yield of around 12%.

Let's see how it goes...

Starting on Goal 2010

Back from reservist.

I have started on writing notes for my tuition students according to Goal 2010 as mentioned earlier in my 4th goal. Hence, will be rather busy from today onwards.

The rat's race is starting all over again. Back to the real world :(

I will do an analysis of the market when I have the time this weekend.

Monday, November 30, 2009

Going for 1-week reservist

I will be off from market for 1-week of reservist. Will still be getting my girlfriend to help me queue for these 2 stocks for dividend investments.

1) 3 lots of Starhub
Tgt Price: $1.83 (changed to reflect 5 cents dividend after it was at $1.88)

2) 10 lots of Starhill Global REIT
Tgt Price: $0.500

Total price: $10640 excluding brokerage.

The technicals of Starhub does not look favourable. However, I believe in the long term management. So I would queue to buy at the support price.

Starhill has 2 supports. Depending on the price actions, I might enter at a later date of $0.520....

If these two trades went through, they would sort of finish up my spare cash and my salary + 2 months of annual wage supplement, with only my coming dividends left for me to spend. However, it would increase my monthly dividend amount to about $540 from my dividend and investing basket, bringing me one step closer to my first target of $1000 per month.

Tuition is starting soon, so I will be able to build up more funds again to do more things.

Sunday, November 29, 2009

Starhill Global Reit -- selldown unwarranted?

Starhill REIT recently made some acquisitions.

Starhill Global REIT proposes to acquire David Jones Building in Perth for S$148.0 million; And enters into heads of agreement to acquire Starhill Gallery and Lot 10 in Malaysia for S$423.3 million

Simply put, this acquisition will result in increased dividends per unit (DPU). Why not?
Without adding the three new properties, at current price of 53 cents, it's about 7~8% dividend yield. Adding the acquisitions, we could possibly be looking at nearly 9% dividend yield per annum at the current price.

Yet... why the selldown? Some reasons I could think of:

1) Rights issue was supposed to reduce debt, but instead, with these purchases, the amount of debt increased.

But.... If all the rights proceeds are used to pay debt, it would be very silly, because loan interest is much lower than net property yield. In so doing, there will be very little upside on DPU on saved interest.

Acquiring assets which you're familiar with and possess potential for enhancement will generate higher yield than loan interest.
Question is, when you have cash on hand, and asset prices to the low side, with bank lending interest at a low too, do you use the cash plus loan to buy cash generating assets or do you use up your cash to pay existing loan? The answer should be obvious.

2) The two Malaysian REITs are bought too expensively. Suck thumbs to retail investors for you have no control.

The key thing is, other than because they buy from their own sister REIT, what are the other reasons? Who determines whether they bought it too high? What and who determines the "too high"...? From the other REIT's investor point of view, it might have been sold too cheaply?

Taking a leaf from MIIF... They sold MEIF... There were also rumours here that claimed that they sold too cheaply to their own people... But the share price has been rising since then...

3) The two Malaysian malls they bought are not good.


I asked my Malaysian colleague about the two Malaysian malls... Without knowing anything about Starhill, he told me it's almost like Ngee Ann City and Wisma at Orchard...
Is it a coincidence that Ngee Ann City and Wisma are owned by Starhill as well?

Starhill seems to have succeeded in their quest of acquiring assets in prime locations.

Why the selldown? Perhaps some big institution is rebalancing their portfolio. As to whether I can get it at 50 cents.... only Mr. Market knows. Depending on the price actions, I might just buy in more at the 51.5 cents to 52 cents region.

Saturday, November 28, 2009

Random Thoughts: Stars stars stars

Recently, I shared that I will still be waiting for Starhub at $1.88 and Starhill at $0.50... Why?

I combined a little FA with a little TA to derive these values.

My FA is purely (and simply) dividend investing... I believe in the long term dividend sustainability of these two companies...

Starhub is a telco, which is defensive in nature. It is in their culture to lead the market (they are the first to have pay TV, free incoming calls, free dial up internet in SG). Hence I believe they have the capability to sustain dividends via their innovativeness. 10.5% yield is attractive.

Wednesday, November 25, 2009

STI Updates

Nothing much to update. So won't be posting a chart here.

MACD remains bullish. Waiting for a turn.
CCI is still high.
MFI's negative divergence remains.
Stochastics and %R both remains at a high, overbought region.

The bollinger band is opening up, signifying greater volatility. When will the party end? Perhaps when the bollinger band starts to close up.... all the stars will align....

Investors should only take on highly selective longs. On my radar are Starhill and Starhub. Patience is key now.

Tuesday, November 24, 2009

Investments in Health

Sometimes I wonder... whenever I spend on health, i.e. gym expenses, supplements, doctor fees, should they be treated as an expense or as an investment? Afterall, health is wealth.

It's the same as when I spend on books or invest in gaining knowledge for myself... An expense or an investment?

At the moment, I'm tracking such spending as expenses, incorporating them into my maximum of $900 a month. Yet expenses in buying stocks such as Starhub are not included into my expenses column. Weird right?

These thoughts have been revolving around my mind for a period of time, and I have decided to blog on it when I purchase some supplements over iherb.com because it is cheaper to do so (due to weak USD).

I guess I will continue to list them as expenses on my personal balance sheet so that my actual "useless" expenses could be reduced subconsciously.

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In case you are wondering, the amount is in USD and the free stuff are part of the free gifts provided by iherb.com. It's so much cheaper to order direct from the wholesaler than shops in Singapore who charged a premium for ordering. Some money saving tips here ;)

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Lesson learned from Ying Li's loss

Loss, but I'm happy. The reason being, I learned a valuable lesson in trading.

Sell on emotions ==> the worst mistake a trader can make. I bought near the lows at 0.63, I sold at the low at 0.62, to see it rise to 0.66 in 2 days.

Lesson learned: because I used the daily charts, I should wait for a few days, not just 2 days, before cutting losses. For such short time frame as I have done, I should see the hourly charts in the future, and not the daily charts. My set up was there, but my time frame was wrong.

My reason for purchase was because... Ying Li was at the support of the down channel. The CCI and %R sold severe oversold, and a rebound is due soon. Indeed, it rose today.

Trading is not as easy as seeing indicators and buying or shorting because of indicators. It's also about money management and emotional control... something which cannot be easily learned from books.... I have much to learn :)

STI Updates

Interesting price actions by STI today to destroy the symmetrical triangle formation. Instead, it appears that to be the 3rd wave of v of 5th today.

Closing at 2797, we are likely to see 2800 break very soon. A backtest of 2800 will then be expected before a final actionary wave to end perhaps at around the 2850 region as many of my respected CNA forum members mentioned.

CCI and %R are both on the high end. Shouldn't need to wait too long for the reversal to occur.

Monday, November 23, 2009

Goal 2010

As the year draws to a close, it's time for me to set my goals and visions for the year 2010 so that I have a clear path and direction to take.

My goals for 2009 are here:

Completion Report:

1) Goal of matching my full-time engineer (fresh grad) pay with my tuition income
Goal achieved.

STI Updates

It appears that STI is triangulating now.

We could either be in the iv of 5th wave upwards, or in the ii of 1st wave downwards. I lean towards the first scenario because it seems to fit well with current events, and triangles are more probable in 4th waves than in 2nd waves.

Likely some more upside to come. Shorts should still be held back, not the time yet...

Again, the widest part of the triangle is 40 points, so a breakup at the end should last about 40 points as well...

Elliott waves are indeed interesting :)

Saturday, November 21, 2009

My Money Allocation

A little spider web/mind map on my money allocation.

Savings include funds in money market fund as well.
Profits from trading baskets can be directed to the dividend and investment baskets, or stay within the trading basket.

I trade mainly with the dividends I received. Therefore, any losses would be, to me, a return of profits/dividends to Mr. Market. Of course, prudence is required in trading. No overconfidence, cut loss properly set, etc...

This is the cycle so far which I adopt, and repeat, again and again. Hopefully one day, I would have sufficient funds to include Properties and Bonds as well.

Friday, November 20, 2009

STI Shooting Star

Finally, the candle I was waiting for! A shooting star!!!

Indeed, STI went near 2790 before reversing... If only I was so accurate in my buys as well for Ying Li :(

A shooting star is a bearish reversal single candle. And happening at the point where the 5th of 5th wave is supposed to be?

It would be good for STI to close a little lower than today's open to confirm the white shooting star candle for a definite reversal.

Year end rally coming? Doubt it.
2745 will likely be visited again.... And broken... For intermediate B of Primary B downwards....

Update: Distribution looks to be going on... Be careful of new longs.

Thursday, November 19, 2009

Yet another trading loss

Long Ying Li 0.63, cut loss at 0.62...
Wrong trade, wrong everything. Argh....

Down with another $153.40 again.... Ouch!

Seems like I can't trade pennies well... A different strategy and mentality is required... And this wrong trade is affecting me in my work a little.... Cut loss saves my mind and soul, especially when I'm expecting STI to reach interim top.... I'm just not cool enough...

All in all, mistakes all over my itchy fingers... Serve me right... Chased to buy because indicators were very oversold...

But as usual, Murphy's Law will dictate that Ying Li will rise up the ashes tomorrow because I sold at a loss. Good luck to those still holding...



Wednesday, November 18, 2009

STI Updates -- Just a little more

Appears that I was right in shorting, but my emotions caused me to cover at a loss when I could have profited today. Lesson learned: Leverage is ok if your cut loss point is within your means.

I re-did my wave counts today, and discover that we could have a little more upside. How much more, it's hard to say. However, a minimum target would be to reach at least 2790.

Wave (i): 44.64
So if wave (v) is the same as wave (i), 2745 (today's low) + 44.64 is almost 2790.

Market is toppish... Will we really have a year end rally to even greater heights? I'm starting to believe that there might be, but the contrarian in me says no! Don't follow the crowd!

The news reports are clearly getting very bullish. Is that a good thing? I don't think so. News are generally lagging indicators; stock markets usually precede economic data by an average of 5.8 months according to my broker.

How far will wave (v) go....? I'm unsure. But we have to experience extreme optimism for this to occur.

Shall see how it goes. It's definitely not a good time to take on long term longs. I'm expecting a minimum of 300 points correction soon... It should be time for a nice short term rebound at 2745 resistance turned support line.

STI -- Wave 5 in progress (possibly not ended)

Earlier, I mentioned that we could likely have had a wave 1 extension rally from Mar 09.
Wave 3 is from 2235 to 2700.

According to Elliott Wave Theory, wave 3 cannot be the shortest wave. Since my wave 1 is longer than my wave 3 due to a wave 1 extension, wave 5 must be smaller in length than wave 3! This, we can see from the chart above.

The theoretical maximum would be 2605 + (2700 - 2235) = 3070 (chart not to scale).
Scary proposition for the shortists? (Damn... why didn't I think of this before raising short...)

Any break above that number would prompt a recount.

Looking back in time, at 12 Mar 08 and 24 Jul 08, a resistance was formed near this 3000 mark.
Will the rally extend till then, henceforth killing all the shortists at the current level and fuelling extreme optimism?

Shall see....

Tuesday, November 17, 2009

Monthly expenses vs passive income

One key thing on the route to financial freedom is to be aware of your own expenditure. You maintain your own balance sheet, cashflow and expenses.

So how are my expenses?

Let's have a simple breakdown. I track my daily expenses on an excel sheet, and for the past few months, my expenses on food, phone bills, transports, misc stuff, are <$800. Expenses on food, phone bill, transport, misc: $800 (take the max, although I allow up to $900) For household allowance: $500 CPF Education Loan repayment: $339 Other 'expenses' because of tuition are not included; they are simply deducted from the total amount earned. I consider it a separate entity. So lo and behold, my monthly requirement would be $1639!!!! That seems like a lot :( This is about 23.6% of my take home pay on the better months of tuition (I chose 23.6% because it is a fibonacci retracement number.... lame right?)

STI -- Some more legs?

Made a mistake shorting the market with the previous analysis of 2777. Got slightly burnt by putting the cart before the horse. Just like corrective patterns could be complex and not just a simple A-B-C all the time, impulse waves could also have extensions, leading to a 9 wave rally.

The pattern hasn't been fully formed yet. There are now 2 possible scenarios. Firstly, we might be in the 5th of 5th wave. However, the wave personality doesn't feel like it; it doesn't feel like many people are buying in. In fact, it seems more probable that institutional investors are buying in.

Much as I was skeptical about this initially, it does look as though the market will be heading higher towards psychological resistance 2800, and possibly break it to go higher. Again, being the 5th wave, I'm expecting the rally to finish anytime soon. The main trigger now would be a nice reversal candlestick to form. I'm still waiting.

CCI is indeed high, but there's no stopping of it staying high for a few days, i.e. in the July period.

Moving forward, there might be some pullback or profit taking. Let's see how this will go.

Lost $75 -- mistake detected

Today, I shorted the Philips CFD index today using poems CFD at STI 2773, but covered at 2782 when STI broke 2780 resistance... Fortunately for me, no brokerage charge as it was my first trade.

As milamberz in CNA forum puts it:
Shorting --> Indefinite losses if you cannot control your cut loss pts. Stocks are meant to create wealth and go up with inflation. Since duno how many eons ago, there is no such thing as deflation anymore. If there is no deflation, stocks can only get more expensive. Hence longing is a more logical choice if you believe in inflation rather then deflation. SAY if you shorted at 1900. Are you sure STI will get back to 1800 for you to cover? Pscyhologically you are at a losing end already.

--> Furthermore, there are finance charges for shorting. This is a killer as it means you cannot hold your shorts for long whereas if you long, you can hold the shares as long as you play within your means

---> Even at such a stage, shorting may mess up your mind as it stops you from going long at certain point. There are risk involved.
My emotional maturity clearly is not sufficient to short. I will need to brush up on this.
Going short is much tougher than going long.

My main mistake here is exactly what I talked about way earlier.... pre-empting the market. Granted, Yahoo charts wasn't working today, so I couldn't check the intra day indicators. However, that's not an excuse.

When trading with Elliott wave patterns, a high probability set up would be to wait for a pattern to be complete before entering the trade. I did not do this. Lesson learned.
Higher probability can be achieved if we couple a complete pattern with trendlines and candlestick patterns.

Going forward, I must remember not to be itchy hand to pre-empt the market..... :(

Monday, November 16, 2009

Portfolio Updates

A short update on my portfolio.

My portfolio is mostly unchanged.

Dividends Basket -- Mainly for dividends
6 lots of SPH @ 3.65
6 lots Capital Commercial Trust @ 0.84
13 lots of CitySpring at 0.51 (7 lots from rights)
16 lots of Macquarie International Infrastructure Fund at 0.305
2 lots of ST Engg at 2.28
10 lots of Starhill Global Reit at 0.54
6 lots of Starhub at 1.895
26 lots of GRP at 0.20

The total cost here is about $64,980 and the expected average monthly dividends is about $444.

Investment Basket -- Mainly because I like the business or for growth
5 lots of Breadtalk at 0.37
2 lots of Capitaland at 1.64 (averaged down by selling 1 lot at $3.50 before)

Trading Basket -- Hoping to sell off
30 lots of Hor Kew at 0.125
20 lots of LC Dev at 0.21
2 lots of Cosco at 2.67
60 lots of Berlian Laju at 0.117
20 lots of China Sky at 0.245
2 lots of Singtel at 2.98

Lost $75 in shorting the index today as well... :(
Bad trade...

Went for ChartNexus Accelerated Learning Program

I went for ChartNexus's Accelerated Learning Program today, courtesy of Philips CFD. It's a basic course covering the following:
  • Understanding the concept of price movement
  • Analysing volume on the charts
  • Trading on support and resistance
  • Utilising important candlestick reversal patterns
  • Money Management: Your key to survival
The trainer was Kelvin.

Saturday, November 14, 2009

STI -- tumultuous times ahead

Today's action prompt me to return to an earlier count of an ascending triangle:


Bulls came back fiercely with a bullish counter-attack candlestick formation against the bearish dark cloud cover, signalling some more upside to come.

It appears that STI is going to complete the 5 waves.

An little update of the wave counts so far:
Wave (i): 2605.1 ~ 2676.95 (71.85)
Wave (ii): 2676.95 ~ 2616.49 (60.46)
Wave (iii): 2616.49 ~ 2745.33 (128.84)
Wave (iv): 2745.33 ~ 2704.93 (40.4)
Wave (v): possibly equals to wave (i) ==> 2704.93 + 71.85 = 2776.78

I mentioned in yesterday's post about the unfilled gap between 2763.42 and 2773.05.
2745 and 2755 could stand in the way, but the expectations is for wave (v) to cover the gap. The market is likely to break past the great bear line at 2755 to trigger some short coverings and bring about even more bullishness. I believe that 2777 is now the most probable terminal point of this wave of intermediate degree. This will also almost satisfy the 5th wave guideline by Robert Pretcher for a triangle occurring in the 4th wave.

In short, a new high could likely be formed again, with this being the 5th of 5th wave. Extreme bullishness will be observed in the market in this final climb, especially with Dow Jones being so green now. Definitely not a time to join the mania of index component stocks.

Meanwhile, I'm still observing if penny runs are common in 5th waves since they usually signal the end...

Friday, November 13, 2009

My Dividends that are coming

Despite all the gloomy analysis about STI reaching an interim peak, on a lighter note, my dividend basket is giving me dividends soon :)

SPH $1080
CitySpring $136.50
Starhub $300
Starhill Global REIT $95
GRP $260

Trading Basket which I'm still holding:
LC Dev $50

That's a total of $1921.50 coming!
Together with AWS (year end bonus) coming, my opportunity funds shall be built up and fortified again by January.

It's so exciting :)

STI Candlestick: Dark Cloud Cover

According to Candlesticker.com
If the black real body’s close penetrates deeper into the prior white real body, the chance for a top increases. There are some Japanese technicians who require more than a 50% penetration of the black day’s close into the white real body. If the black candlestick does not close below the halfway point of the white candlestick then it is better to wait for confirmation following the dark cloud cover; and even if it does, a confirmation may still be necessary. This confirmation may be in the form of a black candlestick, a large gap down or a lower close on the next trading day.

Notice that the dark cloud cover did closed more than 50% into the white body, signifying a potential reversal.

Coupled this with
1) Elliott waves showing that a major top is near
2) MFI has not broken new highs, signifying negative divergence
3) high CCI
4) Nearing the top of the bollinger band
5) Nearing the big bear line at 2755

Also, 2745 was a support tested twice on 22nd Jan 2008 and 17 Mar 2008 before it was finally broken through. It's possibly a strong resistance.

Finally, between 18th Aug 2008 and 2nd Sep 2008, there's an unfilled gap between 2763.42 and 2773.05, which could be the next resistance if 2745 and 2755 are broken through. Will STI want to rise to cover this gap before the down?

With so many potential stops ahead, it's hard to see how STI can push much further. If we want the rally to continue, STI had better be green tomorrow to break the dark clouds.

Thursday, November 12, 2009

STI -- Climbing a huge wall

A strong performance by STI today. The feeling is so bullish... It just feels like.... if we don't jump in now, we will miss the boat to STI 3000 and beyond!

But is that really the case?

Volume was still rather low. MFI hasn't broken new highs (I use MFI instead of RSI as it takes into account volume as well).

The CCI is also crossing the 100 mark.

STI is approaching 15 years resistance line at 2755, as calculated earlier by linear regression.

Selected fresh longs should have been collected last week, not today. Example, my Starhub collected at $1.88 on 4th Nov 09.

It just feels so right, yet so wrong.

I really wish I'm wrong, and the rally goes on forever towards STI 4000; I still have some counters stuck in the red. But in reality, can this be achieved without any significant correction? I doubt so. What goes up, must come down... this is a law of nature.

We are entering dangerous waters now. Tread the treacherous path with care.

Wednesday, November 11, 2009

STI Updates -- Last stage of rally?

I certainly hope this is not the last stage of the rally... But... my wave counts seem to say so...

Yesterday's count was quite accurate. An update

Of mini waves:
Wave i: 2605.1 ~ 2676.95 (71.85)
Wave ii: 2676.95 ~ 2616.49 (60.46)
Wave iii: 2616.49 ~ 2726.9 (110.41, ~1.5 times of wave 1)
Wave iv: 2726.9 ~ 2697.89??? (29.41, slightly more than 23.6% of wave 3)
Wave v: ... a final 5th wave to reach 2755?

Notice that wave 1 took 17 days, wave 2 took 17 days. Wave 3 took 9 days, wave 4 took 11 days.
Wave 5 could possibly take between 9 to 11 days as well perhaps give and take few more days. Today is the 9th day... The first possible date could be 12th Nov, 11 days for wave 5... Let's see how... I was thinking how it seems impossible to reach first target 2755 so soon... But the last 3 days' price actions seems to go up very fast to help achieve it...

The A wave of Pri B should be ending soon, within a few trading days. If my wave counts are correct, we could probably see STI break 52-week high within the next few trading days, but that could probably be the last and final mini rally. If this count is correct, then the B wave could bring a correction of between 23.6% to 38.2%, which means a correction of between 300 to 500 points.

Point to note: If the final portion is 5 waves up, then this is not an ending diagonal of 3-3-3-3-3.
I will have to observe as it unfolds and learn from this. It's a great learning opportunity again!

Tuesday, November 10, 2009

STI Updates

On hindsight, today's price action should be expected. That's if, I had done a parallel line check. (I'm a very maths person :p )

The chart below is my preferred count on the 5th wave of STI.

The dotted line is parallel to the resistance line at the top. Hence, since the support line is at a higher angle, this could mean a rising wedge is being formed, although it is a rather mild one.

Everything seems to start falling in place, or so I hope. The great bear resistance line of 15 years stares down at 2755 region. In a possible 5th wave scenario, the 5th of 5th wave might not reach the resistance line, but instead fall short of it at 2755.

Now that a rising wedge is determined, this fits with what went through my mind yesterday (and also in yesterday's post) about an ending diagonal for the 5th wave.

So here we have, 5 wave counts of a larger degree A of Primary B, as shown in this post. A mild rising wedge that has the potential to break in mid Nov.

As for the mini wave counts (which I'm often wrong), the first wave of the 5th of 5th wave started on 29th Oct 09, 2nd wave ending 2 trading days later, and now we are in the midst of the 3rd.

Wave 1: 2605.1 ~ 2676.95 (71.85)
Wave 2: 2676.95 ~ 2616.49 (60.46)
Wave 3: 2616.49 ~ ????? =========> 2732.34? (1.618 of wave 1)
Wave 4: A possible 2732.34 to 2687.93 as 38.2% retracement before....
Wave 5: ... a final 5th wave to reach 2755?

Let's see how STI behaves.

Could there be any other much much more bullish alternate counts?

Monday, November 9, 2009

Intro to REITs Investment

What are REITs?
REITs stand for Real Estate Investment Trusts. They are specialized companies that invest in commercial, industrial, residential and healthcare real estates. Examples on the Singapore Stock Exchange includes CapitaCommerical Trust (Commercial), Cambridge Industrial REIT (industrial), Saizen REIT (residential) and Parkway Life REIT (healthcare). These companies buy and manage properties including shopping malls, offices, hotels, hospitals.

REITs usually pay a generous dividend because they are required by law to distribute most of their earnings to shareholders. In exchange, they receive tax incentives.

STI Updates

An interesting on chart, yet boring day on Friday. Straits Times Index was trapped within the 20 MA and 50 MA.

It does look as if that STI has touched support in this post here, and might follow the green target to my eventual target of 2755 (updated from 2790) 15 years resistance line. If this plays out, I will have to reconsider my wave options. The symmetrical triangle was also invalidated because there was no significant increase in volume traded.

However, we still have not broken past the wave (i) of the previous post
There's thus a chance for STI to follow the red arrow down.

It's a sideways market at the moment, with perhaps a very mild uptrend. Let's see how the next week goes.

Meanwhile, I would have to read up more on possible types of 4th and 5th waves as I'm rather confused how it would play out. The waves look similar to a 3-3-3-3-3 ending diagonal, yet there's no rising wedge observed at the moment. I wonder if this is possible.

Will update as I read up more.

Friday, November 6, 2009

STI Updates -- Bear rally ended?

Has the rally ended?

I thought I saw some impulse waves down from 2739.

A symmetrical triangle is observed, with the vertex terminating within these few days, probably tomorrow. In layman terms, we will very likely observe a bigger movement tomorrow, on 6th of November 2009, Friday, as compared to the last few days.

With charts also showing negative divergence, MACD pointing towards bearish, my initial expectations is downwards. Let's see how the waves unroll before recounting again. With Dow Jones +174 as I type now, I might be wrong. Will the market be kind enough to let me run road for some pennies?

It's time for quick and nimble trades instead.... The feeling is reminiscent of March 09... We might have another rally.... But it will likely be short-lived.

Wednesday, November 4, 2009

Bought Starhub and GRP

I bought in 3 lots of Starhub at $1.88 (nice round number) and 26 lots of GRP at $0.20 for 9.5% and 10% yield respectively. These will be added to my dividend basket.

GRP was a heads up from MusicWhiz's blog (see Blogs I visit).

However, with this, my opportunity funds has dwindled to near zero :(
===> This is banking on the fact that AWS is coming in a month's time, along with dividends from SPH, Starhub, CitySpring coming in December. My opportunity funds should be built up by then.
===> I have also 3k cash in Poems CFD waiting... If any cheap valuations come along, I might use it to buy and hold instead.

Linear Regression Analysis on STI

Since I'm teaching H2 Maths tuition, I will be using linear regression analysis in H2 Maths to assist in calculating the most accurate resistance value. For anyone interested in finding me for tuition for A level physics and maths, please see Strategic Tuition and ExamWorld.

The data I will be using would be the points labelled graphically in an earlier post.

We have here the following data from the monthly charts:

Mar 1994 (zeroth month): 2482.9
Feb 1996 (23rd month): 2504
Mar 2000 (72nd month): 2582.94
May 2006 (145th month): 2666.33
Mar 2008 (168th month): 2745.96

In my linear regression analysis, the variable x shall represent the number of months after Mar 1994. The variable y is the value of STI, excluding inflation.

A simple excel calculation when we consider the linear chart:

A simple excel calculation when we consider the logarithmic (base 10) chart:

As we can see, both linear and log charts point to 2754~2756 as the resistance for this month, Nov 2009.

The linear product correlation for both the linear and log charts stands at a high 0.989, signifying a very strong linear correlation between the Straits Times Index and time line.

Well, isn't that expected of trend-lines? :)

So to me, anything between plus minus 10 from the region of 2755 could potentially be a dangerous zone, or a reversal point. In fact, with this calculations, 2739 might have been the peak.

Any new long-term investment in index stocks now would be 'scraping the bottom of the barrel'. An interim peak looks near.

All I hope is for prices to rise sufficiently for me to exit my pennies with minimal losses, of which paper losses have ballooned from 1k to 3k :(

STI Updates

The recent price actions prompted another recount. This recount was part of the wave options mentioned recently which I had earlier thought as secondary.

In this count, it appears that wave 5 has already started, but it is in a very slow moving channel.

Let's add on the fact that the great 15 years resistance line stares down at near 2725, as pointed out by Jingwei in his earlier comment. Thanks Jingwei! This is his chart:

It explains well the reversal at 2739 recently. I shall take the critical points and do a little regression analysis tomorrow to determine the exact value.

So, it does appear that we are well in wave 5. Take note too the negative divergences seen on the oscillators since the supposed wave 5 started.

So now, my puzzle is how the subcounts are in this final 5th wave. Supposed we still have a final 5th wave, we could possibly have a failed 5th wave occurring at the great resistance line... Or we could already be in the first wave downwards, and be waiting for a 2nd wave upwards to near this resistance line to allow us a respectable exit. In both cases, a bullish rebound is to be expected.

The possible trigger for the next sell-down could be the release of the actual US GDP data on 23rd November.

Let's see how it goes.

Meanwhile, I will be buying dividend stock GRP (noticed due to MusicWhiz's blog post) to keep long term for dividends. The fluctuations for this stock isn't that high, and the dividend yield is 10%. :)
A FA play in which TA thoughts on STI will be ignored.

Tuesday, November 3, 2009

STI Updates

Today's price action sort of hinted with a higher probability that the 4th wave has ended on 2605 on Thurs.

A zoom into the 4th wave of yesterday's post:

Note that for this count, wave 1 is larger than wave 3. The rules of Elliott waves state that wave 3 cannot be the shortest wave of wave 1, 3 and 5. This means that, wave 5 will be a shorter wave than wave 3, i.e. we cannot expect a smooth path upwards.

Again, posting for another time, triangles like the one above are usually corrective waves, and always occur in the position prior to the final actionary wave in the pattern of one larger degree, i.e. wave four of an impulse, wave B of A-B-C, or final wave X in double or triple zig-zag or combination. And when a triangle occurs in the fourth wave position, wave five is sometimes swift and travels approximately the distance of the widest part of the triangle.

The calculations done and posted earlier shows 2784 as the probable end for wave 5, which coincides with 2790 on the 15 years resistance trendline. So that's my expectation of the tipping point.

Today likely marked the end of wave 2 correction at 2616 (near to 78.4% fibonacci retracement of the 2605~2676 move). In the intra-day chart, we can observe 5 motive waves and 3 corrective waves today:

Tomorrow is likely the beginning of the 3rd wave of wave 3. How it would goes, we will have to see. However, as mentioned yesterday, I'm still expecting a mini bull run to 2790 before the tipping point.

Perhaps I will have multiple chances to offload some pennies, and also to sell Singtel away for profit.

Good luck trading.

Sunday, November 1, 2009

STI Updates

The following is a wave count (more bullish view) which has been at the back of my head for quite a while.

A wave 1 extension will go in the following pattern:

It appears that the A wave of Primary B is nearing to an end (not the C wave as commonly counted, and as counted earlier in this blog). This means that Primary B might not be ending any time soon.

The reason is because the correction in June retraced about 23.6% of the rally from March to June, and this is a little too shallow to be a wave B. On the other hand, it retraced about 61.8% of the extended 5th wave of the first wave. Hence, I lean towards the count at the top of this post as of now.

My only puzzle left for this count is whether the 4th wave has ended on 19th Aug 09 in a simple zig-zag, or 29th Oct 09 in an ascending triangle, or whether we are still trapped within wave 4. Reason being, we can view that STI as being in a rising channel since 19th Aug 09. These 3 wave options will be in head as STI unravels more waves.

However, with this count, the conclusion is the same. Any of the 3 possible wave options tells that STI is likely to have one last impulse wave upwards (which must be shorter than wave 3), before a major downturn.

Turning to candlesticks, STI closed with a gravestone doji (almost) at the 50 MA on the daily chart. It seems bearish bias here. With USA having dropped so much on Friday, tomorrow might open up extremely red.

The first line of defence on my chart's triangle (or up channel) for STI is 2607 region. We will have to see how it goes after that.

My strategy:
Ride out the volatility, and wait to accumulate more of Starhub at a lower price for investments. Meanwhile, I might raise CFD shorts or try warrants again (PW this time) to hedge against my long positions when the eventual downturn (which everyone is waiting for) comes.

Saturday, October 31, 2009

Crash coming... Panicking? Don't!

Ok, an imminent crash is coming. Do you panic? Run! Shout help?!


First, ask yourself if you are a trader or an investor.

If you are a trader going on the long side, then it's time to cut loss or look for an exit strategy. Then place yourself on the short side. Being nimble is key.

A trader thrives on volatility and nimbleness. Be it bull or crash, both are opportunities to profit from going short or long. The key is discipline in following a system.

If you are an investor, a crash is an opportunity to buy more of your favourite company at a lower price!

A crash is like a sale. When there are sales in shopping centres, throngs of people buy more. Yet when the stock market is giving a sale, people run. Is there any logic in that?

It's time to stay calm and rational, to define your money and risk management strategy in such turbulent times.

Friday, October 30, 2009

STI Updates

An interesting break down of the 50 MA by STI today, followed by a swift recovery. It appears that we have just finished an ascending triangle correction as in yesterday's chart (updated):

I'm expecting the end of the correction based on this. In fact, I bought into Singtel today as it is a strong index component.

However, from the MFI, lower lows are still being made... This is quite worrying at the moment.

As posted earlier, triangles like the one above are usually corrective waves, and always occur in the position prior to the final actionary wave in the pattern of one larger degree, i.e. wave four of an impulse, wave B of A-B-C, or final wave X in double or triple zig-zag or combination.

Also, in the stock market, when a triangle occurs in the fourth wave position, wave five is sometimes swift and travels approximately the distance of the widest part of the triangle.

The main thing I'm unsure right now is which wave this ascending triangle is in. I'm now starting to lean towards the idea that we are still in Major A of Primary B; that means Primary B might just be halfway through.


The current wave feels like a wave 4, breathes like a wave 4, and behaves like a wave 4. The fourth waves are usually draggy, and often proves difficult to count.

It appears that wave 4 has ended right at the support line of the ascending triangle today.

Wave 5 will be beginning, or has already begun. Wave 5 personality is such that the news is almost universally bullish (USA positive GDP! Out of recession!). Bears will get severely ridiculed (think CSY in CNA forum). In addition, the fifth wave is where average investors start to buy in. Do beware. I have to admit that finally, there are quite a number of pple around me who do not practice TA, are starting to buy in, asking me if this stock is good to buy, telling me that the broker is saying this should be bought.

Some mathematics:

In the instance that we have indeed just completed a fourth wave, and taking into account the guideline that the 5th wave usually travels approximately the distance of the widest part of the triangle.

Widest part of triangle: 179.42
Likely possible end of wave 4: 2605.1
Possible final 5th wave target = 2605.1 + 179.42 = 2784.52

This coincides exactly with the 15 years resistance trendline!!!
See post here: http://wealthbuch.blogspot.com/2009/10/sti-updates-approaching-reversal-more.html

My final target remains at STI 2780 to 2790 region before any significant correction is seen.

Thursday, October 29, 2009

STI Updates

Today's price action warranted a recount of the waves. STI closed right at the 50 MA.

There appears to be 2 scenarios for STI.

The first scenario, my preferred count, is that we are in the 2nd wave of a 5th wave of larger degree:

In this first scenario, STI will be going up after reversing from 50 MA.

The second scenario is that we could still be in a mega 4th wave instead as shown in the chart:

This second scenario points to more upside for STI in a final wave 5.

Both scenarios pointed to a break on the upside. I lost $290 buying call warrants today at STI 2660, which didn't reverse upwards in time by close. In this, I learned a lesson that for me, if I'm bullish for STI, I should buy STI ETF instead as it does not have time decay. There's no leverage in the earnings, but I would lose less money and be able to keep it overnight.

At STI 2648 today, I'm expecting STI to achieve at least 2740 again. I might look into buying some stocks, or perhaps STI ETF, for the final rally. It all depends if STI will break the 50MA support with volume.

Some Portfolio Updates

October has been a volatile month. I have made quite a bit of gains, and incurred a minor loss today.

1) Sold Unit Trust (finally) with $255.30 gain. With this, I have zero Unit Trust left.

2) Bought and sold STI call warrant today with $290 loss. ========> Won't be doing this again. Loss will be taken against the 2 Unit Trust that were sold with a total profit of $300.

3) Sold half of my Macquarie International Infrastructure Fund at $0.405 due to a run up that was too fast. 16 lots left (averaged down from this sale) at $0.305. Will attempt to buy back at $0.37.

4) Bought in Berlian Laju for a trade (60 lots average $0.117)

5) Bought China Sky for trade (20 lots at $0.245)

In October, Starhub broke the 200 day MA and dropped big time. Fundamentally, the trigger could be due to the loss of BPL and ESPN exclusive broadcast rights and not being able to retail iPhone. However, I believe that Starhub will still be a good dividend counter, and I'm targetting <$1.85 to buy in (if I still have spare cash).

Capitaland broke resistance and went to $4.46. However, I did not sell it off as it came back down today to $4.15. It's likely to retest $4. Then again, my average price of $1.64 is very low, so I have zero worries.

Older stocks remaining in red are Hor Kew, LC Dev (cum dividend) and Cosco. Most others are in the green.

My portfolio paper gain at the current moment is about $7.5k, after including paper losses of $3k mainly from Cosco. This paper gain will likely drop further as the economy goes down again.

My realised gains in 2009 including dividends stand at $7.3k as well. More dividends are to be expected in Dec.

All in all, the cost of my portfolio stands at $84480, with $3k in CFD and $12218 in MMF as opportunity cash, giving me a total of $102600 excluding unrealised gains/losses. Pay day is near, and I would able to top up my MMF with new funds soon. Following that for Dec, it's AWS time, and I would be able to top up further.

I'm targeting (and hoping) to achieve $120k by the end of the year. That means $17.4k more. Not easy, not hard... Let's see how it goes...

Wednesday, October 28, 2009

Trading Loss

I was wrong with yesterday's count.... dead wrong :(

When STI was at 2660, I bought into STI Call Warrant for a quick intra-day trade. How wrong I was... With 21 lots at 0.19 and 4 lots at 0.185, I sold all at 0.18 because I did not want to keep it overnight for fear of the unknown and time decay. Inclusive of brokerage, I incurred a loss of S$290, my first realised loss. Leverage is indeed a double edged sword; it aids you when you are on the right path, but it kills you faster than anything else when you stepped on the wrong path.

It seems to me that I have made the right choice to cut loss when STI was around 2655 as the closing was 2648. If I hadn't, my paper loss would have been an extra $250. Perhaps it was fortunate I stuck to my original target stop loss and timeframe. A lesson learned.

Guess I should stick to what I'm more used to at the moment: buying (and probably trading) of high yielding dividend counters.

STI Updates

This is an intraday chart of yesterday:

It appears that the correction has completed. The main count is in this post

It looks quite possible that Minute 2, Minor 3, Int 5, Major C, Pri B has completed.

In addition, it also appears that Minuette 1 of Minute 3 has started at 4pm yesterday and possibly completed. Minuette 2 should have started and to be continued today.

If my count is correct, we should see a down in the morning, followed by Minuette 3 of Minute 3, which should bring us way past 2700.

Let's see how it goes... Wave counts are getting more and more fractured, and this is a clear indication that a 5th wave of a larger degree is in action.

Tuesday, October 27, 2009


The recent run up in Capitaland's price has boosted my portfolio greatly.

Capitaland closed exact at the middle of the Friday's white candlestick, which is $4.3... In my weak understanding of candlestick formations, one of the support would be the middle of a long white candlestick. With this understanding of candlestick supports, the next support would be around 4.12 ~ 4.13

STI Updates

Straits Times Index is getting harder and harder to understand... :(

Let's refer to the book Elliott Wave Principle: Key to Market Behaviour

In chapter 1, this paragraph is interesting:
A triangle always occur in the position prior to the final actionary wave in the pattern of one larger degree, i.e. wave four of an impulse, wave B of A-B-C, or final wave X in double or triple zig-zag or combination.
The following paragraph also presents interesting information:
In the stock market, when a triangle occurs in the fourth wave position, wave five is sometimes swift and travels approximately the distance of the widest part of the triangle.
In my earlier wave count, the fourth wave was part of an ascending triangle. The first quoted paragraph should 'prove' the count right at the moment.

The second paragraph adds on information on where the 5th wave is likely to end. The widest part of my triangle is 2700.78 - 2521.36 = 179.42. Supposed the 5th wave is the same distance, starting at 2576.84, it would be 2756.26. By trendline, 2790 is expected, which is quite close.

Earlier on, I mentioned that momentum divergences are common in 5th waves. Right now, triangles only occur in the final actionary wave. All these are telling me that my counts should be right, and that the 5th wave is indeed in action. The end might be coming soon.

However, there still likely some room for a little more upside. Based on Gann Hi-Lo Indicator, STI remains as bullish. Also, a short term morning star with confirmation (weak) was observed on STI over the last 4 days. Although Dow Jones is in the red now, STI might surprise with a green day tomorrow by close. However, this might be wrong as I didn't have the time to monitor the daily chart for counting.

Caveat emptor and good luck trading.

Monday, October 26, 2009

Macquarie International Infrastructure Fund

Macquarie International Infrastructure Fund Limited (MIIF or Fund) today announced that it has agreed to sell 71.6 per cent of its interest in Macquarie European Infrastructure Fund (MEIF) to a number of financial investors for a total cash consideration of S$131.4 million (€63.0 million) (the Divestment). MIIF acquired this interest in MEIF for S$139.5 million in July 2005 and has received proportionate distributions of S$35.3 million (€17.4 million) from this investment. The Divestment is subject to customary closing conditions.

- The Divestment is at a 105.9 per cent premium to the value of MEIF implied by MIIF’s prevailing share price.
- The Divestment will enable MIIF to realise an internal rate of return of approximately 5.5 per cent on a proportionate basis.

MIIF will use a portion of the sale proceeds to repay the drawn balance of its debt facilities of approximately S$19.0 million. The remainder of the proceeds will be retained by MIIF to provide balance sheet flexibility for the Fund. Options available to the Board include reinvestment of the proceeds, share buy-back or payment of a special dividend, if it considers such an action to be beneficial to shareholders.


I consider this a good news. The divestment is in line with MIIF's intentions to pare down it's European assets to focus on the Asian portion.

As I type this, MIIF has ballooned to near 40 cents, giving me a paper gain of almost 1.2k at the moment, more than sufficient to cover the other penny stocks.

However, there are still some who are a little more concerned about it's fundamentals. The magazine, Pulses, had a write-up in their Oct 09 issue. I shall do an overview on it when I find the time to do so.