Week of Oct 1st, S&P500 & Dollar Index
click to enlarge
Stock Index Corner: S&P 500
Fundamental (source: CRB):
Earnings expectations were unchanged in the latest week: Q3
(+14.2%), Q4 (+13.7%), and Q1-2007 (+10.4%), according to
Thomson First Call. Annual earnings expectations are currently at
+14.7% for 2006 and +10.2% for 2007, which would follow 3 consecutive
years of double-digit earnings growth (2005 +13.7%, 2004
+20.2%, 2003 +18.4%, vs 2-decade avg of +7.5%). The S&P 500
forward P/E (based on forward-looking earnings) is currently at
15.36 which is just moderately above the recent 11-year low of
14.27 posted in mid-June and keeps the stock market in a reasonable
valuation light.
FOMC expectations—For the first time in this cycle, the market
has completely erased expectations for any further tightening and is
now only discounting rate cuts going forward. The market is discounting
no chance of a rate cut at the next FOMC meeting on Oct
24, but the market is discounting a 34% chance of a 25 bp rate cut
by Jan-2007 and a 100% chance of a rate cut by June-07. The market
is discounting a 78% chance for a further 25 bp cut by Aug-07.
Technical:
S&P500 has outperformed all major indexes (Nikkei, FTSE, ASX) for the past 2-3 months and made a new 5 yrs high last week. The bullish momentum is strong. However, on daily timeframe, a corrective move is expected in the next few days to reach 1332 support and if broken, potential next support at 1320. Next resistance at 1369 (Dec futures).
S&P500:
Big Picture: (monthly): Bullish
Medium term (weekly): Sideways to Bullish
Short term (daily): Possible move to the down side
Major World Indexes - Weekly MACD Histogram: FTSE, Nikkei, ASX - UP (Bullish)
Commodities Corner: US Dollar Index
Fundamental (source: CRB):
The dollar index temporarily fell but then rallied back on the improved
US economic data seen in the Sep US consumer credit report
and Aug new home sales report. Bullish factors for the dollar
continue to include the rally in the US stock market to a new 5-year
high (which attracts capital to the US), signs of some improvement
in the US economic data from the drop in gasoline prices and mortgage
rates, and the fact that US interest rates remain well above
overseas rates, even though US rates are now pointing downward
while foreign rates are pointing upward. The market is fully expecting
a 25 bp rate hike to 3.25% from the ECB on Oct 5 and a
further 25 bp rate hike to 3.50% in December. Meanwhile, there is
about a 50-50 chance for a BOJ rate hike to 0.50% by year-end.
Technical:
The USD Index has moved sideways for the past five months between 84 and 86.
It may continue to do so in the next few weeks.
Trading ideas : (please apply your profit/ risk management rules in all trades, please note except options writing, all the other trades may last just several days)
Writing Options: US Dollar Index OTM Puts
Futures: Short Dec Cotton
Options: ADBE (long puts), QCOM (long outs)
posted by "Frank" at Saturday, September 30, 2006
20 Comments:
Can you help me ... recoup my Hard earn money? & plz call me 98551152
When I first saw the title "He quits well-paying job to invest full time" in the newspaper column today, my eyes just lit up. You see, I've been wondering if it is possible for someone to do just that and be able to support the family like he would if he had a full time job.
I'm 32 yrs old this year. I don't have a 5-figure salary :) but do have some seed money. My goal is to eventually have a sustainable income without holding on to a salaried job.
Having worked in the electronics industry for the past 8 years, I guess I just feel a sense of tiredness having to cope with the ever-changing landscape of the industry.
To cut to the chase, I always think hindsight is the best and your 15 years of experience is a good amount of retrospective insight.
I'll like to know :
- how much of work/life flexibility you have? (I feel family time is important)
- what is reasonable % of return to aim for per annum?
- how many years of part-time investing before I can consider full-time?
- what are the foundation blocks needed? do you recommend MBA?
I currently invest lightly, mostly in Msian equities and my company stock purchases. I specialize in airline stocks and do read up on prospectuses for any IPO. The returns have been encouraging but feel that I may not have what it takes to go at it on a bigger scale.
Appreciate any comments if you have the time. Thank you in advance and a heartfelt congratulations on getting to where you are today.(emerald_hijau@yahoo.com.sg)
Hi I read about you in the newspapers and would like to know how to get started on investing. Are there some books that can teach me the very basics? Pls email me at chriswzk@singnet.com.sg. Hope to hear from you soon.
rgds,
Junjie
Hello Frank,
I am interested to learn from you. Pls guide me.
Mike
mike_ngkh@hotmail.com
90618790
Hi Frank! like the other readers, I was led here by today's Sunday Times article. I've started investing not long ago and have recently started my blog on the topic, to share my thoughts and experience million dollars dream Do drop by and give me your comments!
I think your blog is really very professional and comprehensive in the area of commodities trading. But with so much jargon, I really can't make head or tails of what you are writing! But I'm sure many others will find the info you give to be very insightful and useful.
All the best in your journey!
Hello Frank, Congratulations on achieving what most people could only dream of. I am also a fan of Robert Kiyosaki and have read most of his books. I am confused by the tons of technical jargon. How does a novice like me ever get started in what can be a minefield to the uninitiated. Whi do I contact to even just start a trading account for commodities?
Please advise. Many thanks.
Hello Frank, Congratulations on achieving what most people could only dream of. I am also a fan of Robert Kiyosaki and have read most of his books. I am confused by the tons of technical jargon. How does a novice like me ever get started in what can be a minefield to the uninitiated. Whi do I contact to even just start a trading account for commodities?
Please advise. Many thanks.
do you have any intention to conduct any course? pls email me @
ippemail@hotmail.com
Hi Francis,
congratulation for your achievement. I am just passed 50 years old and having a full time job, the globalisation had made me feel insecured as my job my be replaced by the younger generation very soon. I am planning to go into full time commodity trading and need some guidance from you on how to start, the capital required and risk involved. You can contact me at my personal E-mail : gici@starhub.net.sg
Best Regard,
Jim
Congrats! You made it, but just curious, in % term per yr, what is your track record over the past 15 yrs?
The paper says you can make 6-8% per mth, which means close to 100% in one year. If you have made 100% return per yr for 15 yrs, you should be in Guinness Book of Record.
It's kind of personal info, will respect your decision if you choose not to disclose. Thanks!
I am more of a value investing guy, my blog at
http://8percentpa.blogspot.com
Hi Frank,reading your article lights up my sunday morning, very inspiring & motivational.Is there a way we can meet you to learn more of your successful investing methods.
My email: raywks@singnet.com.sg
Appreciate your soonest reply.
rgds
ray
Hi Frank,
Read your article and just like u, am a chartist.
Sharing some thoughts with you:
Happened to do a comparison between STI and DJIA today:
STI:
Fibonacci Retacement for STI points to a 1st lvl resistance at 2480 lvl, whilist if present uptrend is broken, predict support lvl would be at 2530. Currently STI is already trading at the Upper Bollinger Band and RSI has passed the 73 lvl. MACD does not have a clear signal, though the MACD line is deviating from the signal line.
DJIA:
STI exhibit a high correlation to DJIA, with both having their lows on the 17th July and the 14th June, high on the 8-10 May. DJIA has been gaining ground since early Aug and a much anticaipated correction might surface. Just like STI, it is trading on the upper Bollinger Band and Fibonacci Retracement shows a correction parked at 11380. For DJIA however, RSI has hit the resistance at lvl 73 and heading downards, which i believe could bring further downside.
However, the general economy of the US has been reversed from fighting inflation to now expecting the FOMC to cut its rates. Next FOMC meeting on the 24th Oct, which i still believe that cuts to the rates would not be impplemented yet. Oil has cooled down trading at USD63, with upside of up to USD 68 if the resistance at USD 64 is broken. However, no immediate fears of oil shortages or imminent fear of oil disruption is expected, which hence might slow the correction of the DJIA and in turn the STI.
What do you think? A put warrant on STI might be a good choice but proper risk management has to be in place.
Drop me a mail at sngchenghui@gmail.com for a further discussion.
Thanks
Hi Francis,
Congratulations in achieveing your dream career ! Doing what you love and does best. You finally GO FOR IT...your hobby as your career. That's simply great! Do keep in touch. With all the best wishes...... KY Tan.
Hi Francis. Read from ST on your recent solo career. We did the same MBA course back in 96/97. I caught a few rides in your car back travelling from west to east. Just want to say thanks and happy to see you progressing well. Cheers!
Hi Frank,
Firstly, congrats on your achievement. I must say you will be a role model from now on for all would be traders in sg!
Like most of us here, I'm here to seek your advice on how to be a commodities trader. I was a physical commodities trader for a while and am looking to do the switch to index trading. Appreciate therefore if you could advise me how to get started on this....i.e. should i go for a course? if so, which one would you recommend? and will you be conducting any courses in future?
Pls can I have your professional advice on the above. Appreciate your time and looking forward to hearing from you.
You can reach me at seanlsf@hotmail.com, thanks!
Hi,
I would like to learn from you.Please email me at
faizal74@singnet.com.sg
dear all fellow investors, i am really sorry if i could not reply you directly as i was "swarmed" with the wishes and desire to learn...
what i do is really no special execpt putting together a strategy that gives me high probability of returns consistentlly and lower risks...i only aim for 6-8% a month on my capital..to some people this is too small and to some, this is huge...
for those wishing to learn how i trade on commodities successfully is, most of portfolio is based on a strategy named as Selling Options on commodities. Relatively new to many especially singaporean investors...
if u wish to learn more, do attend my previews of the seminar scheduled next Wed...
email to contact@eminent-capital.com to request for more info...
thanks again to all, i wish u luck in yr investment journey !
best regards
frank
Hi, I understood from the newspaper article that you don't trade stocks:
"I realise that if you invest mainly in stocks, if the market dives, your stocks will dive too. I discovered that the movements of commodities such as corn, sugar, wheat and gold don't correlate with the stock market."
Sorry I haven't had the chance to peruse your blog, but may I know if you actually trade call/put options?
hi frank, my name is jon.
i am just 22 years old and learning to trade...
heard that you got a preview coming on, i am interested, care to email me at jonathanlcl@yahoo.com.sg?
you mentioned selling options right? that means you hold a particular stock and sell the options, but i do not have substancial capital to even invest in a high yield stock ... o man, how do i sell options??? pls help.
Hi! Frank,
Just would like to seek some help from you. I am totally know nothing about share,stock or option at all. How to start from zero? you can email to kitcad@hotmail.com.
Thanks,
alex
Post a Comment
<< Home