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| Tuesday, October 23, 2007 |
| Market Commentary |
To first be able to decide your entry, you must ask yourself this question, what is your time horizon for trade/investment?
If its 2 to 3 days, then this morning was a good time to enter.
If its for weeks, (catching intermediate trends), then its still not recovering as of now.
If its for long term, maybe it doesn't matter.
What the market now might be just a rebound. Is this sustainable? I am not sure. A lot depends on the closing today, to reaffirm if yesterday was the bottom of bear run recently. While I have loaded the counters for the longer term (I'm still learning fundamentals, but judging from trading behavior, I can quite confidently say that it will go up), the timing to load for trend capturing is still not here yet. One day of rebound does not mean much and from recent experiences, we know that for the majority of the counters, prices don't just reverse its trend in one day. It will most certainly consolidate for awhile. People need time to get the big picture.
So what happens if prices rebounds strongly today (100pts)?
It will be an indication that yesterdays doji-ish candlestick is the last of selling pressure. It will be an indication to pick off the bottom. However, bottom picking is risky, and thus its not really suggested to go in at too high a price.
So what happpens if prices rebounds slightly today?
A weak increase which do not cover the gap would mean that confidence is still not here yet. If it happens, wait. Remember after hitting the bottom, prices will consolidate. So rather buy at a higher price with positive technical indicators than lower price with too many unknown factors.
So what happens if it goes down slightly?
Market is still weak an this might not be a reversal. Further evidence to wait. This result will make me make my decision much better. As there will be no dilemma.
So what happens if it goes down by quite a bit?
Same as above, I'll just wait for timing.
From the 4 options, the most tricky scenario is when it closes strongly. However, this is just a tracking on market sentiment, and there are "people" who made use of these counters to press it down, so it doesn't mean a lot actually. If you follow Elliot Waves, it is said (from forums) that we are still too early for a down trend.
But just a note on my style, I am not here to bottom pick, because I know I'm not good at it. What I want is to ride the trends. Make some money, and try not to lose much. I have always believed that trend riding is the most direct way to make money. However, I am now taking more risk in using fundamentals. It's not that its risky, but the risk of getting your money stuck when you have better investments would be a problem. Nonetheless, its still better to trade with trends with fundamental basis. At least this will have better insurance. |
posted by Nenix @ 12:07 PM   |
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| NenixDreams Fund |
| Fund launchprice on 1st August 2006= $1
Target for 2007 = Beat STI index
Current price of NDF as of 1st Oct 2007 = $1.58
Current price of STI as of 1st Oct 2007 = $1.54
Difference with STI index is 0.04
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