Colin's Trading Diary

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hershy

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Post Number: 1888
Registered: 10-2002

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Votes: 0


Tuesday, January 23, 2007 - 08:00 pm:

Hello Colin,
I feel I must rebut one of the points you are making in the current diary.
You say:

I would say that a breakout above 4650 would be overbought.

I don't have a plan so nothing can go wrong !!!

http://members.optusnet.com.au/~hershy/

captain_chaza

Member

Post Number: 2351
Registered: 02-2003

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Votes: 0


Tuesday, January 23, 2007 - 08:25 pm:

Ahoy SCO Hershy

Could you please support your argument with Charts
Otherwise it is just a lot of Palaver!

Salute and Gods'Speed

Capn

"While we stop and think, we often miss our opportunity." Publilius Syrus, 1st century B.C.

"I believe the future is only the past again, entered through another gate."
Sir Arthur Wing Pinero 1893

"There are two times in a man's life when he should not speculate: When he can't afford it, and when he can." Mark Twain, 1897

hershy

Member

Post Number: 1889
Registered: 10-2002

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Votes: 0


Tuesday, January 23, 2007 - 08:31 pm:

Der................

Pretty long axis to reach all the way to 4650 don't you think ?
$650 no worries but 4650 ?

I don't have a plan so nothing can go wrong !!!

http://members.optusnet.com.au/~hershy/

colin_twiggs

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Post Number: 2766
Registered: 09-2002

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Votes: 0


Wednesday, January 24, 2007 - 11:35 am:

Hershy,

Thanks for pointing out the typo.

Regards,
Colin

fibonacci

Member

Post Number: 190
Registered: 10-2003

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Votes: 0


Saturday, June 02, 2007 - 09:20 pm:

Colin,
Please explain....Re XAO from tonight's diary.

"Normally a continuation signal, the current rectangle has roughly an even chance of breaking out in either direction."

i.e. Why doesn't this pattern continue to suggest continuation as a favoured option?

John

You've got to
know when to hold 'em
know when to fold 'em.

colin_twiggs

Member

Post Number: 2904
Registered: 09-2002

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Votes: 0


Monday, June 04, 2007 - 11:45 am:

John,

"Having reached its target of 6350 (6000+[6000-5650]), the All Ordinaries consolidated in a narrow band for several weeks. Normally a continuation signal, the current rectangle has roughly an even chance of breaking out in either direction. Twiggs Money Flow (21-day) displays a large bearish divergence, warning of significant profit-taking, with stocks changing from strong hands to weak hands."

When evaluating patterns, we should always consider:
1. support and/or resistance;
2. activity levels (volume); and
3. targets (the position in the trend channel or stage in the current cycle).

For example, I would be a lot more wary of a double top in stage 3 of the primary cycle, compared to in stage 1 or 2.

Regards,
Colin

maxima

Member

Post Number: 23
Registered: 11-2002

Rating:
Votes: 1


Saturday, March 15, 2008 - 06:57 pm:

I would just like to publicly acknowledge the fabulous help that the trading diary has been for me over the past few months. And no, I don't rely on the diary (or anyone else's tips/opinion) to make my decisions as I have my own system but it is a discretionary system and the usual human emotions arise and cause problems.

The benefit has been that the diary has tended to confirm my own analysis and given me the extra confidence to implement trades very profitably in this difficult time.

Colin was warning of this bear market well before other commentators that I know and making very helpful suggestions as well as providing very useful analysis....and his gold analysis and forecasts has been uncanny. (to wit, last night and us$1,000)

I will shortly be flying off to China and Europe for about 3 months of holidays (using recent profits) and it seemed appropriate that thanks and credit be given to COLIN for his significant contribution to this happy outcome.

I have been a premium member for some time and intend to continue indefinitely for a whole host of reasons including a method of saying thanks and giving something back to someone who has been very financially rewarding for me.

Cheers, Max.

colin_twiggs

Member

Post Number: 3133
Registered: 09-2002

Rating: N/A
Votes: 0


Monday, March 17, 2008 - 12:52 pm:

Thank you Max,

Enjoy the trip and send us a postcard.

Regards,
Colin

resillent1

Member

Post Number: 564
Registered: 10-2006

Rating: N/A
Votes: 0


Monday, September 01, 2008 - 12:11 pm:

G'day Colin

In a recent Trading Diary you were discussing the possible reasons for the out performance of small caps.

"Small Caps
The Russell 2000 Small Caps index are out-performing the large cap Russell 1000. I repeat the three possible reasons mentioned last week:

institutional holdings and margin trading are concentrated in large cap stocks leaving small caps relatively untouched by the liquidity crisis;
short sales are concentrated in larger cap stocks; and
falling energy stocks have greater representation in the Russell 1000."

Attached is an interesting article on the topic. It argues that the financial institutions involved in the makeup of the market affect asset pricing – Their finding is that the domination of Mutual Funds between 1980-2000 led to an out performance of large caps, whilst the rise of Hedge funds this decade is resulting in an out performance by small caps.

http://www.leggmasoncapmgmt.com/pdf/SociologyofMarkets.pdf

colin_twiggs

Member

Post Number: 3234
Registered: 09-2002

Rating: N/A
Votes: 0


Monday, September 01, 2008 - 01:14 pm:

Resillent,

Thank you for the interesting article.

If hedge funds are over-weight in small cap stocks, would the credit squeeze not make them net sellers, driving down the price of small caps?

Regards,
Colin

resillent1

Member

Post Number: 642
Registered: 10-2006

Rating: N/A
Votes: 0


Thursday, November 27, 2008 - 11:55 am:

Colin

Your last trading diary had a link to a 2004 paper written by Nouriel Roubini and Brad Setser.

In 2007 Brad Setser on his blog posted the following:

We were wrong. "As the following chart – taken from the latest BEA data on the net international investment position – shows, the US net international investment position has actually improved since the end of 2004. Look at the red line. It has come back toward $2,000b ($2 trillion) since 2004, not gotten bigger -- even though ongoing financial flows continue to add new liabilities to the United States external balance sheet (the blue line)"

Despite things not unfolding as the paper predicted to date - His thinking has not materially changed.

"Heaven forbid that any changes or adjustments work against the US. For what it is worth, I still think the US NIIP will eventually deteriorate."

colin_twiggs

Member

Post Number: 3275
Registered: 09-2002

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Votes: 0


Thursday, November 27, 2008 - 02:43 pm:

Resillent,
Quite right. US NIIP has improved since 2004, partly due to the weakening dollar increasing the USD value of foreign investments. Recent (2008) strengthening of the dollar will reduce their values.

Their analysis of the current account deficit and its impact on manufacturing exports, however, was brilliant.

NIIP is a moving target because of fluctuating exchange rates and understatement of intangible (brands and know-how) investment. It is also not particularly helpful to compare income on external assets to servicing costs of external liabilities, especially in the current market. Low Treasury yields and cyclically low investment returns will distort the long-term picture. It would be best to compare net external debt and net external (equity) investments separately.

Regards,
Colin

resillent1

Member

Post Number: 644
Registered: 10-2006

Rating: N/A
Votes: 0


Thursday, November 27, 2008 - 03:47 pm:

Collin

Yes it is a very good paper.

Along similar lines this paper is a comparison between the foreign liability dynamics of Australia and the United.

May be of interest to you.

http://www.treasury.gov.au/documents/1329/PDF/06_Comparing_the_net_foreign_liabi lity_dynamics_of_Australia_and_the_United_States.pdf

Cheers

hailoh

Member

Post Number: 315
Registered: 04-2003

Rating: N/A
Votes: 0


Sunday, January 24, 2010 - 10:00 am:

Colin,

An editorial in the most recent Economist comments "--- unlike Japan in the 1980's, China is a poor country in the early stages of its development. Its high investment to GDP ratio is often flagged as evidence of overinvestment, yet its capital stock per person is only 5% of America's or Japan's."

Seeing China being referred to as "poor" comes with a jolt. It is tempting to analyse the conflicting views by considering China as a duopoly, comprising a large and sophisticated urban mass and a very large but unsophisticated rural mass, and of these, the urban component is the driver of economic forces with global interaction.

This approach runs the danger of manipulating statistics to fit the argument - look no further than the climate debate to see this in action in Australia and elsewhere.

Enough to say that one set of stark statistics may cloud the argument rather than illuminate it.

colin_twiggs

Moderator

Post Number: 413
Registered: 06-2009

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Votes: 0


Monday, January 25, 2010 - 09:54 am:

Hailoh,

I agree that China is still a relatively poor country but that is changing at an alarming pace. They seem to be making the same mistakes that Japan made:

easy money policies allow a massive speculative bubble in real estate and stocks in the 1980s;
further quantitative easing in the 1990s after the bubble burst, accompanied by massive stimulus programs funded by public debt, in an attempt to save the banking system;
now they face a staggering debt/GDP ratio that threatens to cripple the economy.

China is entering stage 2: using up savings to fund stimulus programs and aggressive QE to stimulate domestic consumption. That is unlikely to sustain growth and rising inflation will force contraction of the money supply -- else face hyper-inflation. Continued attempts to stimulate the economy would set them on the same path as Japan.

The US is also in stage 2 but in a far more serious condition because of the rapid growth in public debt. If they do not take action now, they will become Japan 2, precipitating an even greater global crisis.

Rich or poor, all nations need to respect certain norms: debt to GDP, debt growth/GDP growth, etc. Attempts to re-write the rule book, as Japan tried, are likely to end badly.

ingot54

Member

Post Number: 2187
Registered: 05-2004

Rating: N/A
Votes: 0


Monday, January 25, 2010 - 04:32 pm:

What happened in China is an example of what may happen in N Korea, when KJI finally passes the baton.

Here we have the irresistible force of world-wide capitalism blowing the Chinese Communist ideal out of the water.

Put that irresistible force against the doors of the NK economic vacuum, and you have another recipe for explosive growth.

Not "if" ... "when".

Who would have predicted the China Syndrome year 2010 AD in 1976?

Mao Tse-tung (Zedong) died in Peking on September 9, 1976.

... after Mao's death in 1976, China adopted an incremental reform path ("touching stones to cross a river"). Many observers considered the programme to be poorly designed. China's economy seemed to have been led to an unsatisfactory 'half-way house' which was neither capitalism nor socialism, an institutional framework which perpetuated bureaucratic interference in the economy and ought, therefore, to have produced poor results.

http://cpe.oxfordjournals.org/cgi/pdf_extract/12/1/71

I am not widely read on this, but the case of China's entry into global economics is certainly an extremely interesting event - regardless of personal views in any discipline.

http://www.newsweek.com/id/214993

China

(Message edited by Ingot54 on January 25, 2010)

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