Archive through March 12, 2007
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     holycow
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Username: holycow
Post Number: 2773
Registered: 08-2004
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Votes: 0
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| | Friday, March 09, 2007 - 08:20 am: | 
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It's interesting to read others talking about making money from the stock market. It seems most people agree that psychology, money management are keys to their success and analysis is not that important... how so?
1) Psychology - it's a generic and vague word in this context. Just what the heck psychology mean in TA? Is it the study of market participants "mental state" or your own state of mind or my dog's - why is it barking every time the rubbish truck turns up? I mean just what is psychology meant and why is it important?
... to me, it means just this - my mental preparedness in reacting and responding to market movement... if the market moves up, you do this, if it moves down you do that, if it does nothing, you do nothing, etc.
... and it again ties back to your characteristics - whether you are a risk taker a type A kind of fella, or a type B kind of fella or your age, etc. For example, if you are the type that talk fast, move fast and act fast, chances are you will find short term, quick short profit taking, finger/trigger happy kind of trading suits you quite well. On the other hand if you like to drive Benz in the slow lane cruising at the max allowable speed, then, you may want to take to the medium or longer term invest trade kind of approach. It's horses for courses.
The key psychological thing here is - you have got to be happy with your trade, with the income/profit you are making and with your lifestyle, ie, you still have time for the family.
2) BUT, here is the BUT question - how do prepare yourself psychologically? How can you reach a state of being mentally prepared? Jogging? Cooking? Eating?... not sure about others, but, But, BUT... for me, it's ANALYSIS! Or ANALYSES!
Without careful analyses I doubt if people can be that prepared! In fact I would go as far as saying this - your anal is as important as your head - you can trade profitably without good analyes of your trade/market/stock, but I doubt if you can make big money trading/investing without good analyses. No one would bet big money if they are not comfortable with the risk they are taking, and that risk assessment, can't be done without any good and decent analyses.
So, here it is again - small money, small profit, small bet short term turnaround - yes, you can do without analysis. But if you want bigger/more money, trading/investing medium to longer term (wealth acquisition/accumulation) - you better do your homework or you won't be able to last the distance of holding on and riding the trend all the way.
Of course, I won't argue against the gamblers and the lucky traders here. Some people are born lucky... but I have ruled meself out as the biggest winning I ever got from Tatts is about 15 bucks years ago.
3) Money management? I really don't quite know what is the rocket science involved in this discipline... since I don't know, I'd simply treat it as cutloss point, profit protection move, stop loss level, etc... strangely I can't do any of these thingy/moves/dance/act without analyses.
I think I am the weird one here...
HC
"... I believe in Santa!"
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holycow
Member
Username: holycow
Post Number: 2774
Registered: 08-2004
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Votes: 0
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| | Friday, March 09, 2007 - 09:10 am: |
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World Indices
1) The world has turned green last night... except ASX and Egypt - now is there a conspiracy here somewhere? 
2) Here's a bit of reminder for moi and everyone - if you hold a certain opinion of how this world should be and should act a few days ago, just be aware of this mind thing or cognitive bias we all show from time to time - once we are entrenched in a position, we tend to seek out info/people that agree with our position, this "fortification" action is human's built in survival instinct - great for the jungle but not really that good for the stock market.
... what I am saying is this - give yourself some room that you may be wrong, and that you are still capable of turning around and seeing thing from your opposition's point of view. Remaining objective and focussed, I guess is the key to success in this period of uncertainty.
Personally I have a couple of gauges to measure my own "position" - one of them is the weekly NASD comp, which I believe is shown in a chart I have posted - I firmly believe we need to see a weekly white candle to "nullify" the down swing threat within the channel. The other is I like to see a series of continuous white candles in XJO as more convincing sign that "recovery" is on its way and is doable.
... what I am saying is this actually - check against your personal yardstick in your chart so you won't be blinded by the "fog" of war coming from the market, from your opposition, or worse, from yourself because of your eagerness to "prove" your point.
HC
"... I believe in Santa!"
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holycow
Member
Username: holycow
Post Number: 2775
Registered: 08-2004
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Votes: 0
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| | Friday, March 09, 2007 - 09:13 am: |
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yo,... missed saying this - NZ has raised rate, ECB has raised rate. Aussie did nothing... coz time is still good, but can you rule out the rate question in the next rate review?
HC
"... I believe in Santa!"
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dug
Member
Username: dug
Post Number: 2313
Registered: 07-2005
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Votes: 0
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| | Friday, March 09, 2007 - 10:00 am: |
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HC,
So rounding tops are some Long Term pattern only,hey?
What if I did three days of 5minute ticks and it showed "rounding"?
Are there other patterns one should dismiss doing Short Term? All the "Books" on TA seem mostly directed at Gun Day Traders in FX etc.Never noticed this "Hiving Off" of standard patterns into "Oh this one only forms over Weeks,Ignore it short term" but I ain't read all that many books so coulda missed that.
Do you go to weekly when say 9 days are staring at you in formation and say to yaself the Weekly don't show this,give d'idea d'Chop?
We're back to you got an opinion,I got an argument!
cheers,
jr
You know you're in a Hick place,
when there's nowhere you can Go,
that you shouldn't!
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holycow
Member
Username: holycow
Post Number: 2776
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Friday, March 09, 2007 - 10:41 am: |
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STO Daily
Dug,
I think TA and charting is very much a matter of experience and judgement, can be quite personal and there's no hard and fast rule.
The general definition of a rounding top and bottom usually involves a bit of volume, ie, the volume within the rounding period is showing a similar rounding shape, reflecting the investor's buying/selling supply/demand intention and the market forces involves and reaching a balance/imbalance structure.
I agree with this definition. For short term observation, say intraday chart, I tend to find them to be unreliable. Betting on them is akin to gambling from my angle, you are better off looking for a strong trending stock and watch your "money management aka cutloss/proft stop" move.
The rounding nature of a pattern reflects the current bull's mentality quite well, ie, they find it hard to let go... but as the market is topping and begin to turn down, bit by bit their confidence to hold on is being slowly eroded, and hence you see the rounding pattern. Once the rounding has become pronounced and is visible by everyone, you'd see an acceleration in selling since by that time everyone is "seeing" it and is making the same move - getting out. Hence rounding top and bottom is more of a reflection of a topping and/or a bottom market.
In other words, rounding tops and bottoms are more dependable and can be traded with greater accuracy at long term market top or bottom instead of intermediate or short term top/bottom.
Cheers.
ps: STO is a good example, if you check out my take on this stock, it was quite some times back where I was looking at it with a H&S slant.
HC
"... I believe in Santa!"
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holycow
Member
Username: holycow
Post Number: 2777
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Friday, March 09, 2007 - 11:04 am: |
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Here is one way to measure and judge ASX, at open, it's performance you can attribute to the influence of the US market last night. But after the first 40 mins I think you can sort of tell yourself that the US influence is more or less over.
If the local market is rallying on its own merits, ie, through its strong fundamentals, or through the strength of commodity pricing, then, you should expect it shows a consistent performance through out the day. That is, no sudden swing up or down.
... now try this - watch how ASX reacts to the Asian markets. Just observe and tell me what do you see. Let's say ASX were to be "observing" the Asian market (BIG assumption here), esp the Japanese and the Chinese market, here's a question- what does it mean?
Does it mean ASX is running on Asian market sentiment?
Does it mean ASX is lacking its own internal strength?
HC
"... I believe in Santa!"
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dug
Member
Username: dug
Post Number: 2315
Registered: 07-2005
Rating: N/A
Votes: 0
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| | Friday, March 09, 2007 - 12:10 pm: |
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I agree that it boils down to personal beliefs that one acts on,but I differ on your point,HC,about it activates/confirms/happens when ALL see it.
Frankly I don't think TA is used all that much by Institutions/Brokers etc.I think there is only that Regina Meani shiela actually in the Belly of the Beast doing TA from Long Term perspective for d'BigBoys;other TA exponents are mainly only doing the Day/Derivatives bit.
Anyhow,don't want to go into d'Defensive Position.
How about giving us the Opening Times for China,Japan,India Market so I've got a Time point to check this "wave" of inter-relation by?
You can do it by your Time,Southerner.I'll convert it to REAL TIME!!
cheers,
jr
You know you're in a Hick place,
when there's nowhere you can Go,
that you shouldn't!
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holycow
Member
Username: holycow
Post Number: 2779
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Friday, March 09, 2007 - 12:32 pm: |
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Dug,
http://au.finance.yahoo.com/intlindices
Have fun.
ps: have to say this - the Asian markets are quite different from ASX and NYSE. The Asians don't see stocks as a means to invest, they see the stock exchange as a big casino. It's all about momentum play and mindless money chasing activities over there. So any western explanation and rationalisation most times - MISSED the MARK! Believe what you read in OZ and in the western media 50% only and then discount it by another 50%... coz many have no idea!
I can give you an example, first hand - I have one stock in one of the Asian market (don't ask which, ok?) - I bought at 16, it went to 25 within a month or two and then 32 in the following month... in 4 months I think it went up to a high of about 41+, within one week it drops back to 31 and now trading at around 35.
All these times I have no idea (actually some) what's going on! But this is a good problem to have. The good thing about the situation is when they are hot, they are HOT! The only trouble is, the "hotness" in the market is like a cow's hot air, it goes off really quick once it's released!
So will the Asian markets as a whole wilt like the flowers in my garden now that we are into stage 4 water control? You can draw your own conclusion here... it's just a matter of time!
... the only exception I think is the Japanese market as it is probably the biggest (big=hard to manipulate), the most stable and the more regulated one in the region. Next is HongKong. The rest?
pps: I think Japan is 2 hrs behind us. The rest are 3 hours while SSE/HSI is 4 hours (I think). Frankly I don't pay much attention, may be someone can correct me here.
HC
"... I believe in Santa!"
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holycow
Member
Username: holycow
Post Number: 2780
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Friday, March 09, 2007 - 04:55 pm: |
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XJO Daily
XJO Intraday
1) much as they tried, the 50% fortress seems unbreakable... with bulk of the sizable divy going ex today, there will be less reason for investors to hold on their shares next week. I am sure we will get some kind of resolution by then. There is a good chance for 5650 to be re-tested, let's wait.
2) looking at the intraday chart, there seem to be some kind of pump and dump action, am I reading too much into this chart?
AORD-SSE
1) do you reckon AORD was reacting to SSE's decline?
HC
"... I believe in Santa!"
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dug
Member
Username: dug
Post Number: 2318
Registered: 07-2005
Rating: N/A
Votes: 0
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| | Friday, March 09, 2007 - 06:12 pm: |
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d'End of d'Matter.I win!!
we should do some bear indications/patterns,HC while we await d'Resolution.Not here in this thread,HC.Are ya game to venture beyond boundaries of ya Paddock?
There's this theory at IC that patterns come in clusters.Like each pattern is more identifiable and likely to perform d'Portend if such pattern occurs over a range of shares at the same TIME.
HC,no lesser Light than ARCHER,backs this as d'Angle.
Now there's been a set of bear flags/upwedges on show lately.Even Msparks woulda a seen them,HC,cos his kinda shares BOL 'n' SHV did a duo of it just awhile back.The bonus for d'CONisewer was it did GTP as well,which confirmed the inter-relation of ,well,"Stuff".
Anyhow,HC want to contribute to a"What's Happening to Pattern?"kinda thread?
You start it,HC cos well,ya lost,right? dat chart above defeats ya!!
and we're looking for more obscure ones than damned Head'n'Shoulders!!
regards,
jr
You know you're in a Hick place,
when there's nowhere you can Go,
that you shouldn't!
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holycow
Member
Username: holycow
Post Number: 2786
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Saturday, March 10, 2007 - 06:42 pm: |
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NASD COMP Weekly
1) the latest weekly candle indicates there's a lack of serious follow up selling in NASDAQ, but because the rebounce was so weak and the recovery so anaemic that it is also indicating there was a lack of bullish conviction over there (if you were to compare to ASX). So, I am concluding the outcome at this stage to be inconclusive and probably it's wise to give it another week to see if the index will breakdown further.
Holding a bearish bias at this stage, I am making the assumption that the index will fall further. This is because the rebounce was unable to raise the candle back up above the short term MA (far from it) - this I believe is quite a clear sign of weakness if you were to compare with the past instances where a strong rebounce (a long white candle) would take the price back above the MA and nullified the threat.
HC
"... I believe in Santa!"
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holycow
Member
Username: holycow
Post Number: 2787
Registered: 08-2004
Rating: N/A
Votes: 0
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| | Sunday, March 11, 2007 - 11:05 am: |
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Crisis Looms in Mortgages
...“The regulators are trying to figure out how to work around it, but the Hill is going to be in for one big surprise,” said Josh Rosner, a managing director at Graham-Fisher & Company, an independent investment research firm in New York, and an expert on mortgage securities. “This is far more dramatic than what led to Sarbanes-Oxley,” he added, referring to the legislation that followed the WorldCom and Enron scandals, “both in conflicts and in terms of absolute economic impact.”...
“I think there is no doubt that home sales are going to be weaker than most anybody who was forecasting the market just two months ago thought. For those areas where the housing market was already not too great, where inventories were at historically high levels and it finally looked like things were stabilizing, this is going to be unpleasant.”
Like worms that surface after a torrential rain, revelations that emerge when an asset bubble bursts are often unattractive, involving dubious industry practices and even fraud. In the coming weeks, some mortgage market participants predict, investors will learn not only how lax real estate lending standards became, but also how hard to value these opaque securities are and how easy their values are to prop up.
Owners of mortgage securities that have been pooled, for example, do not have to reflect the prevailing market prices of those securities each day, as stockholders do. Only when a security is downgraded by a rating agency do investors have to mark their holdings to the market value. As a result, traders say, many investors are reporting the values of their holdings at inflated prices.
“How these things are valued for portfolio purposes is exposed to management judgment, which is potentially arbitrary,” Mr. Rosner said...
...The rapid rise in the amount borrowed against a property’s value shows how willing lenders were to stretch. In 2000, according to Banc of America Securities, the average loan to a subprime lender was 48 percent of the value of the underlying property. By 2006, that figure reached 82 percent.
...The issuance of mortgage-related securities, which include those backed by home-equity loans, peaked in 2003 at more than $3 trillion, according to data from the Bond Market Association. Last year’s issuance, reflecting a slowdown in home price appreciation, was $1.93 trillion, a slight decline from 2005.
...As prevailing interest rates remained low over the last several years, the appetite for these securities only rose. In the ever-present search for high yields, buyers clamored for securities that contained subprime mortgages, which carry interest rates that are typically one to two percentage points higher than traditional loans. Mortgage securities participants say increasingly lax lending standards in these loans became almost an invitation to commit mortgage fraud. It is too early to tell how significant a role mortgage fraud played in the rocketing delinquency rates — 12.6 percent among subprime borrowers. Delinquency rates among a | | |
