Thursday, July 16, 2015

Trading Made Easy - Stock Market

what goes up will come down; however & whatever efforts to artificially starved off the...

Stock markets, by extension economies, boom & bust. However, the uncanny cyclical timing of market lows is amazing. Stockmarket thrives on HOPE; the more hopeful & positive, the higher the rebound and uptrend. It measures from low to low (at every cycle).

On the other hand, commodity markets thrive on fears; the fear of shortage motivate increase demand which pushes prices higher. It measures from high to high as when fears evaporate, prices collapse

There is a peculiar quarterly (trading) cycle where prices rebound

Quarterly-Cycle - if you care to be patient, there's money to be made in a trading cycle

January - (Capricon effects)
April - (Corporate results)
July - (Mid-year portfolio reviews)
October - (Jupiter effect - typically a turbulent period)

January
April
July
October



4-Year Cycle - the 4-Year cycle reflect localize financial & debt problems. However, the magnitude may be so large that other nations may be affected. In today's context, globalisation has made everyone equally gullible.

2016 - ???
2012 - Global economic crisis @US
2008 - Global economic crisis @Euro 2007/08 (Lehman Brothers)
2004 - Post-SARS / Sub-Prime crisis
2000 - DotCom Bubble
1996 - Asian Financial crisis 1996/97
1992 - European currency crisis (Gulf War ~ Iraq/Kuwait) ~ Black Wednesday
1988 - Post-Black Monday @1987
1984 - New Zealand constitutional crisis/Philippines financial crisis/3rd World crisis
1980 - Collapsed of S&L
1976 - UK Debt crisis
1972 - Oil Crisis


10-Year Cycle - when the 10-Year cycle falls in tandem with the falling 4-Year cycle, the impact is multiplied

2017 - ???
2007 - Euro Financial Crisis 2007/08
1997 - Asia Financial Crisis
1987 - Stockmarket Crisis
1977 - Oil Crisis/UK Crisis

Forward Statement

* Everyone wants to make money but few wanna do their home work
* When even the aunties and non-learned make profits from the stockmarket, the market is due for a major correction.
* When the Press and the professional fund managers scream 'avoid/sell', it's about time to dabble
* When Government relaxes fiscal policies and liberalize the stock market, it's time to put your money in even in dull market

Conclusion

~ The world is treading into a recession and emotions are fairly negative. The next crisis is likely to be a 'currency crisis'. Military adventurism is less likely while we cannot discount a 'disease outbreak'.
~ Most stock markets are showing signs of topping up
~ While most Heads of Government know that "it is important to have a common support & rehabilitation of their economy" but different political inclination make reconciliation not quite possible.
~ With a global slowdown, coupled with weak commodity prices, deflation is the likely consequences

In the meanwhile, Happy trading on rebound & topping-up but be forewarned; the next drop may be heartbreaking and a wallet-hollowing experience.

No comments: