This was the email article that I wrote on 22nd January 2010, that I forgot to publish on my blog, but am now doing so, for record keeping purposes.
Pursuant to my Global Macro Economic Outlook via email dated 4th January 2010, entitled "Singapore's Economy shrinks 6.8%", where I was of the opinion that we should get out of the stock market at between 10,500 to 11,000, yesterday night, is the first US market day, where the Dow has broken below its SMA50, and more importantly, CLOSED below it. This is my Alarm system from a Technical Perspective that shouts, "GET OUT NOW!", if you are still not out.
Pursuant to my Global Macro Economic Outlook via email dated 4th January 2010, entitled "Singapore's Economy shrinks 6.8%", where I was of the opinion that we should get out of the stock market at between 10,500 to 11,000, yesterday night, is the first US market day, where the Dow has broken below its SMA50, and more importantly, CLOSED below it. This is my Alarm system from a Technical Perspective that shouts, "GET OUT NOW!", if you are still not out.
Please note that it is not time yet to Short. There is a difference between getting out of a Long Exposure because it is too high a risk, and too low a reward to continue taking on the exposure, and it is another to take on a fresh exposure on the other side of the fence. Why? Because dying bulls always have last gasps of strength that tends to weed out the weakholders.
For once, the Technical Outlook is in sync with my Global Macro Outllook. Remember, we are playing a probability game based on statistics, and thus, the market may go up once more, breaching above the SMA50, should there suddenly be positive news announced tonight or tomorrow. But, what is clear is that more and more people are getting out for sure, based on technical chart.
Whether this is merely a short term correction, or the start of a new long term downtrend is unclear, which is why this is not the time to take a Short Position yet. What you are doing here, is to buy insurance, just in case the price collapses all the way to the SMA200. If the market moves up above the SMA50 once more and stays up, you may re-enter your Long Position at slightly higher price, and at the some losses on transaction costs. This is your insurance cost for doing the trading business.
I can't share my entire trading system with you because it took me two years of scientific research to develop it. But I want to protect my friends where possible. For me, I will NEVER keep a Long Position open when price is below SMA50. This is how I protect myself from ever being hurt in any stock market crash, based on studying Dow price movements over a period of 80 years. I hope it will serve you equally well.
Please note that as any quantitative systematic trading system based on historical backtesting is founded on statistical probability, there is no such thing as a sure thing. The question is not whether I am right or wrong, but whether over thousands of trades, over many years, we will make money, or lose money. And for me, I put my money where I know for sure, that had I done it in the past, I would have made money. Mathematical Probability is in my favor, just as the rules of the casino is always mathematically in the favor of the casino.
This, my friends, is how the technical traders and technical trading strategy hedge funds make money. Of course, despite the best of intentions from me to protect you from losses and help you make money, I am not God, the all knowing. I can be wrong, and I have been wrong, and I will be wrong, some times. Thus, technical trading being a probability game, you have to make your own decisions as to what is best for your own trading / investments and bear the consequences of your own decision.
Best wishes,
Ooi
For once, the Technical Outlook is in sync with my Global Macro Outllook. Remember, we are playing a probability game based on statistics, and thus, the market may go up once more, breaching above the SMA50, should there suddenly be positive news announced tonight or tomorrow. But, what is clear is that more and more people are getting out for sure, based on technical chart.
Whether this is merely a short term correction, or the start of a new long term downtrend is unclear, which is why this is not the time to take a Short Position yet. What you are doing here, is to buy insurance, just in case the price collapses all the way to the SMA200. If the market moves up above the SMA50 once more and stays up, you may re-enter your Long Position at slightly higher price, and at the some losses on transaction costs. This is your insurance cost for doing the trading business.
I can't share my entire trading system with you because it took me two years of scientific research to develop it. But I want to protect my friends where possible. For me, I will NEVER keep a Long Position open when price is below SMA50. This is how I protect myself from ever being hurt in any stock market crash, based on studying Dow price movements over a period of 80 years. I hope it will serve you equally well.
Please note that as any quantitative systematic trading system based on historical backtesting is founded on statistical probability, there is no such thing as a sure thing. The question is not whether I am right or wrong, but whether over thousands of trades, over many years, we will make money, or lose money. And for me, I put my money where I know for sure, that had I done it in the past, I would have made money. Mathematical Probability is in my favor, just as the rules of the casino is always mathematically in the favor of the casino.
This, my friends, is how the technical traders and technical trading strategy hedge funds make money. Of course, despite the best of intentions from me to protect you from losses and help you make money, I am not God, the all knowing. I can be wrong, and I have been wrong, and I will be wrong, some times. Thus, technical trading being a probability game, you have to make your own decisions as to what is best for your own trading / investments and bear the consequences of your own decision.
Best wishes,
Ooi
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