STI - Who to believe?

Today is a very interesting day. OCBC chartist Ritesh Menon issued a bearish "SELL SELL SELL" call on Wave 3 correction STI and at the same time, K Ajith from UOB issued a "BUY" triangular breakout target 2520. hahaha. Who to believe?

This morning, i thought Ajith was right by lunchtime, i thought Menon's view is also not totally illogical. A look at the charts of UOB, DBS and OCBC also present conflicting signs. UOB looks bullish, DBS looks toppish and OCBC looks range bound. Urggh....

My favourite rule is "when in doubt stay out"... as mentioned in my earlier postings, this period is not easy to trade. It will be a good market for the nimble traders.

With regards to my view, i will take no position as to who is right (since market is always right) but watch the 2400 support and 2450 resistance closely. A break above 2450 will head towards the 2580 level while a break below 2400 will mean that the support at 2280 is under threat again. Take care as even the signals are mixed. I guess this reflects somewhat the minds of many people now.

United Overseas Bank

UOB will announce its results on for 2Q 06 on 1st August. While I had been bearish on STI, UOB is giving me some 'second thoughts' on whether i should be bearish. From the Fundamental perspective, most analysts are giving it buy rating with a median price target of about S$17.83.
UOB has surprised on the 'upside' for the last 2 quarters, it remained to be seen if it can continue to do so for Q2.

Technically, the chart looks like it is ready for a run up to the mark 'X' ~ S$16.50 on the chart above. The parabolic SAR has turned bullish coupled with MACD crossover seemed to strengthen the bullish bias with a very strong support at $14.80. Lets see how the 'story' pans out over the next few days! :)

Havent start a position yet...zzz..zzz...

Some of you asked if i have taken a position in China Essence. My answer is Nope. I would have alerted you via email if I had taken any positions. I posted what i thought was a nice chart for China Essence. My Ninja Trading Fund still stands at S$100,000. I am not in the mood to trade yet as i still dont see any attractive set ups which compels me to trade. :) Better concentrate on my work first. hehehe

This is one hot potato

There are many reasons why i am still bullish on China economy and the stocks in there but i will not discuss them here today. I am going to show you one hot potato in the market right now ~ China Essence.



Fundamentally, i would peg its value at about 10x March FY07PE, which is around 79 cents based on a EPS estimate of 7.92 Singapore cents.

Technically, it looks like it is heading towards the 52 week high of 74 cents in the coming weeks. If it can break that 74 cents level, the minum target will be close to 98 cents (12x FY07 EPS).

STI Update

My view of STI remained unchanged. I think there should be a final leg down that will break 2,280. However, it is really tough to 'trade' these days. You can see so many 'gap ups' and 'gap downs' these days.

One of my brokers was just commenting that her clients were relative quiet except for the buy-and-hold types who called in to make orders during the June-July period. One of the regular traders bought China Sky at 108, cut at 90 only to see it creep back to 100 yesterday. This period will be relatively volatile, i am sure the headlines, geopolitical tensions and interest rate hikes to continue, oil cross US$80 again, ABC reports lower than expected profits, etc will continue to spooke the market.

A good thing about me is that i dont have the time or the energy to trade everyday, so i tend to swing trade more often than not. I dont see any interesting trade set ups yet. If i think there is a sustained upswing, i will 'alert' again. Actually hor, come to think of it, i alerted you to get in on 15th June and alerted you to run on 12th July... hmmm... not bad lah hor...kekeke... take care ah.

Chief Financial Officer

I just came back from Shanghai last weekend and i met my university classmate there. She has been there for 4 years already and has actually settled down with an ang moh and had a 7 month old daughter. She is running her own firm there in JV with a listed company. I guess being the daughter of the boss of a listed company in Singapore does help a lot in terms of capital, networking and business... hmmm... why didnt i 'chase' her during my uni days ah? (joking lah). She is still very pretty after giving birth to a kid. (*wake up wake up)...

Anyway, China never failed to amaze me in terms of its development. Shanghai is foreever changing. They used to have 1 crossing over the bund, now they have 4. China is where the action and $$$ is right now, everything is so vibrant there. There are so many funds chasing after companies for investments right now. We are talking about billions and billions of dollars here. If you want to earn a lot of $, go to China. If you want to have a safe and peaceful environment, stay in Singapore. It never fails to amuse me that so many of us want to get into China but so many of them (all the pei du mamas) all want to get out of China!!

I had 2 body and 3 foot massages 3 days in a row. In case you start to think crookedly, it is the ultra-clean type but the ladies are definitely younger than the peidu mamas here and errr... there are no sleeaze or curtains hanging here and there. kekeke, whoever says you can't do massage without curtains?!!?. One foot massage for 60 mins cost RMB 75 and one body massage costs RMB 95. Si beh cheap hor!!

I received a call from a friend today. He is looking for a CFO for a China company trying to list on Singapore.

Friend: You got friends interested to be CFO or not?
Me: Why you never ask me if i interested ah?! :P
Friend: You got CPA or not?
Me: wow pian, CPA, CFA, all have.
Friend: You sure you want or not. If you want, i can arrange a few interviews for you now.
Me: How's the pay like ah?
Friend: See how 'dirty' the company is and how skilful you are in negotiating lah. Some get success fees of $200k-$500k when company is listed plus a decent monthly salary
Me: okay, see how lah

hmmm... next time you see a CFO of a listed company, could be me man!! :P better go update my CV now..... zzzz...zzz...zzz....

The Couch Potato Portfolio

I am in the midst of planning for my retirement and i will share whatever knowledge i pick up with you here. I will share the Couch Potato Portfolio today.

Scott Burns launched the Couch Potato Portfolio (US-centric) in 1991. The portfolio is a perfect candidate for the laziest portfolio. Before Scott introduced this portfolio, he back-tested the data from 1973 to 1991. It performed an incredible 10.29% average annual return for that 18 year period. The result is incredible considering the 1982 bear market and the black monday crash of 1987. The Couch Potato achieved this extraordinary results with:

• No complicated accounts.
• No diligent reading of the financial newspaper
• No phone calls to brokers for "opportunities"
• No meeting with investment advisers
• Simple tax returns

To create a couch potato portfolio, you need only 2 funds in a 50-50 asset allocation. This mix will see you through all situations.

1. 50% Vanguard 500 Index (i.e. S&P500 no-load fund) The Fund's expense ratio is only 0.18 (versus actively managed fund of at least 1.5). <---- Currently only Lion Capital offers a similar Infinity US500 fund but the expense ratio is higher at 0.97.
2. 50% Vanguard Total Bond Market Index Fund. This fund matches the performance of Lehman Brothers Aggregate Bond Index and has an expense ratio of 0.22. <--- Havent found a similar fund in Singapore yet. If you can find a similar one with such low expense ratio, please share with me.

The portfolio is rebalanced every year (takes only about 10 minutes) to ensure the 50-50 ratio in terms of value stays. No brokers or investment advisers will recommend you index funds but even Warren Buffet advises that most investors are better off putting money in index funds with low management fees than with the hyped up fund managers that charged high management fees. The returns over time from index funds outperformed most actively managed funds.

I am contemplating starting a regular savings plan (say S$1,000 per month) into a no loads index funds (still trying to find a suitable one in Singapore) but the only choice i have right now is the S&P500 offered by Lion Capital mentioned above. I may be forced to wire my funds to my US brokerage account to search for a suitable no-loads index fund by Vanguard. Anyway, i will keep you posted. If you have any experience in this, do share with me. There are many things which i will share later (e.g. SRS Account, using CPFIS etc). If you have already gone through all these hassle, please share them with me. :)

Regards,
NT

Ninja Trading School

A picture just for creating a link.

A quick update on STI

Just to do a quick update on STI.

STI is doing a technical rebound and the rebound should be capped at around 2400 for the short term. The support is at 2380 and the resistance is at 2420. I think many counters are looking like STI at this moment (i.e. technical rebound). Do be nimble if you are trading this counter-trend.

Regards,
NT

STI heading towards 2220?

At this juncture, I think STI will likely test the previous low of 2280 support and if that level breaks, it will head towards the 2200 level. I will side with the bears for now. Stay out of the market if you are not the nimble and disciplined kind as the market place will likely be volatile.

Today i heard the most interesting headline again after missing it for a very long time. Geopolitical tensions. I have not heard this word for a very long time already!! Tensions in Middle East and North Korea, Oil prices at record levels, Poor Corporate Results, phwee... what a load of trouble.

I am back at my usual self. I have shown via live trades from 1 Jan 2006 to May 2006 on how to trade a $100,000 portfolio. The return during this 5 month period was more than 20%, but anyway, i will restart this portfolio again. Stay tuned for more actions :)

Cheers,
NT

Water as an Investment Theme

You may find the article from Finance Asia interesting. The topic is on Water as an investment theme. There are actually quite a number of 'water-themed' companies listed on SGX and the majority are from China*:

1. Asia Environment*
2. Asia Water*
3. Bio-Treat*
4. Darco*
5. Dayen*
6. Eco Water
7. Hyflux
8. Pan Asian Water
9. Sinomen*

I think the demand for clean water in China will be very great. Basically, the lakes and ponds there are highly polluted and much need to be done to clean up the water eco-system. I remember visiting the Dianchi lake in Kun Ming in June 04, the so-called lake is so greenish in colour that the locals told me no one dare to swim or eat anything from the lake (provided they can catch any fish inside). You can see from yourself how dirty DianChi is...

The Millionaire in You

I am back in business. I hope this will be my permanent blog for me. I was suprised to be able to get back my blog address - www.ninjatrader.blogspot.com back. It was previously unavailable! So to celebrate me getting back my favourite address, i deleted all my old blogs to start afresh (which is my intention to start afresh anyway).

Besides the World Cup, there are many interesting events that happen to my life. I borrowed the following book from the library and found it to be a very inspiring book. It really sets me thinking about my retirement plan. If you are free, perhaps you should borrow it from the library as well. I paste a picture of the book here in case you dont know what book i am talking about.



This book really set me into thinking about my retirement plan (or the lack of it). Anyway, here is the book review by Amazon. While the bad news is that i dont have a concrete retirement plan, the good news is that i am debt free. I guess i would have to build on this status for my retirement plan. Anyway, go read the book, i am sure you will enjoy it and benefit from it. The book actually made me borrowed 8 more books about retirement planning. I am actually drafting out my retirement plan. I believe it is what you do outside the office hours that will determine if you can 'retire' early or not.

Anyway, part of my retirement plan includes setting up a website. Originally i wanted to set up a free Ninja Trading School and for Google to pay for my charting expenses (monthly about S$250 each month for both futures and stock charting) but after my bad experience with Google, i guess that is not a viable option. Another option will be to get people to donate to my blog via paypal, i think that option is even more unlikely!! My last option is to charge a low subscription fee for giving live email alerts and show members how I trade a real portfolio live just to help cover my cost but i dont think that will make me rich. :P

Anyway, i will update this blog on a daily basis. Do bookmark your browser.

Happy Retirement Planning.