Skip to main content

More about Market Timing

There has been talks about end year rally during the earlier parts of this year. Particularly in February to March period when the market was suffering from 'temporary' set back. During that time, even though the European Debt crisis were looming, the Asian economy was still booming. However, as the time passes, the European Debt crisis becomes more apparent. Countries were finding it more and more difficult to cover up. More facts emerge and picture became clearer. The earlier investor pull back and market began the down trend again.

In such time, we will invariably turn to tools that we think will help us to foresee such events. This is where macro economic theory comes in. However, for traders who are not well read on such topics, they want to use some thing faster and easier. Then, Technical Analysis comes into play. Using technology, TA can be very fast and handy.

Here is a classic example of using TA:

http://www.etfguide.com/research/705/8/The-Chart-That-Trumps-Analysts-Call-for-a-Year-End-Rally/

I have been sharing this link because I found this very useful. Nobody can predict the future. However, if we collect data across the masses, the extrapolation will become more reliable and more predictable. That's why I believe using TA to analyze S&P 500 is more accurate than individual stocks, especially less active counters.

Labels:

Comments

Post a Comment

Popular posts from this blog

Spanish Debt Issues

There is a lot of talk about Spanish sovereign debts recently. I came across a research paper which I think is very useful for me and wish to share it here. This is taken from www.fundsupermart.com, an online fund broker where you can purchase funds form various fund managers. This portal provides some research and comparisons and it is essentially a self service portal. From the chart provided, we can see that there is a problem for Spain to service their debts for the next 4-5 years if the debts are not re-structured. With this kind of risk, no sane investors would want to risk their money to buy Spanish bonds. They can only turn to European central bank for bail out. The blue arrow is a fictitious line I draw assuming re-structuring is going to happen. Essentially, they have to move the payment of capitals into next 5-20 years to be affordable. In addition to that, they can't make additional loans. This is just taking a very simplistic view of the situation. To have that hap...
Post a Comment
Read more

Always Do Your Own Analysis

I would like to share a great article that I had just read with all investors. Many gurus, seasoned investors always warn new investors to do their own analysis and research. Reading and referencing other people's work is fine, but, one must always know his own position and do complete analysis. As in the case of people who blindly follow Warren Buffett into Goldman Sachs and General Electrics in the 2008 crisis. Taken to Task: The Cult of Warren Buffett By Aaron Task | Daily Ticker – 9 hours ago Bank of America stock jumped over 9% Thursday on news that Warren Buffett is making a $5 billion investment in the bank. But, at $7.65, the stock closed more than a $1 below its high of the session and BofA shares were falling anew Friday morning, trading as low as $7.45 before stabilizing... ....... ....... ....... Moreover, investors who've followed Buffett into investments like Goldman Sachs and GE got burned, assuming they adhered to Buffett's dictum about ...
Post a Comment
Read more

Think Like a Turtle Trader

Dos and Don’ts for Thinking Like a Turtle 1. Trade in the present : Do not dwell on the past or try to predict the future.The former is counterproductive, and the latter is impossible. 2. Think in terms of probabilities, not prediction : Instead of trying to be right by predicting the market, focus on methods in which the probabilities are in your favor for a successful outcome over the long run. 3. Take responsibility for your own trades : Don’t blame your mistakes and failures on others, the markets, your broker, and so forth.Take responsibility for your mistakes and learn from them.
Post a Comment
Read more