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| 15-Feb-2010 09:25 |
Straits Times Index
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STI to cross 3000 boosted by long-term investors
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i like his dead cat diagram..haha.. seems apt for the tiger (big cat) yearDead Catby Robert Kiyosaki
Friday, February 12, 2010 Dow 5,000 in 2010? In my last column I predicted a “dead cat bounce” in the stock market and a possible Dow plunge to 5,000 this year. Obviously, many readers mocked my prediction. But understanding the dead cat bounce is vital, especially in today's market. Simply put, a dead cat bounce looks like Diagram 1 below: 
The market crashes, rebounds, and runs out of steam, then crashes again…unfortunately, and possibly, to a lower low. When professional investors observe a dead cat forming, many will begin to sell. If their selling leads to a panic, the stock market goes even lower. Putting today’s numbers to the dead cat diagram gives this topic more meaning. In 2002, the Dow hit a low of 7,286. In 2007, the Dow hit a high of 14,164 
In 2009 the Dow fell and stopped at 6,547. Dow 6,547 is where the market stopped falling and the dead cat bounce began. At 6,547 the market was oversold and buyers came rushing back in, looking for bargains. The Dow headed back up, and a bear market rally began. On February 5, 2010 the Dow closed at 10,012. On February 12, 2010 the Dow closed at 10,099. What Does This Mean? So the question is, “What do these numbers mean to me?” The answer to that question depends upon you. If you are a bullish person, you will be optimistic, reassured by these numbers, and looking forward to the Dow breaking 14,000 soon. If you are bearish, you will be waiting for the dead cat to finally die and for a double dip recession to begin. One of the theorists (and writers) I follow is Richard Russell, a wise sage who is in tune with markets and the madness of crowds. He has been in the business for about 50 years, so he has the wisdom and perspective of time. Lately, he has been writing about the ‘50% Rule’ of Dow Theory. I thought I would pass it on to you because it may assist you in seeing the future of the economy, even if --like me -- you do not trade in stocks. The following is my interpretation of the ‘50% Rule’ using real numbers. In 2002 the low of the Dow was 7,286. In 2007 the Dow hit a high of 14,164. The ‘50% Rule ‘number is 10,725…the halfway point between 7,286 and 14,164. In 2007, when the market headed down and broke 10,725, professional traders who follow the Dow Theory ‘50% Rule’ knew what was going to happen next. On March 9, 2009, the crash stopped at Dow 6,547. On that day, what I believe is a ‘dead cat bounce’ began as the market moved up. On January 19, 2010, the Dow stalled at 10,725 and headed down again. This is spooky. The 50% rule came true. 
The next interesting point is 7,286, the low of 2002, when the rally began. According to Russell, if the Dow holds at 7,286 and begins a rally, this might be a good time to buy. But if it fails to hold at 7,286 and slides past 6,547, then look out for dead cats dropping from the sky. Russell predicts that Dow 1,000, the number at which the Dow began its rally in the 1970s, may not be out of the question. If that happens, there will be millions of baby boomers joining the dead cats falling from the sky as their 401(k)s and IRAs implode. Other Markets This ‘50% Rule’ may apply to other markets such as gold, the hot commodity of this era. In 1971 gold was $35 an ounce. I began buying gold in 1972 when I was a pilot in Vietnam, watching the Vietnamese panic when they knew the U.S. was not going to win the war. Gold hit a peak of $850 an ounce in January of 1980. Gold dropped to a low of $252 in July of 1999. Obviously, I bought a lot of gold in 1999. Gold was at an all-time low because Central Banks, such as the Fed and the Bank of England, were dumping gold in an attempt to protect the value of their counterfeit currencies. According to the ‘50% Rule’ of Dow Theory, when the price of gold was passing $600 an ounce(halfway between $850 and $252), a rally in gold was on. When gold passed $600, mainstream financial experts began warning of a crash in the price of gold… stating that gold was in a bubble. Today gold fluctuates between $1,000 and $1,200 an ounce. Is Gold in a Bubble? When you factor in inflation and devaluation of the U.S. dollar, $850 gold in 1980 is $2,500 an ounce in today’s dollars. In other words, gold might be at 50% at $1,200, which is the highest of highs. Could there be a run to $2,500? Your personal answer to that question will depend upon how confident you are in Fed Chairman Ben Bernanke, President Obama, and Wall Street. If you have faith in our leaders of commerce, don’t buy gold. If you do not have faith in them, maybe you should buy gold or silver. If the dead cat bounce dies and the Dow drops to 5,000 in 2010, as I predict, then the price of gold and silver may die with the dead cat of the Dow, as investors cling to cash. The next question you need to answer is, “If the Dow dies and the price of gold and silver drop, what should you invest in at the bottom…stocks, gold and silver, or cash?” I know what I will do. I will buy more gold and silver. Why? The answer is because I trust gold and silver more than Central bankers, the Oval Office, and Wall Street. Gold and silver have been real money for thousands of years. The Lost Decade The people I am most concerned about are the average investors who have bought their financial planner’s advice of “Invest for the long term in a well-diversified portfolio of stocks, bonds, and mutual funds.” Many investors are calling the past 10 years The Lost Decade. That means those who invested for the long term in stocks, bonds, mutual funds, and cash are long-term losers. Japan has been in a Lost Two Decades. A ‘lost decade’ means: 1. Zero job creation. 2. Zero economic gains for the typical family. Home values are down and many families owe more on their home than the home is worth. 3. Zero gains in the stock market. Over the next few months, it is important to watch both the Dow and gold. As I write, the Dow is around 10,000 and gold is at $1,000. If the Dow breaks 7,286, the 2002 low, and continues down below 6,547, the 2009 low, watch out below. If 6,547 is broken and gold passes $2,500 an ounce, you'll have even more to worry about. |
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| 11-Feb-2010 21:43 |
Yanlord Land
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Yanlord Dome Collapses
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4 consecutive up bars with healthy volume.. ride the trend.. run when there's a sign of reversal..
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| 11-Feb-2010 10:49 |
Swiber
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Swiber
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paiseh permutation problem.. haha.. | ||||
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| 11-Feb-2010 10:48 |
Others
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Do remisers give presents to clients at year-end?
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l leave that to ur vivid imagination.. :)
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| 11-Feb-2010 10:45 |
Healthway Med
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healthway, healthy?
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14c ..buy cheaper coming liao..
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| 11-Feb-2010 09:23 |
Others
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Do remisers give presents to clients at year-end?
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i got shopping vouchers,cakes,lunches,greeting cards, calendars... quite a few.. must trade more frequent with ur broker .. if female broker better still .. :) keke |
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| 11-Feb-2010 09:21 |
Swiber
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Swiber
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technically oversold.. DBS issued a report TP $1.24 |
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| 10-Feb-2010 16:38 |
SingTel
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Singtel Bullish???
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Defensive stock of the year.. up 5c | ||||
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| 10-Feb-2010 15:20 |
Yanlord Land
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Yanlord Dome Collapses
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super oversold counter rebounding.. JP morgan increased their stake..see announcements.. |
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| 10-Feb-2010 15:18 |
China New Town
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ChinaNTown
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woah s'pore buyer..power.. | ||||
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| 10-Feb-2010 10:05 |
Swiber
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Swiber
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good vol today..already half of yesterdays' broke 1.08 immediate high.. |
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| 09-Feb-2010 14:11 |
Straits Times Index
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STI to cross 3000 boosted by long-term investors
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markets now in a dilema.. super oversold waiting to rebound but too much euro contagion only way is to short on rebound or sell into strength.. overall outcome is lower prices..
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| 09-Feb-2010 09:42 |
SingPost
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SingPost Q4 net drops 10.6% to $34.5m
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this is the mother of all defensive counters.. + it gives u 1.25c every qtr..damn good divy yield.. for those risk adverse..i advise u to get this stock.. |
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| 09-Feb-2010 09:40 |
SingTel
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Singtel Bullish???
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singtel below $3 is always a good buy.. defensive counter... make $$ counter .. recession still people have to talk on phones, go on internet.. etc |
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| 09-Feb-2010 09:15 |
Straits Times Index
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STI to cross 3000 boosted by long-term investors
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US closed below pyscho level of 10,000, looks like the party is over.. there will be occassional rebounds here and there..but the short term trend is down.. so strategy is short on rebound... |
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| 08-Feb-2010 10:53 |
Straits Times Index
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STI to cross 3000 boosted by long-term investors
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thanks boyikao3.. this one is my "tan chia" my main income from the markets so gotta analyse properly.. anyway STI as predicted M followed by A patterns broke down to furtherdownside.. market is very volatile so prepare ur stoploss just in case it goes against u |
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| 08-Feb-2010 10:05 |
Straits Times Index
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STI to cross 3000 boosted by long-term investors
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2,700 resistance.. today hit and fall down like london bridge.. put warrant players take note of this resistance level forming a M then A (for confirmation of downtrend) then it's downwards all the way.. |
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| 08-Feb-2010 09:11 |
Genting Sing
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GenSp starts to move up again
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Genting Singapore (GENS SP) SELL Price/Tgt: S$1.11/1.00 Mkt Cap: US$9.4b Daily: Vol 79.8m 1-Yr Hi/Lo: S$1.32/0.39 Receives casino licence; ready for opening anytime soon. Resorts World Sentosa (RWS) received its casino license from the Casino Regulatory Authority of Singapore (CRA) on 6 Feb 10 and is set to commence operations anytime soon. Comment: The timing of the receipt of RWS' casino license is within our expectation, and we believe that RWS will officially open its casino just before Chinese New Year (CNY) to take advantage of the festive season. The event is expected to generate favorable market sentiment and may temporarily boost GENS' share price. However, we reckon any share price upside would be capped by concerns over the strict junket regulatory environment, and Genting Singapore's (GENS SP) lofty valuations relative to regional peers (average 2010 EV/EBITDA of 10.5x). Currently, GENS is trading at 17.1x 2010 and 13.6x of 2011 EV/EBITDA. SELL into strength. We maintain our SELL call and target price of S$1.00 on Genting Singapore (GENS SP). We recommend investors to switch to parent company Genting Berhad (GENT MK) (BUY/RM6.78/TP:RM8.50), which offers cheaper exposure to RWS, currently trading at 2010 EV/EBITDA of 5.0x. |
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| 07-Feb-2010 18:47 |
GLD USD
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Gold going up this year?
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someone else jumpin on the bandwagon..Marc Faber Says High Inflation, Depression Then War
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| 06-Feb-2010 17:49 |
GLD USD
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Gold going up this year?
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it's time to revisit gold again.. big dip just buy.. paper money is worthless.. Euro debt, obama printing more money for stimulus for jobs, dubai debt contagion (it's not over yet) |
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