Friday, August 30, 2013

Market Outlook 30 Aug 2013

So, the US economy looks to slip up, but not before there's a uptown in the S&P coinciding with the start of the war in Syria. This should propel the S&P up for about a month before another deep correction is made, while finally cruising in to year end at ~1640.

Europe only seems to be recovering because all the hot money that's been yanked out of bonds and EMs that head back to the US, gets rerouted over back to Europe. Once things in the US heats up, it could go either way. Transferring money from the US into the Euro, or yanking out from both sides and just sitting down. I think it depends on the rate of it. If it's gradual (I think it will be), Europe will slowly go up. If it's panic, well then shit's all over the place.

EMs by all means are being oversold, which solid predictions for the future, assuming they manage to tide over well when tapering starts. Only once the aftermath is settled and the damage is done, assessed and cleared to go, then BFTD is in motion. Solid looking EMs to me seem to be Thailand and Brazil. We'll have to wait and see.

I've just opened my live account with CMC doing CFD trading. I lost $2 yesterday and now I'm in the green for $10. You can mock me if you want, but I think that the concept is still the same regardless of the scale.

Just only 1 main thing to keep in mind. Preserve capital, stop loss just behind the first line of fluctuation, not anymore. Instead of waiting for the price to go back in your favour and have unrealized losses, just realize your losses and get back in when the volatility dies down. Gotta do that. Capital preservation!

Right now, my main bet will be on the AUD/SGD and AUD/USD going down. I'm more inclined on the AUD/SGD, because I know that the Singapore government won't do anything crazy to screw things up. The US govt on the other hand, well they cray cray. Although, the war news can really swing in the favour of the USD. I'll be going in largely based on technical indicators, Aussie news and policies as well as the general news. Most likely, I'll be having most of my guns on the AUD/SGD going down and down.

I'll be keeping my eyes out looking for a right time to enter when the S&P and STI reverses again. My indicators to watch are the US 10Y, Gold and Europe.

To me, it seems when Euro goes up, the S&P and STI goes up as well. When 10Y price goes down, the S&P and Europe goes up, bringing along the STI. While all these goes up, Gold goes down.

I'll be entering short into the S&P and STI when I see that:
1) Euro is down
2) 10Y is up
3) Gold is up

Naturally, I've ranges that should indicate when these will happen, plus I'll use 15 min, 1 hour and 1 day TA to optimize my entry points.

Just got to remember my damn stop loss to preserve capital

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