She emailed me in Oct 2004 with this comment:

"I found your site via Google. Good work on the investigation of the Turtle Rules
and N!"

She was referring to this article I wrote - "A Look At The Turtle Trading System".

You may be asking, "Who is she?". Click here to find out.

A few years ago in the Trading School thread (which no longer exist) of another
forum (of which I am no longer a member since they imposed membership fees to
post), I wrote in reply to a posting that said that the market has changed. I replied
that the market had NOT changed.

If you look at human nature of the past and present, has it changed? If you look
at human nature of the present and future, do you think it will ever change?

Many people confuse advancement in technology intoduced into the market place
as change. But they always forget that, whether you press a button to buy/sell or
you pick up the phone to tell your broker to buy/selll, whether you get the latest
price from streaming realtime price on your computer or you get the prices from
tomorrow's papers, whether you get the news now or read about it in tomorrow's
paper, whatever you do it is the human nature in each and everyone of us that
directly influence our decisions.

Who invented the market place? Humans of course!
Who are market place invented for? Humans of course!

The market place is all about human and human nature. If human nature has not
changed then how can the market has changed? Or I should say that since human
nature WILL NEVER CHANGE then the MARKET WILL NEVER CHANGE.

Today I found an interesting article from Teresa. You can read about it at this link:
The Market: What Game to Play -- and When

When I read today's Straits Times backpage MONEY article, "Investors who stay
the course could win big with the right stock" this morning, I had wanted to post
a comment on it, a negtive one of course. Somehow I refrained but what I heard
during lunch time destroyed whatever hesistation I had.

I was at the grocery store counter paying when a man came it and talked to
the boss about the newspaper article, that $10,000 can turn into $1,000,000
in the stock market. This is exactly the type of negative effect that such
reporting can do. The first time I heard something similar was in 1981. I never
forget my market baptism.

It is always so easy to look back at the past and say if you had done this you
would have this result. Did the jpurnalist do a research of how these specific
big-baggers were doing at Jan 2002 reference few years back? Or did the
jounalist do a research at this time of what are the stocks that will be
big-baggers from now on for the next few years? Obviously not, otherwise it
will be in the newspaper as well.

So what the journalist did is no different from that of a backseat driver. You
see, backseat drivers think they are always smarter than the actual driver.
And they usually either do not process a driving license or they seldom have
the chance to drive. Those who drive often knows what it is like to be on the
driver seat.

What I had wanted to comment about is something that is a repeated many
times in history. Market will never change because human beings will never
change. This article has the effect to prompt a lot of people on the street to
behave greedy. My lunch time encounter proved it. Trust me when I say that
this will again be repeated around the end of the next bull market. Because
this is one of the signs you see when the market is near its peak.

Did I say, "will again be repeated around the end of the NEXT bull market"?
Yes, I did. How about THIS bull market? This one happening now? Well,
today's article is one of the signs that the PRESENT bull maket is coming to
an end.

I pity those who from today decides to mortgage their house, car, wife and
kids for the multiple $10,000 dreaming to make multiple $1,000,000 from the
stock market. They may be a lot of blood on the street in 2007.

Next two months are important time to be careful. History has always taught
that bullish articles like this type appearing on newspapers and magazines
cover has uncanny timing for a market top.

In my 1Nov post (link) I made in the "Historical & EOD Data Provider
& Vendors", I was beginning to feel uneasy about the current bull market.
Today, this is important input for me.

History is unlikely to be wrong... after all the coming $10,000s are spent on the
stock market. Like one of those partial $10,000 I spent in 1981.

Hi CSK,

Sadly you are right.
The last bloodbath was just a few years back
but nobody remembered.

Guessing the direction of the market
is very difficult
but many insisted that they have an edge.

What is going to happen today, tomorrow, 2007 or 10 years later,
I really have no idea.
But I have my plans.

For me I am so damned lousy in guessing the market direction
that I made it a rule that
I will not hold an unhedged and
highly leveraged position overnight.

I have a friend, he had mortgage his house, sold his car, borrowed money and bought the blue chips.
He nearly bankrupted.
But now he has retired, with his millions.
Can he repeat his feat?
I don't know.

If today, someone asked me if he can try the same thing.
I will say go ahead if you think it is an opportunity. Seize it!

But at the end of the day,
remember
no regrets, no tears.

That article remind me of other incidents.

Some times back I posted a question to the (other) forum, asking if anyone actually know of someone who actually turned a $60k investment into $1.x mil, in Singapore stock market within approximately 3 years period recently.

The answers I got mostly were: it can be done, and some kind soul even point me to certain stock which had made more that that kind of movement. But I was asking if someone actually know this person personally and are confident that this person did achieve this kind of return. I am talking about real life person that had done that, not theoretically can be done.

I did not know this person, but one of my friend said he heard of the person's performance by a remark past on to him at one of his brief business dealing. I am very skeptical as I told him that if as someone who barely know this person and let him know of his fantastic performance, then surely there must be many more who know about this person's performance.

I even asked my friend if this can be repeated, try get a tips from this person now and hopefully 3 years or so later, we too can laugh our way to the bank. Too bad my friend did not get an answer.

Similarly, I have at other occasion heard of someone touting his FA skill, saying something like: "those who bought Microsoft, Coca Cola in the early days are rich now." But when I asked him for advice that which stock will be the next Microsoft or Coca Cola, I got a "don't know" said in many words.

To me, all these are just like that article. Theoretically possible, but does it practically achievable? If there is a way, how?

I don't know how in that route. That is why I look at my charts, it least it keep me afloat.

Today, there is another important sign that the present bull market is coming to
an end. This time on both the front and the back pages of The Straits Times.
Coming so fast after the $10,000-to-$1,000,000-stock-market-profit sign.

On the front page:
Katong condo sells all 121 units within 36 hours
"When we started taking orders on Friday, all hell broke loose. We had to turn
away hundreds of people yesterday."

On the back page:
More high-priced homes sold this year than in past 10 years
"The fact that more homes above $2,000 psf have been sold this year alone than
in the last 10 years indicates that this is a one-in-10-years kind of bull run that
has come back."

What other signs will be coming next? They will surely come because newspapers
must always have something to say on their front and back pages. You just have
to watch for them.

What a marvelous timing!

Pei4 Fu2 Pei4 Fu2! The older the ginger, the hotter it is... :P

The decline on 28Nov is just a coincidence. Usually these type of front and back
page articles are signs of a coming market top. The fact that they took important
space on the front and back pages means the newspaper deemed the reports
important to be there. The sad fact is that when the things reported have already
happened (which is always the case when they make front/back news) it means
the things reported have already run its course and near the end.

There should be extreme caution now (although at the same time do not have a
pre-concieved/prejudiced mind). The thing is not to be tempted by your own
greed; not to do what is reported. Not to think of making $1,000,000 from $10,000
in 4 years. Not to think of making big profits by churning properties. If one gets in
and gets stuck now, it can be very difficult to get out. That is why when you look
back at history, bodies fly out of highrise windows.

It is tempting to say that the markets are toppish,
And I believe there are many compelling reasons for it.

However we must never jump in front of the train,
Even if we believe it will stop soon.

Because history has taught us,
An overbought market can remain
over bought for a long time.

But history has also taught us,
Market darlings today,
Seldom are in favour tomorrow.

And even in this rising tide,
There are many issues,
Still stuck at rock bottom levels,
because they suck and will sink.

Likewise, even if the broad market is collapsing
There will be gems,
to be discovered.


Are you tempted ?

It is coming into place. It is coming together. Step by step.

Today, it hit the most prime slot. Right there as the main headline of the front
page of The Straits Times where every working and not working Singaporean
and foreigners will not miss. And even if they don't buy the papers, when they
walk pass the news-stands, they can't miss reading it.

STI hurtles towards 3,000 level


While I am watching out carefully here, for a shaky underlying structure, for
potential price vacuum below, when the door is too narrow for the crowd inside.
In case you may have missed them, I must also repeat the careful guarding of
the mind not to have a preconcieved and prejudiced mind. Nothing is more
reliable than to see the price action unfold. If it comes, it will show. Right now,
don't jump to conclusion yet even when the odds and probabilities are stacking up.

With a clear mind, this is how you should approach your analysis.

I am watching Europe for early signs. Switzerland was the only one down
yesterday. And it speaks a lot when you know it. See my 30Nov2006 post in
the "Historical & EOD Data Provider & Vendors" thread (link).

By the way, have you taken a look at the FTSE100 lately?

Hi csk,

Anything to do with futures december contract expiration? :ph43r:

Hi Santa,

Depending on the market, futures contracts expire every 3 months or every
month. Furthermore futures contracts follow the cash, with a basis that can
change, but the general direction always the same. It is futures follow cash, not
cash follow futures. And how do cash indices get their levels? From the component
stocks of course. So how can futures contract expiration affect the cash (stock)
market?

When stock markets go down, it is common for people on the stock side blaming
those on the futures side for the slide, blaming program trading and what not. For
example, the crash of Oct1987 was blamed on program selling. But I remember
research done after that showed that not to be the case. Instead research showed
that arbitrage between futures and cash actually prevented the stock market from
going down further.

Yet, it is still common today to hear the futures side being blamed for any thing
bearish that happen in the stock market. I find futures traders are more
sophisticated and more matured than the plain stock traders. The futures people
see the world on all three sides while the stock people see the world only on one
side. They are unable to see the other two sides, to see better with their blinkers
on.

Thanks csk.

:)

Some time back,
the day when STI had a big retracement,
the special quotation day,
a respected foreign bank wanted to buy
so many, regardless of price, that
simsci opened at the highest...

from the singtel thread,
things are clearer,

however,
we must not jump to conclusion.

This is the cash and the future,


Now why is it different from the textbook ?

Another salvo today. Right there prominently on The Straits Times Money
back page.

"Sales frenzy at Marina Bay condo sees record $2,700 psf"

"Investment property sales at all-time high of $27b"


The money flow is always greatest at the tail. Things always look the most rosy
right up there. The mentality up there is no matter how expensive, things can
always be bought because "I" have money - money from the stock market.

So it is like this that money will flow strongest at the tail. You cannot stop them.
They will treat you as an idiot blocking their road to riches.

CSK,

You really instill fear into me while going through this thread. First, let me touch on the 10k turning into a million. Thursday, I went to PhillipCapital for some admin, while browsing through the live quotes, there was a middle age man came over to check his stock. We had a brief chat and he shared with me his stock holding, an indo-linked stock. He said, all one needs is one greatest holding, and have faith, ride the wave and bingo, you turn from nothing to something! Having bought AFP at 8c, he hold millions of it and hold on till now since 2002-3 and bingo, an $80k transformed into slightly over $10 million today. So, it is possible. If you asked, what's next. Quoting from the horse mouth, next the the casino player that had bagged the recent IR site. He told me, have patient and be rewarded with potentially 5-6 baggers in the next 3-4 years. Only one? Yes, he told me that he sees 5 telltales signs of market may crack soon. For one, we are at all time high.

Move on, yes, market is at an unprecedented peak and I actually had a thought just now. What are the rest doing? Many are still resting at below ground level. Aren't they going to move up, at least? You may humbly say that darlings will remain as darlings, and so far, only those darlings are moving. Many are forgotten. Will they have their last chance to catch up with the leaders, those standing at historical high before all hellbreak loose? I am pretty mixed at current level. I won't chase those big blues but looking at those sticking at low, yes, they may just rest in peace forever.

Come to think of it, if those that don't move, when things come falling down, they like to follow as well. This leave me with the dilemma of whether should I also pare down those holdings that are not moving and leave me pretty frustrated when I am seeing indices keep hitting the roof!

If we look at the world market, have you noticed, there is one in Asia that is still hovering below the May's high? Going into 2007, Nikkei may well lead the charge for asia bourses and go towards 19000 points. I like to sell those in the peak and switch to lower valued bourse. I am pretty bullish.

Undead, I agree with you on there is always a star in the market, be it up or down. But the odds of picking up the winner will be much tougher in a bear market. Probably, looking at the theme for 2007, I find construction industry will benefit from the tailwind blow over from the property boom. It is a cyclical business but re-valuation will kick in once report cards are out.

Till now, I have no vested interest in my two bull mentioned in the thread. But I am finding an entry into either one or both.

I am not sure if that guy is telling the truth. First, the maths did not add up.

$80,000 @ $0.08 give 1,000,000 shares. 1,000,000 shares at current price is
approx $1,180,000. I have doubt because the numbers cannot jive. No way
he could have bought millions of shares at $0.08 with $80,000, even on
margin. No way he coul dhave made $10,000,000! If you probe him with
questions, the lie will be exposed.

Not sure that he would have bought so much because AFP at that time was
having very bad financial problem. In fact, when it was on its way down at
around the $0.12 level in early 2001, there was an attempt to push in. Tips
were constantly being pumped out at that time when they were or just
completed some financial scheme to avoid going under.

And did he sit through the 44% drop in equity in second half of last year?
From his wonderful story, he probably did.

It is so easy to look back and say wonderful things. Just like, would one put
all one's eggs into Accord Customer Care now and have faith? Oh, it is known
as MDR now. Well, maybe if it shoot up over time then someone somewhere
will have another beautiful story to tell. But will someone do it now?

His maths did not fail, mind failed! I punched in a "zero" less. He did not touch on the amount of money but mentioned 8c, 10mil shares till now. He told me he has the confidence because back then, AFP NAV is $1. Therefore, he did not see why a dollar counter was selling for a penny. What held his faith is he has the insight to the industry which his own business is to supply equipments to similar industry with AFP. Therefore, whether to believe, to me, I just pick up those that I feel I can learn, PATIENT.

Today, market cracked! The selling is swift for we are at the top. Thus, any bad news will trigger a spate of selling. The Thai general really put his country into a mess!

Allow me to sight an opposite example.

A friend of my friend, keep averaging down Malaysia shares before the suspension of CLOB trading, thinking that it is an once a life time opportunity, Singapore government who had collected years of stamp duty will surely not let CLOB disappear without a fair and proper exit strategy.

He was wrong, and badly burnt.

You would have noticed that there had been more rosy reports on properties on
the front and back of the local newspaper. This will continue to have the effect of
people not wanting to miss out on the deal of the century. This will have the effect
of people finding the money by all means so that they won't miss the train.

Find it they will. Miss it they won't. Until one or two stations down they realised
their deals are not that rosy. That a lot of those who had gotten in earlier and
unloaded onto them are now on the train travelling in the opposite direction.

Today is the first day of the New Year. The P&L of 2006 already booked. A lot of
employed traders start out today with a clean sheet. Their p&L for 2007 starts
today. Those that did not do well last year or their profitable year did not satisfy
their unsatisfiable (if there is such a word) bosses, this is the window to try to
make good. This is also the window for a lot of trader to be gungho and try to
meet their 2007 budget quick.

For stocks, the only way is buy buy buy buy buy (unlike the futures market where
sell sell sell can also a profitable strategy). So starting today and for the next few
days, expect some good stock market performance. Expect a lot of happiness.

The thing I will be looking out for is how long this annual frenzy will last. How
much firepower there are and whether sustainable. Or is it the last burst of fire
before the retreat?

Three of the Turtle's selection questions:

True or False
The more bullish news you hear and the more people are going long the less likely
the uptrend is to continue after a substantial uptrend.

True or False
Uptrends end when everyone gets bearish.

True or False
The market can be understood better through social psychology than through
economics.

Sheeps are being slaugthered today. The ones that went to the green pasture
over the past weeks are the ones slaugthered first. They won't be able to hold
their hands. They are the weakest hands. More will be slaugthered. The process
does not end so soon. They will be enticed back in and the knifes come out again.

There were more signs over the past days. I have been silently watching. Over in
another forum, I started seeing seasoned ones who is making money started
talking about margins to the newbies.

Don't get me wrong, I am not against margin, I have nothing against margin. I
have been in the futures market for more than 20 years and margin is the only
way to go in the futures market. Futures traders are warned of the wrong and
improper use of margins. This is usually in the disclosure statements which is part
of the futures account opening form they sign.

But for newbies to the stock market, this is a totally different and uninformed
sitaution. This is NOT THE TIME to encourage newbies to the use of margin for if
they do not have the capital they are going to get it through margin. This is where
they get killed easily. Yet this was what went on in that forum. And this is one of
the things I look out for and it happened.

Many people blamed Jesse Livermore for the stock market crash of 1929. Many
people believed that he single-handedly brought the stock market down. Yes, he
took advantage of the market condition and he went short. but was he big enough
to bring the stock market down? Can one person do that? Even the Govt and the
powerful with their combined power and influence could not sway the market one
way or the other and yet people blamed one person, Jesse Livermore for the 1929
crash.

History has shown that it was borrowed money that caused that collapse. Many
people, out of greed, bought stocks on margin. and when prices retreated they
could not keep up. They were forced to liquidate. And then if they could not pay
up, they were forced to sell their homes. This was the actual cause of the 1929
crash, not Jesse Livermore, unless you insist that one person can dictate the
direction of the market. That one person is more powerful than the combined
power of the Govt and the Morgans and the what nots that owned banks in New
York at that time.

Human beings should be smarter when they look back at history. But history has
also proven to us that human beings are not smarter from past lessons. Greed is
a more powerful emotion and past lessons cannot co-exist with human greed.

When you go to other forums you will sure see people there cursing at kateks,
shortists or whatever name they call. Every single downwad move in the stock
market they blamed it on the kateks, shortists. It is no wonder that human beings
will always be the same, like they were in the past, like they are now in the
present, like they will be in the future.

Human nature will never change. And the sotck market is created by humans for
humans. It exhibit all the human nature in the market.


"The phone rang and Livermore signaled to his assistant, Harry Edgar Dache',
who had just arrived, that he would answer.

Hello."

"This Jesse Livermore?"

"Speaking."

"You bastard, you goddamn bastard, Livermore. This is your doing and you are
going to pay. I'm broke thanks to you, no I'm more than broke. I owe my broker
thousands of dollars of margin money, but I still got my goddamn gun. I'm headed
down there to blow your goddamn brains out. Next time you answer your door I'll
be standing there and the next thing you know you'll be walking through the gates
of hell-which is where you deserve to be. You miserable son-of-a-bitch."

Livermore slammed the phone down. It was these articles, picked up by every
paper in the United States, blaming him for the "crash". It wasn't him. He wasn't
that powerful, no man was, not even the men from the great House Of Morgan.
But that wouldn't stop the public from thinking he triggered the crash and was
driving it down by selling, selling, selling.


But the calls kept coming:

"Livermore, you goddam liar-I know how smart you are. You say you are on the
positive side of the market while you beat the prices down into oblivion. I'm
coming for you. I hope you never get another good night's sleep, you miserable
bastard."


And coming:

"You rotten son-of-a bitch-what do I have to lose? I lost everything in the market
thanks to you, and your bastard friends. You think you can crush the little man,
destroy me and my family with your illegal operation. You are a dead man, you
just don't know it. My family suffered, now your family is going to suffer you
miserable son-of-a-bitch."


And coming:

"I lost my house today Mr. Livermore what do you think about that? My goddam
house that I spent 23 years paying off. They evicted me today-I'm out on the
street like a bum, with my wife and four kids. You did it asshole, and you're going
to pay for it."

Somebody told me he shorted NK the entire day,
yet he did not make much, after comms.

But he is a scalper, with a few ticks tolerance,
and the market was jerky.

And I longed the NK at many "looks good" supports.
I could not made money today.
But hey at the end of the day,
it was not so bad!

Markets will go up and down.
But many remain silly.

:P

I have been watching its stock index and roughly guess that there is
much greed going on in that market. I do not live there so therefore
I cannot confirm my guess.





So is this really happening there?

Today's Straits Times page 10:

Stock market fever raging in China

Quotes:

"IT"S hard to ignore the signs of China's stock market frenzy: office
workers quietly checking stock prices before their next meeting,
retirees investing their life savings in funds, and in some extreme cases,
investors selling their homes to buy stocks."

"At the time, I thought that these people made money in the stock
market so I should also be able to,"

"The flood of new investors rushing online and to brokerages to open
new trading accounts has resulted in a flood of liquidity in the stock
market, sending Shanghai stock indexes soaring."


There can only be one ending and it is going to be a heart breaking one.
Like those we have seen countless of times in many places, including
Singapore where we had a few already and one coming soon.

Let me share 2 personal incidence:

1. In May 2006, when I was at Beijing Wangfujing bookstore 王府井书局 browsing their local investment books, I was approached by a local. He tried to strike a conversation with me, and passed me a name card showing his title as Director of one of the investment service company. He was asking me if "I wish to make big money" and asked me to open an investment account with his company so that he can tip off me to buy some good stocks. I politely told him I shall see how first, and moved to other section of the bookstore, he tailed me. Only after talking some 20 -30 minutes seeing I was unmoved, he then remarked "Sure win, call me" and went off, presumably to another potential client browsing the investment books section.

2. This morning I went to one of our local bank to run some errands. The investment officer ask me if I would like to buy their China Fund, which has been doing very well last year.

To me, these indicate that both the local and overseas parties have been farming funds to feed into China market. Some times down the road when the liquidity dries up, the balloon will burst. The question is, how much more time do we have before the last cent was put into the market? (No money to buy, sell house to buy!) And are we able to "walk a mile with the crowd" and get out before the market burst?

"STI TO HIT 4,000 POINTS BY END 2008"

See: http://www.fundsupermart.com/main/research...&articleNo=2132

Another sign of end of bull run?

Can anyone now remember what the market mood was like back in
May and June 2006? Maybe some yes, but largely probably not. No
one at this point now would want to say they were bearish at that
time. Why? This makes them look silly.

I will re-post three of my earliers posts from other threads to give
additional insight to human nature and to contrast the mood.

You will see the pattern of media reports and the effct they have on
the public. When do you see disappointment and when do you see
esctacy.


"The newspapers tell you what the insiders want you to know,
not what you need to know. Watch the newspapers. When things
are the worst and it is time to buy stocks, they never tell you
anything about the good times that are coming, but when stocks
are top and the insiders want to unload all they bought at the
bottom, the newspapers tell you about dividends, extra dividends,
melons, rights, and large earnings, when they should tell you that
you are picking "lemons" and are getting "wrongs" not rights on
your stock."
WD Gann


"Many a trader has begun at the bottom of a bull market to trade
conservatively and accumulated a large a mount of profits. Finally
he begins to pyramid too heaviliy and too fast near the top, with
the result that when the trend turns he gets caught overloaded
and loses all the profits he has made and probably a lot of his
capital. Sad experience has taught me that it is bettter to be safe
then sorry. In speculation let "safety first" be your motto."
WD Gann

Reposting from Let's Learn Technical Analysis thread
Originally posted on on Jun 2 2006, 09:30 AM


Reprieve should be here now. Whether it will turn into something
permanent will depened on any further human stupudity on believing
news report blindly.

The news media want you to believe that not only the FED will hike
rates again but that the market is very concerned about it. This is
what they have been repeatly hampering away for the whole of last
month day after day, in print, on TV, on radio, on the Internet. If you
cannot read news without a clear and detached mind then no doubt
you would have been suckered in as well.

The market, being the decision maker of interest rate direction
(definitely not the rubber-stamping FED), is firmed on their decision
of a final 0.25 hike to 5.25 pct. After this, no more rate hike, at least
no more to Mar2007. When new futures delivery months are listed,
we can see further but as of now the lens can only see up to Mar2007.




This decision has already been there, before May, for all to see in
the very transparent futures market. So since the market has
already made the decision of a 5.25 pct Fed Fund and most
importantly has already priced this into financial markets, what
is this stupid human panic all about?

Why do human beings allowed their brains to be hammered daily
by repeated dosage of poison from the news media. Let's hope they
wake up now. Let's hope they put some reputable senese into
themselves. Let's hope this chance of a reprieve will not pass by
knocking and no one open the door.

Market sentiment is too bearish. And with Merrill Lynch reported
in yesterday's paper to be bearish and that this is only the first
salvo, I am even more of the view that this May panic is a
distraction and not a change in trend. Let's just apologise to the
market for the human stupidity shown (captured on the images
shown below) and move on.

Reposting from Fallen Angel Pattern thread
Originally posted on Jul 12 2006, 12:00 PM


No, the S&P is not yet showing the Fallen Angel pattern but there
is a possibility. It has form the left side of it. Only the right side
action from here will decide whether it completes the pattern or
invalids what has formed so far. If it does form then it will be
many years before more good years can return. This is the danger.

But judging from news media bombardment of rate hike danger
to the stock market and the fear they have generated, I read
otherwise. Shaken by the daily news media bombardment, quite
a lot of weak hands should have already bailed out by now.

And yes, I refer to the fund managers too. Afterall they have since
long time ago taken over from the retail individuals to play the role
of the public (vs the smart money). Many fund managers are
young graduates with at most few years experience so they can
never be the smart money?

With news media bombardng with negativites when the S&P 500
is at this "relative" high level, and still staying here, and with
weak hands already out, the underlying structure may now be
more solid than few months ago. It may not be prone to panic.
You can bet there will be more hype about the Fed raising rates
but as you will have already read in the Fed Fund thread (link)
that the market has already decided on a 0.25% hike on
8 Aug 2006. The panicky will still panic but the non-panicky
will not.

We now have to see how this form out. Whatever we think now
can only be a guess, nothing more.





Edited to add:

In case you may be wondering what is Fallen Angel pattern, it is
the pattern of an instrument that rose in stature to be an angel,
to be loved by many, only to fall back down to earth.

Some past examples:

Reposting from Fallen Angel Pattern thread
Originally posted on Sep 7 2006, 11:25 PM


The news media is once again hyping up the interest rate fear just
because of one economic data. You can be sure that their euphoric
reporting will be repeated time and again and now is no exception.
You can be sure those young fund managers will be frightened the
shit out of their pants to follow the hype for fear of losing their jobs.

If you have followed the Fed Fund thread (link), you know all this
are just plan human stupidity. The market has not decided on
another rate hike so what are the media so frantic about? Or are
they just creating another story to sell more papers? But since the
media has began their assault on the market and there will be fund
who will react without excercising their brains but with full-blown
stupidity, there will be no doubt be the effect.

There have been attempts in applying Sun Tze Art of War to the
market. I am not familiar with it. But I play the PS2 game, Dynasty
Warrior 5, a la Romance of the Three Kingdom. There is a time for
defence, for consolidation, for strengthing your bases and outposts.
There is a time for retreat. And there is a time for attack.

For the market at this point, it is the time for defence, for
consolidation, for strengthening your bases and outposts.

We just have to see how the market weather this second attack
on its health, the first unsuccessful one four months.

"And there is another thing to remember, and that is that a market
does not culminate in one grand blaze of glory. Neither does it end
with a sudden reversal of form. A market can and does often cease
to be a bull market long before prices generally begin to break."
Jesse Livermore

"STI TO HIT 4,000 POINTS BY END 2008"

Another sign of end of bull run?


One of them. Better still if some bolder one shouts for 4,500 or 5,000.

Continuing the China observation of 31Jan earlier in this thread...

The Turtle trailing exit has already done its job last Friday. The trade
ended in profit therefore the next normal trade would be skipped
because of the Last Profitable Trade Filter rule.

However, if it breaks the FailSafe levels on either the long or short
side then this will override the Last Profitable Trade Filter and a trade
will be entered. For the short side it is a far way down. for the long
side, the recent all-time high is the FailSafe level.





Over the past one year, and especially the the recent months, there
should have been many rosy reports there too, like here in Singapore.
I am guessing based on chart price action. The recent newspaper
report that China and Singapore have attracted the most foreign funds
is one of those. Funds, as I have said before, have since long time ago
replaced the retails to provide public money to the market and on the
direct opposite side of the smart money.

Human psychology at this point is likely that this is only a correction
which is healthy for the bull market. Although I do not live there,
this human psychology is universal. It doesn't matter where you are
or what culture you have or what race you are. The psychology are
the same everywhere.

The recent high of 2994.280 is what Jesse Livermore would call a
Pivotal Point. This is above the current market level. After a few days,
if today's low of 2541.525 is not taken out then it too will become a
Pivotal Point below the market.

So today's rebound is likely to encourage buying. The market should
be supported the next days. Watch this upmove. It it fails to take out
the upside Pivtoal Point and falter instead then this is a clear warning
sign. If it then falls further and take out the downside Pivotal Point
then that is the second sign and a very important one.

Note: Do not confuse Jesse Livermore Pivotal Points with Pivots
or Pivot Levels so common in technical analysis. They are not the same
thing. Jesse Livermore Pivotal Points do coincide with Turtle's important
levels, if you are familair with the Turtle's Rules.

Market tops do not occur often. In fact they are quite infrequent
probably once every few years or more. (Japan has not seen one
in the past 16-years.) I am trying to show how to identify a market top.
I don't know whether I will be successful. I try anyway. If I succeed
then you will also see the pain of many. As our friend, History, always
say cannot be avoided.

While the Turtle exit was done last Friday, I have to wait till this week
to see this sign. Today is already mid-week and I think the low of the
week may already be done yesterday. So this sign can now be quite
reliable because it is unlikely to change unless the index rally up way
way way above the recent high. This is not likely to happen.

For those of you who are familair with Wilders' DMI, you will recognise
this sign.




So you see how useless those reports of huge amount of foreign funds
has poured into China in the beginning of Jan2007? Did it give you the
impression that the China stock market would be the best place to be
in, if you too have the money? Which country has the second biggest
amount of foreign funds gone in? Singapore? Would it not be the next
best stock market to be in, if you have the money? And if you don't
have the money? Beg, steal or borrow, right? That is, if you believe
their stories. I don't.

I know it is futile to try to tell people to watch out. Instead, I will be
disliked and even hated for mouthing such "nonsense" but this is not
important. I can only try to show how to identify a market top. I try
and I hope to succeed. If I did succeed, what happen after must
happen, like it always did. It cannot be avoided, cannot be helped.

I am getting quite worried what form it would take in Singapore. Will
there be early warning? Will STI break a few hundreds in one go?
Will STI eventually lose one-third of its value or half its value? I don't
know. I can only just watch on.

China was not the first one to show an early sign, somewhere nearer
to home did - Jakarta. Similar signal from Wilder's DMI appeared in
week of 15Jan2007. (Boot up your TA software and take a look at this
on the WEEKLY price. Like what I showed on China in the earlier post.)

But before that, the Turtle exit did its job one month earlier on 19Dec2006.
The index then broke above the then historical high on 27Dec 2006
triggering the Turtle system to go long again based on the FailSafe entry.
This was aborted on 9Jan2007, a day before the gap down.

This last trade being a loss, on the day of the gap down, the Turtle
system went short but was stopped out a few days later, obediently
following its "cut your losses" philosohy. Now, the system is waiting.

Did the rally in mid-Jan2007 look like a result of the "this downward
correction is good and healthy for the bull market" type of rally? The
typical suckers' rally?

Watch this market too from here.

Note: Jakarta was the earliest best performing market early in this bull
run. See this post:

http://z7.invisionfree.com/ChartistsUnited...dpost&p=2455196

Singapore shares end flat
This comes as more flexible rules for banks boosted financial stocks ...

The bulls do not need a reason,
but when you provide them with a good reason,
and they are not biting,
then we want to be prepared.

The China story has ended but not before another attempt to make
believe it was still rosy. It went to another new historical high but only
briefly. And then whoozzzz.

And people? The signs were already there earlier but waved aside
weren't it? They need to see the index crashing and feel pain but
yet there will be those who won't believe. This has been the case
in the past, will be in the present, and will always be in the future.
Human nature will never change!

As of this time of writing, the following world stock indices already
has end of trend confirmation on the Weekly DMI.

BSE (15Dec2006)
JKSE (12Jan2007)
SSEC China (9Feb2007)


The following has end of trend confirmation as of the close of 27Feb2007:

DJIA
S&P 500
NASDAQ Comp
NASDAQ 100

CAC 40
Swiss Market Index
MIBTEL Italy

Bovespa Sao Paulo
IPC Mexico

Hang Seng Index


When will Singapore has hers? How about the best performing Asian
stock market this year? One that performed the best even without the
type of foreign fund hype and boast? Malaysia? I think we will see it
today. The DJIA is down 416.02. This will do it.

At some point in this decline, like in all natural price movement, prices
will stabilise. At that point, people will start to shout rosy things again.
At that point people will start to buy again. Then prices will rise as
normal. And then people will be suck back in. Hopes return. Big plans
for the future return. And then whoooozzzz.

The time between the appearance of reports of easy money appearing
in the news media to the time of the actual top takes a while.

Like I have explained previously, it takes time for people to come out
with the money after reading all these front and back page reports of
easy money. Of $10,000 becoming $1,000,000, of ever-rising property
prices and everlasting demand of properties. It takes time for people
to beg, steal or borrow. And when their money go in, resulting in the
biggest flow at the tail end, then and only then the end happen.

This time, it takes about 3 months?

Has this happened before in the past? Yes
Could this have been avoided? No.
Will this happen again in the future? Yes


There is a Buddhist teaching. That Bodhisattva Chenrisig (Guan Yin Pusa)
made a vow that he would not become a Buddha until he has helped
ALL beings out of samsara. With his deep compassion, he went to the
hell realm to help beings there. He (or she in Chinese Buddhism,
doesn't matter the form), helped many to get out of the hell realm.
As he was ascending out of it, he looked back and saw countless beings
still there and was shocked. It seems as he had not helped any.

At that moment, he felt disappoinment in himself and broke his
Boddhisattva vow when he said he was not able to help beings. At that
time, at that very moment, because of that breach and because of his
deep sadness of failure, he broke into pieces. Amitabha Buddha came
to his help and in doing so lead to the image of the thousand arm
thousand eye Chenrisig we know today as another form. Thousand arms
to represent his ability to help many, thousand eyes represent his ability
to see far and many those in need of help.

Today, Chenrisig is still a Bodhisattva (Pusa). He is not a Buddha yet.

Singapore and KL fell. How not to? And the Weekly DMI signal
end of trend for both.

All good things must end. And now is the time to accept reality.
No denial, no more dreaming, no more hoping.








The Buddhas can neither wash ill deeds away with water,
nor remove beings suffering with their hands,
nor transfer their realizations to others.
Beings are released through the teaching of the truth,
the final reality.

Reposting from the US Fed Funds Rate (link) thread:


I had thought that the market (CBOT Fed Funds futures) was deciding
a rate CUT to 5.00 pct towards the end of the year either in Nov or Dec.
But now it seems there might another decision earlier in Aug. So two cuts,
first to 5.00 pct in Aug and then to 4.75 in Nov/Dec. Tentatively the chart
say another one in early 2008 to 4.50 pct.

Why do market need to cut rates? Usually it is because the cost of money
is expensive and need to make it cheaper. What economic condition
then would cost of money be expensive at the current rate?

Yeah, recently, now and then you hear all those rubbish again from
economists and the media trying to frighten you with prediction of another
rate hike, didn't they?

Now, why does the market think that rates need to be lowered. Why
would cost of money it be expensive?

Europe is open now.

FTSE UK and DAX Germany both have Weekly DMI signal end
of trend. There are two other markets left - Canada and Taiwan, which
is closed today - but I doubt they can turn the whole world around.

From today, you will no doubt be fed reasons by the news media and
economists trying to explain why this is happening. There will be all
sort of reasons. They are already pointing to China as the trigger.
But is it?

The trouble is, as long as theyare the news media, and as long as they
are economists, they have to sound intelligent to you. As long as they
try to sound intelligent, they will miss the real reason. They won't get it.
And if you read them and believe, it will be unfortunate you won't get it.

To get it, you have to look at the market, you have to look at human
nature. The first step is to study yourself because you are part of human
nature. I am, we are, they are, you are. We all are. And we need to
know where to look for the explanation. And then you study history,
they are all acts of human nature.

People are blaming the DJIA drop of more than 500 points on
27Feb2007 on NYSE computer system. They get it all wrong.
Can't they just get the facts right? Or are they in denial mode
and still finding justification that the market would not have
drop so much if only the NYSE computer system did not failed
them?

Here is a reproduction of what went on with the DJIA that day:

QUOTE

NEW YORK (AP) - A computer glitch triggered a sudden
plunge in the Dow Jones industrial average at mid-afternoon
Tuesday, turning an already bad day in stocks into a head-turning
spectacle.

Dow Jones & Co., the media company that manages the well-known
index of 30 blue chip stocks, said it discovered shortly before 2 p.m.
that its computers weren't properly handling the day's huge volume
in trades at the New York Stock Exchange.

It switched to a backup computer, and the result was a massive
swoon in the index as the secondary system took over processing
shortly before 3 p.m.

The Dow plunged about 200 points almost instantly, and was down
as much as 546 points -- its worst single-session decline in more
than five years, and one that sent the blue chips into negative
territory for the year.

'I've never seen a collapse like that, and I've only been doing this
for 47 years,' said Alfred E. Goldman, chief market strategist at
A.G. Edwards & Sons Inc.

The heavy volume of some 4.5 billion trades, almost double the
average, came on a day in which investors worldwide were rattled
by a nearly 9 percent drop in Chinese stocks overnight. Investors,
draped in concerns that stocks were overvalued and that economic
weakness was at hand, began crying 'sell' from the outset.

'The market's extraordinary trading volume caused a delay in the
Dow Jones data systems,' said Dow Jones spokeswoman Sybille
Reitz. 'We decided to switch over to the backup system, and the
result was a rapid catch-up in the published value of the Dow Jones
industrial average.'

The sheer number of sell orders caused a bottleneck, where some
traders reported that systems were slow to respond.

Despite the delays, the closing prices on Tuesday were accurate,
the exchanges said.

UNQUOTE


Now, was there a problem with the NYSE's computer? NO! The
problem was with Dow Jones' computer. It was not pumping out
the DJIA numbers fast enough! It was running behind what was
already going on on the NYSE! In other words the DJIA was
incorrect until they switched over to their backup. Then the
numbers caught up as the backlog cleared. It was this catching-up
that caused the perception of a sharp drop. What the eyes saw
was not reality.

Here is an intraday chart taken from Yahoo!. See the slope of both
the NYSE Composite and the DJIA on 27Feb. Then see the catch up
and the volume spike. (Yahoo do not have the volume on this chart
for NYSE) See that before the catch-up, the DJIA volume seems
normal with the previous 3 days. Could it be? You know it was a
heavy volume day.

This is reality.