Tuesday, October 6, 2020
Monday, October 5, 2020
Saturday, October 3, 2020
Baltic dry index - 2020
Today, Friday, October 02 2020, the Baltic Dry Index climbed by 151 points, reaching 2020 points.
Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Wednesday the 10th of February 2016, when the index dropped to 290 points.
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Related stock: Sembcorp Marine, Cosco & Pan ocean.
Friday, October 2, 2020
US ISM PMI analysis for September 2020.
The prices increased to 62.8 (+3.3) because the producers were in an inventory reduction phase (PPI < CPI) which we had discussed before. Furthermore, this also indicated that US inflation would continue unabated. The new order (60.2, -7.4) declined significantly because of a huge fall in the local new order (-8.4) due to a smaller pandemic relief aid and an increase in personal savings. The inventories had started to increase by 2.7 points and this would signify that there would be increases in production and customers’ inventories eventually. Overall, the PMI had declined slightly to 55.4 which meant that the US was still in an expansionary mode.
S&P 500 Technical analysis. - Part 4
http://sg-stock.blogspot.com/2020/09/s-500-technical-analysis-part-3.html
I was asked to give my opinion on the new resistance line. Here it goes!
The new resistance line will be the previous peak in Feb 2020 and I've drawn the line to show it. Coincidentally, the S&P also stayed below that new resistance line that I've drawn. Please bear in mind that the candlestick gap will provide a good support range unless the S&P crashes through the gap.
Thursday, October 1, 2020
Wednesday, September 30, 2020
Tuesday, September 29, 2020
S&P 500 Technical analysis. - Part 3
Let's continue our S&P 500 technical analysis.
The above chart showed that 2 positive signals had developed prior to the S&P rise. The candlestick had closed above the 5-day SMA and the stochastic had a bullish crossover.
If there were at least 2 positive signals, we could execute a trade with a calculated risk.
What's going to happen next?
A candlestick gap has occurred and this will provide a support level for the S&P. As long as the S&P doesn't fall below the gap, the S&P will continue to rise. Once the gap is breached, we will have to draw new resistance and support levels based on recent high volume days.
http://sg-stock.blogspot.com/2020/09/s-500-technical-analysis-part-2.html
Another constellation is aligning and a big financial crisis is brewing this time. - Part 9
https://www.ft.com/content/c95e5a72-8322-4cfc-b36a-69e8998aea01
Many banking and financial entities and experts are warning about an impending financial crisis after our first warning. Oxford economics is the latest entity to warn about an impending financial crisis.
http://sg-stock.blogspot.com/2020/09/another-constellation-is-aligning-and.html
It seems to me that an unknown force or someone is trying to capitalize on this by disseminating information to exacerbate this crisis.
FinCEN is a highly classified US agency. Therefore, the leakage of sensitive documents is impossible unless someone leaks them deliberately. All the financial documents will be stored in a secured server with encryptions. Even if the documents are stolen, you will still need passwords to access/read them.
Therefore, it looks like someone is trying to create a banking crisis at this moment to facilitate a financial crisis. Let's see how this will pan out.
Monday, September 28, 2020
Saturday, September 26, 2020
The US property market is becoming distorted now! - Part 3
The US existing home sales have hit 6m which is 14 years high in a recessionary environment. Why?
The continuous MBS purchases by the US FED have caused this unusual phenomenon because these MBS purchases encourage the banks to give out more mortgage loans since they can transfer the risks to the US FED by selling the MBS to the US FED.
http://sg-stock.blogspot.com/2020/09/the-us-property-market-is-becoming.html
S&P 500 Technical analysis. - Part 2
Just as expected, the S&P 500 traded between the drawn resistance and support levels.
We need to wait for S&P to breach either side to determine its trend. Thereafter, we will need to draw the new lines again.
Baltic dry index - 1667
Today, Friday, September 25 2020, the Baltic Dry Index climbed by 62 points, reaching 1667 points.
Baltic Dry Index is compiled by the London-based Baltic Exchange and covers prices for transported cargo such as coal, grain and iron ore. The index is based on a daily survey of agents all over the world. Baltic Dry hit a temporary peak on May 20, 2008, when the index hit 11,793. The lowest level ever reached was on Wednesday the 10th of February 2016, when the index dropped to 290 points.
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Related stock: Sembcorp Marine, Cosco & Pan ocean
Friday, September 25, 2020
Is the US preparing for a 2nd covid lockdown?
The US imports have surged as the retailers are stockpiling in view of the COVID resurgence situation.
In August, we had analyzed that the US was undergoing an inventory reduction phase and we were correct in our analysis.
http://sg-stock.blogspot.com/2020/08/how-do-you-interpret-ppi-vs-cpi-and.html
Then, in September, we concluded that the US would end its inventory reduction phase after our PMI analysis.
http://sg-stock.blogspot.com/2020/09/the-us-ism-pmi-improved-again-in-august.html
Thursday, September 24, 2020
S&P 500 Technical analysis.
S&P 500
I was asked about the types of technical analysis that I used. Thus, I would like to give my opinion about technical analysis.
I am a fundamental analyst more than a technical analyst because I've more faith in the fundamental analysis due to my life experiences.
Let me begin the journey with LTCM.
https://en.wikipedia.org/wiki/Long-Term_Capital_Management
Basically, LTCM was a quantitative fund management firm which was managed by 2 economics Nobel prize laureates and many PHDs in mathematics and computing, and also top technical analysts. The failure of LTCM had shown that technical analysis per se didn't work.
Furthermore, there is not a billionaire now who uses technical analysis. The only billionaire is Warren Buffett who uses fundamental analysis per se and he doesn't believe in technical analysis.
Since I am neither a Nobel laureate nor a PHD in maths or computing, I will stick to do what I do best which is fundamental analysis.
Nevertheless, I will still give my technical analysis for S&P. Technical analysis is something subjective and different people will interpret it differently because different people have different time horizons in investments.
I am a swing or position trader technically instead of a day trader. For explanation purpose, I will use publicly available charting tools to illustrate my technical analysis.
I've drawn 2 lines on the chart. The recent 2 high points line will be the resistance level and the 2 low points line will be the support line. Furthermore, I've added Bollinger bands (2 Std Dev, 95% inclusion), 60-day Simple Moving Average (SMA), 100-day SMA, RSI and Stochastics to the chart.
From the chart, it looks like the S&P is at a pivoting point whereby it will either rebound or continue its downtrend. If the S&P breaches the 100-day SMA or my support level (also near 100-day SMA), it will continue to fall further. However, if the S&P closes above my resistance level and/or climbs above the 60-day SMA, then the S&P will continue its recovery. As for the RSI, the recovery will take place after it crosses the 50 level mark on the chart. The stochastics are in oversold territory but are stagnant now. Thus, a stochastics upward crossover will signal a recovery in the S&P.
In conclusion, I will adopt a wait-and-see position for the technical signals to be clearer first.
The technical indicators that I commonly used for my investment time horizon:
5-day SMA
10-day SMA
20-day SMA
60-day SMA
Bollinger bands (2 std dev)
Self-drawn technical lines (resistance and support lines)
Relative Strength Index (RSI)
Momentum indicator (Stochastics or DMI)
Last but not least, I use candlesticks just to determine their high-low points and also to check for any candlestick's gap. I don't interpret the candlesticks' patterns (doji, hammer, etc) because they were invented based on perishable commodities.
Wednesday, September 23, 2020
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