Wednesday, June 21, 2006
Thursday, June 15, 2006
Preparing for a strong rebound ...
Yesterday, I cashed out all my put warrents. The profit nearly balance my loss in mutual funds.
So far, the recent rebound keep the market within the long term rising channel. All medium term indicators showed over sold. The rally should have enough energy to extend. I switched my bond fund back to emerging markets and gold funds, hope to catch this rally. I am now about 2/3 loaded in the market. It have to be very caution when it get close to the previous high. May be I should cash out at least half of the emerging market fund when it get close to the previous top. If, in the worse case, this rebound turn out to be a second top, I would cash out everything on hand.
So far, the recent rebound keep the market within the long term rising channel. All medium term indicators showed over sold. The rally should have enough energy to extend. I switched my bond fund back to emerging markets and gold funds, hope to catch this rally. I am now about 2/3 loaded in the market. It have to be very caution when it get close to the previous high. May be I should cash out at least half of the emerging market fund when it get close to the previous top. If, in the worse case, this rebound turn out to be a second top, I would cash out everything on hand.
Rebound ...
The markets are generally 20% off the peak. My instinct told me that things are now with great discount. A rebound rally with significant scope is comming. So far, there is no theory on newspaper to explain the market behaviour recently. Most people view this as a normal market correction. Why liquidity suddenly disappear ? How come the markets all go in phase suddenly ? It's sure a critical phenomenon in physical term. The Fed rate increases is just a trigger. The story should be in the shape of the underlying configuration potential surface. I think the market won't go too low. Yet, before the coorelation between markets are restored, a risk for a big crash is still there.
Tuesday, June 13, 2006
Almost there ...
Panic selling again. Global markets, including oil and gold, all fall in phase. I did some day trade on put warrents today.
"It may happen that small differences in the initial conditions produce very great ones in the final phenomena. A small error in the former will produce an enormous error in the latter. Prediction becomes impossible" (Poincaré, 1903).
The markets is so sensitive to the fed rate, the market is moving from chaotic to deterministic, the market would become increasingly unstable and collapse.
"It may happen that small differences in the initial conditions produce very great ones in the final phenomena. A small error in the former will produce an enormous error in the latter. Prediction becomes impossible" (Poincaré, 1903).
The markets is so sensitive to the fed rate, the market is moving from chaotic to deterministic, the market would become increasingly unstable and collapse.
Thursday, June 08, 2006
Worldwide selling !
Stocks in Europe, Asia and emerging markets tumbled on concern of higher interest rates. Asian shares had the biggest loss in two years.
I took profit for my put options that bought last week. Great return. :)
The selling is almost over. Short term speculation may still be profitable. Next move ... would be to buy some good stuff.
I took profit for my put options that bought last week. Great return. :)
The selling is almost over. Short term speculation may still be profitable. Next move ... would be to buy some good stuff.
Wednesday, June 07, 2006
Inflation
Interest rate is closely related to the inflation. At the last peak, the treasury bond yields reached 15% in 1981 and mortage rate reached 18%. Will the inflation go up?
