So long my friends

Dear Friends,

I have come to a painful decision to stop writing this blog. It has become too addictive and it's taking too much of my time. I have decided to focus on fund managment and discretionary trading management for my clients or any potential clients who would like me to manage using KUTE systems. I will discontinue posting my views with immediate effect. However, for those of you who believe my recommendations, I am revamping my website and will post my weekly recommendation there.

If you are keen to recieve the web address, please drop me an email at fcheng@konceptliving.com

Before I go, I hope that the warnings at the beginning of this week that the markets are declining and most stocks should be avoided should prevent you from losing money.

Good bye.

Francies Cheng

BBus MAppliedFinance

My last few blogs?

Good morning,

I am disappointed. No, it’s not about the returns of my stock trading. Rather it is the respond to my advertisement. Make no mistake; I have many calling me registering their interest for my seminar. However most of them thought that I am conducting a program selling stock free seminar, and when I mentioned that they have to pay for the course, they withdraw their interest. I should have believed my friends who suggested that I should charge $3000 and use part of the proceeds to pay for free seminars to market the program. Perhaps I have too much confidence with my program because I have made money as long as I apply the KUTE system which I am prepared to share. I am now having second thoughts about continuing my program. Perhaps I should just forget about sharing the right way to select stocks to trade and rather build a business managing other people’s monies with KUTE systems. If I am to choose the latter choice, I will discontinue this daily blog and change the frequency to weekly instead. Maybe I should just keep the secret to myself and free myself from writing this blog. What do you think?

I did a technical review of the stocks selected this week last night and here is the summary:

NOV weekly candle formation is still a “Sell” and the daily formation is a “Sell-if”. DSX weekly “Buy-If” and daily “Wait” has not changed. PDE weekly is a “Sell” and daily is a “Hold”, NE has the “Sell-if” and “Buy-if” for both its weekly and daily respectively, TDW weekly and daily are both “Sell” and MGLN weekly candlestick formation is still a “Hold” and Its daily is a “Wait”. With these signals the decision was to stay out of the market.

The US markets bled heavily last night. Threats of tighter monetary policy in China and increased bank regulation combined with a sell-the-news mentality to drop the stock market for its worst single-session percentage loss in nearly 12 weeks. NOV closed 3.35% down at $44.39, NE lost 1.52% to close at $43.30, DSX down 1.92% to close at $14.79, PDE lost 2.83% to close at $31.21 and MGLN lost 1.15% to close at $40.30. The KUTE system had correctly predicted and suggested to sell at lower target returns and stay out of the market for most of the selected stocks that are fundamentally strong. My positions are out-of-the-money and the worst stock I am still holding is Citigroup. I thought I saw light at the end of the tunnel but it is not to be.

Francies Cheng
BBus MAppliedFinance

Liverpool won but US markets lost

Good morning,

It’s red. The correlation between Liverpool Football Club and the US markets continues. Ever since the positive correlation curse of Liverpool was broken, the markets were performing very well while the Reds’ kept playing badly. They were not expected to play well last night but they won, and the US markets ended the opposite direction. I am happy that they have won, but it’s not very enjoyable seeing my trading screen in red.

I had a meeting with the Chinese commerce yesterday to explore the possibilities of conducting investment seminars to educate the public, and during the discussion it was suggested that I should invite a “feng shui” master to be part of the investment program. Their idea is to have the master giving the market direction for 2010. I am appalled when they said that we could draw in more participants if the topic is included. It disturbing when I was told that the attendance for the last “Feng Shui prediction for stock market 2010” talk was overwhelming but the only half the hall was filled in the same venue for market outlook conducted by an investment professional. Amazing, isn’t it? Why bother about “feng shui”? Just follow the fortune of Liverpool! Don’t take this suggestion seriously. Do your homework seriously to choose the right companies to trade and you cannot go wrong overtime. While Liverpool has won their game last night, the game for the trades I am in is far from over, and I believe it will end in the black soon.

I see last night decline as an opportunity to increase the 30% of my 30-20-50 money management rules. The markets’ bull momentum failed to carry over as global participants reacted negatively to news that China's authorities reportedly ordered some banks to curb lending in a move suggestive of tighter monetary policy. The order precedes the release of China's fourth quarter GDP numbers, so many have inferred that the report will feature a strong upside reading. While many are worried that the forced tightening will affect world economy recovery, I believe that the action is good for longer term growth stability. I was concerned about the real estate bubble in China and if the central government can control the situation, it should be better for us.

DJIA ended last night at 10,603.15, down 1.14%. KUTE had forecasted the market to be volatile this week and suggested to take profits at lower target returns. The recommendation was to stay away for most of the stocks since there were not buying signals for most of the stocks that were filtered for its fundamentals and financials. With most of the stocks in the red and closed below last Friday’s close, it’s time again to review the technical for buying signals for trading opportunities. NOV closed 2.44% down at $45.93. I entered to buy a new position at $45.98 since it was way below last Friday’s close and its daily candle is a buy confirmed signal. NE lost 0.99% to close at $43.97, PDE ended the session at $32.12, down 2.28%, and TDW closed 2.02 down at $50.33. I didn’t buy into these shares because NE and TDW prices were above last Friday’s close and PDE daily has yet indicate a buy signal.

As for DSX, the stock lost 3.27% to close at $15.08. Since the weekly signals have not change and its’ daily candle is a “wait”, I decided to include this stock in my 30% list and bought positions at $15.37 and $15.33. My positions are in the red but I am confident that I will make my money from this stock soon.

Have a great day.

Francies Cheng
BBus MAppliedFinance

My New Stock Trading Seminar Advertisement

Good morning,

I was really tired last night. Not from working too hard, but I was tired from playing more than 7 hours of mahjong last night with my wife and parent. I had intended to play till US markets open but my mum suggested that we continue. Since she had hardly step out of the house after her fall and operation last christmas, I agreed. With the continuation of the mahjong session, I missed the opening bell for the US markets. I was glad that I had market and limit orders for the stocks I have planned to buy and sell this week. My NOV stock I brought over from last Friday was squared at $46.52 during the time I was enjoying the game, with a handsome profit. My market orders for DSX was done at $15.72 and MGLN at $41.44.

US markets started the week in mixed fashion but steady stream of buying push DJIA to recover from last Friday's loss to close the session at 10,725.43. Citigroup posted its earnings report last night and its loss is in line with the expectation of the market. It ended the day at $35.40, up 3.51%.

The week started well for the stocks selected by KUTE. NOV gained 1.82% to close at $47.08, NE gained 1.55% to close at $44.41, DSX lost 3.11% to close at $15.59, TDW gained 2.33% to close at $51.37 and MGLN gained 0.65% to close at $41.92.

It's Wednesday and today is the first day of the year for my stock trading seminar advertisement. It will appear in the "Today" newspaper and I am really excited at the opportunity to share the KUTE system again. This is the advertisement that will appear today;

I look forward to seeing you in my seminar. Have a great day!

Francies Cheng
BBus MAppliedFinance

Boring night when US markets are closed

Good morning,

Last night was boring. It's US holiday so the markets are closed. My friends asked me last night why am I not trading the Singapore market instead. The reason is simple. I don't trade because I do not have the tools to filter through the companies to select the best companies to buy. I like large capitalized markets for KUTE to work, and the more efficient the market is the better is the selection of the stocks to trade.

It seems odd that I mention forecasting to generate alpha and market efficiency together in the same breath. Well, I do believe that US market is more efficient than my local stock exchange, and companies KUTE recommends are not against the efficiency theories. KUTE is not a system for selecting mis-priced shares. It is not easy since I am not an artist in applying the complicating formula to determine if the share is mis-priced. The permutation and methods for determining discount rates are many. No one can be more correct than the other for the discount rate to be used to calculate the share present value. Future projections of revenues, income statements, balance sheets and cashflows are subjective. An over-valued stock can be an under-valued to another believer.

KUTE only searches for companies with good business growth potential, stable and financial ly strong. If companies qualify under its stringent conditions, the companies' stock prices should appreciate over time, given the right macro environment. The system takes into consideration the reality of the price volatility along its growth path and current market particpants' behavior, and uses candlestick formations to understand the current strength of the bulls and bears to determine how they will affect the demand and supply of the shares. It uses cycle trend to understand the cycle of the share price since it is a well known fact that economies and markets have cycle and since companies' revenues do correlate with the economies.

The belief is that even if the technical are wrong, the companies are still good companies and with the correct money management rules, we can wait and allow for these companies share prices to achieve the targeted returns over time. Records so far shown they are less than a month to achieve the returns when the technical are wrong.

Have a great day!

Francies Cheng

BBus MAppliedFinance

Week of uncertainty

Good morning,

This is a new week for us to filter and decide which stocks to buy using the KUTE trading system. First let us evaluate the macro for the week. This week will be a shorter week as the US market will be closed on Monday. I am expecting this week to be tough, as there will be many earnings reports and results from the big financial companies will take centre stage. There will be more than 400 companies issuing their reports between Tuesday and Friday, two important housing reports on Tuesday from the National Association of Home Builders and the Commerce Department December report on housing start and building permits and the weekly oil inventories and jobless claims. The Cycle Trend weekly charting is indicating a downside decline potential but the weekly candlestick “buy-if” formation does not confirm the cycle trend direction. Considering these factors, I am expecting the markets to be trading with a broad range and my strategy for the week will be to buy and set limits at 10% for return targets.

The KUTE selected stocks for this week are: NOV, NE, PDE, TDW, DSX and MGLN. These are stocks that I have covered previously so I will only look into the technical for these shares.

NOV weekly cycle trend is indicating a flat direction but the candlestick formation is a “sell” signal. Since there are no definite buy signals, my tactical decision is to wait for intra-week’s weekly buying signals to decide if I will enter the market to trade this share. With the daily candlestick indicating a “buy-if”, I am hopeful that my existing NOV share will achieve its target this week. If it is done, I will decide if I will continue to trade this share.

NE, PDE, TDW have the same downside potential for its weekly cycle trend. The candlestick formations are “wait” for NE, “hold” for PDE and “sell-if” for TDW. Since there are no buying signals for these companies, I will not trade these stocks.

As for DSX, the weekly cycle trend is flat with a downside decline potential but its weekly candlestick is a “buy-if” formation. My decision for this stock is the same as NOV. MGLN is the only stock that I will be interested in this week since the weekly cycle trend is an upside advance and the weekly candlestick is a “hold”. The daily candlestick formation is a “wait”; I will wait for this stock to drop 0.5% to enter, in accordance with KUTE’s trading rules.

Have a great trading week.

Francies Cheng
BBus MAppliedFinance

Week's evaluation; DJIA was down for the week but my trades were up

Good morning,

It’s Saturday again to evaluate the performance of the stocks selected by KUTE.

DJIA last Friday’s close was 10,618.19 and we have expected the market to edge up on expected positive earnings. The strategy was to buy and sell at higher target returns. Well, stocks ended the week lower after disappointing report from JP Morgan last night at 10,609.65, down 0.08%. Before last night fall, DJIA Thursday’s close was 10,710.55 and the week’s high was 10,767.15. It was during these indexes high and most of the KUTE recommended stocks were squared at good profits.

NOV last Friday’s close was $47.11 and last night’s close was $46.24. The recommendation was to avoid this stock. During the week I had traded this stock when it had dipped way below last week’s close and made very good profits. I had another position opened at $45.95 and this position is in the money.

DOX last week’s close was $28.49 and the call was to avoid this share. It closed last night at $28.47. NE was $44.87, and there was no buy signal. It closed $43.73 last night. PDE was $33.86 and KUTE’s signals were bearish. It ended last night’s session at $32.78. DSX last week’s close was $16.09 and the KUTE’s technical suggested that it will be flat and the recommendation was to buy when there’s opportunities from observing the daily candle formations. It closed last night at $16.09. The week’s low for this share is $15.81 and had high of $16.62. I have bought and sold this share during the week because the candles were bullish and made very good money. RDC last week’s close was $25.25, the recommendation was to place orders at higher than previous close. The stock ended the session last night at $24.13. Its week’s high was $26.16 and low was $23.85. This stock was profitable for the trades I made; however, I still have a position bought at $24.68 that is out of the money. I bought another position at $24.08 and this position is in the money.

Have a great weekend and see you on Monday for the new KUTE selections.

Francies Cheng
BBus MAppliedFinance