Good morning,
There was this article that highlighted that in Jan 2009, the stock market surged upon the beginning of the year but ended the month in the red. The article suggested that it will happen again and cautioned its readers not to be too optimistic after the markets surged yesterday. I wish it is so easy to predict the market by correlating events, and if it is so, I will be busy looking at woman’s skirts, since there is this correlating theory suggesting that the stock markets are highly correlated to the length of the skirts. Well, DJIA didn’t continue its advancement last night, and ended the session with 0.09% decline to 10,506, but I am not too worried that the article’s prophecy will come true. One of the key reasons is the yield curve which I have mentioned in my blog 2 days ago. The macro environment is not the same as it was 12 months ago, and with the expected correction due because the Fed will need to increase its interest rate this year, I do not see any tailed-end events that could cause another meltdown this year. I believe it will be more productive and profitable if I were to spend more time understanding the companies’ earnings and its revenue growth than to idle around and look at woman’s skirt. (smile)
DSX’s candle indicated a “BUY-IF” daily signal last night before the markets open. What should we do to position ourselves when we see this signal? According to the rules of candle, a BUY-IF signal is confirmed and turns into a BUY CONFIRMED signal by one of the following conditions;
The week opens with an upward gap (an opening price above the previous week’s close) signaling a bullish sentiment. The benchmark is the opening price. A confirmation is valid if the week’s prices stay over this benchmark. The pattern of this confirmation can be defined as a weekly white candlestick with an upward gap, or;
The week opens at a level either equal to or below the previous week’s close. The benchmark is the closing price of the previous week. A confirmation is valid if the week’s prices stay over this benchmark. The pattern of this confirmation can be defined as a white weekly candlestick closing above the previous close, or;
The week opens with a big downward gap (an opening price way below the previous week’s close) suggesting a very bearish week in this rarely observed case. However, the prices turn up and ended with a long white weekly candlestick but still closing below the previous week’s close. The benchmark is the closing price of the long white candlestick. The pattern of this confirmation can be defined as a long white weekly candlestick closing below the previous week’s close. If one of these conditions is not satisfied, the BUY-IF alert remains valid without confirmation and three confirmation criteria are sought in the following week. The only exception is a long black weekly candlestick which makes the signal void and invalid automatically without further search. If there is still no confirmation in the following week, the alerts turn to be void and invalid regardless of the following week’s pattern and the search is terminated. DSX started the session fulfilling one of the rules and ended the session with another 3.33% gain to close at $15.82.
For the rest of the KUTE selected stocks, NOV gained 1.74% to close at $46.89, PTI was up 0.72% to close at $20.84, PDE up 0.15% to close at $32.83, NE up 3.22% to close at $43.58 and CAB lost 1.08% to close at $14.69. All my KUTE positions are in the money and I am also beginning to see light at the end of tunnel for Citigroup and hopefully the light will become stronger and justify my wrong call for this stock purchased out of the scope of KUTE.
Have a great day!
Francies Cheng
BBus MAppliedFinance
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