WSJ: Job Market Picks Up, but Slowly

This is the most important data I’m waiting for to support the bullishness of the market. With global market doing well, STI will have to go higher.

From WSJ

The job market is showing signs of life, though its slow recovery suggests unemployment will remain high for years to come.

Employers added 162,000 jobs in March, the biggest monthly gain in three years, with one-third of the growth coming from the government’s hiring of 48,000 temporary workers for the 2010 Census. Despite those gains, the jobless rate held steady at 9.7% as new workers entered the job market and people who had previously quit the labor force returned.

The average length of unemployment rose last month to the highest point since record keeping began in 1948: more than 31 weeks. The number of workers out of work for six months or more rose sharply.

The latest report, which marks the third month since November in which payrolls increased, indicates the labor market is pulling out of a deep downturn that slashed more than eight million jobs since the recession hit in late 2007.

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Pre-empt those “sell in may and go away?”

Will seasonal factor work this time round? Those who sold their shares last May had a heart pain seeing the market go all the way up. But that may be because the world economy just happen to rebound from a recession. And hence it is very compelling for people to buy no matter what happens.

But now after a good whole year of run, stock has become expensive. And hence the compelling reason to buy stock will not be there. So this may, what will happen?

From MarketWatch
Should you try to get a head start on those who are planning “sell in May and go away?”

If so, then you will be looking for an opportunity to sell your stocks in April and go to cash, thereby beating the many investors who will instead wait until a month from now.

But before you rush to sell everything, bear in mind that the odds of success are quite low. Stock market timers in general have very poor success rates, rarely doing better over the long term than simply buying and holding. Why would we think that they can do any better timing their entries and exits in October and April than in any other month of the year?

Well, the proof of the pudding is in the eating.

And over the past eight years, one of the two market timing services that I monitor that regularly second-guess the “Sell in May and Go Away” system has significantly increased that seasonal pattern’s performance. While the other one has not improved on the Halloween Indicator, it at least hasn’t done appreciably worse — and has still beaten a buy-and-hold strategy.

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Chart: Bottom fishing play

Counters to watch out for 5-9 April. Lets hope STI will continue to push past its resistance.

20100403 sgx chart

20100403 biosensors chart

From Zaobao
这股票于08年元月21日虽然一度回升至1.10元，可是仍然摆脱不了本栏于2007年11月13日所预估股价一旦跌穿0.58元，则将有更大的跌幅。果然，股价过后于2008年7月4日跌穿此价位，接着于2008年10月16日，28日及31日三度下试0.225元，随即以三波回升。今年元月19日股价一度升试0.90元，并于当天以“一日转向”讯号进入调整。截至今年3月31日股价已下试0.69元，由于每周一杆图已呈式微，短期回扯充其量也只能填补介于0.835元至0.84元间的缺口，过后当跌穿0.575元的支撑线了。

20100403 tat hong chart

20100403 otto marine chart

Video: Cramer on when value investing won’t work

From CNBC:
When the Dow’s come down thousands of points in a matter of months, listening to some guy on TV telling you that this or that stock is cheap is going to get you killed, Cramer said. A lot of stocks look cheap after the market’s taken such a beating, but that doesn’t make them so. Besides, you know what happens to stocks that look cheap in an ugly market? They tend to get even cheaper.

Alert: UNG breakout

United States Natural Gas Fund (NYSE:UNG) is breaking out from making a move up ever since it drop from USD 64 to USD 7.35, with various indicators such as Stochastic, RSI, MFI and MACD at oversold region. MACD histogram and RSI is showing bullish divergence. ADX is showing bear is losing strength. Support is at $6.90 and major support turn resistance is at $8.50.

ung downtrend breakout

From ETFDB

March was one of the best months in recent memory for most investors. Equity markets surged on renewed consumer confidence and continued strong demand from emerging markets. The ETFdb 60 Index, a benchmark measuring the performance of asset classes available through ETFs, climbed 3% during the month, an impressive gain that was held in check by the significant bond allocation in the index.

But not all asset classes enjoyed a March to remember. Fixed income investments were relatively flat, while some broad-based commodity funds inched lower. And few funds have ever turned in a monthly performance worse than the United States Natural Gas Fund (UNG) did in March. Investors in UNG checking their accounts today will see that the fund slid by more than 20% during the month of March. And unfortunately, that big red number is no April Fool’s Day gag.
Behind The Freefall

So how did UNG lose 20% in just 23 trading days? Surprisingly, the usual suspect wasn’t to blame this time.

UNG implements a futures-based strategy to accomplish its objective of tracking changes in the price of natural gas. As such, the fund’s value is impacted by three factors: 1) changes in the spot price of natural gas, 2) the “roll yield” incurred or earned when expiring contracts are exchanged for next-month contracts, and 3) interest earned on uninvested cash. UNG became a case study in contango last year, as the second of these became the dominant factor in the fund’s returns. Natural gas prices finished 2009 about where they started, but UNG lost more than 50% of its value (see What’s Wrong With UNG?).

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Major double top for STI

Yesterday STI had a quick sell down of 45 points from the top. It signify a possible formation of double top. Many investors had started taking profit on Thursday in anticipation of the long weekend. It is also this coming week the report for US employment data will be out. I would recommend taking some profit off table.

STI had a gap at 2795-2808 which has yet to be filled. Will it be filled this time round? But it means the index will need to move back by 80+ point from the current level. I saw many stock at resistance with bearish divergence in RSI, Stochastic and MACD. This run up might be losing steam.

Marine sector had a major leg up the past 1 month or so. Hence this sector will be more susceptible to a heavier trackback to the support.

Ireland might default

From MarketWatch

LONDON (MarketWatch) — Fears that Ireland’s banking woes will send the Emerald Isle the way of Iceland has sent the cost of insuring sovereign Irish debt against default to record levels.

Spreads on Ireland’s five-year credit default swaps rose to a record 377 basis points on Friday, analysts said. That means it would cost $377,000 a year to insure a notional $10 million of debt against default. That’s up from around just $24,000 a year ago.

Japan Tankan Survey May Show Fourth Straight Rise in Sentiment

March 31 (Bloomberg)

The Bank of Japan’s Tankan survey will probably show that business sentiment improved for a fourth straight quarter, approaching levels before the global financial crisis intensified 18 months ago.

The Tankan index of sentiment among large manufacturers will climb 11 points to minus 14 in March, according to the median forecast of 23 economists surveyed by Bloomberg News. A negative number means pessimists outnumber optimists.

Companies including Toshiba Corp. are investing again, a sign that companies have recovered from global fallout spurred by Lehman Brothers Holdings Inc.’s collapse in September 2008. Signs of improvement may persuade central bank Governor Masaaki Shirakawa and his policy board to hold off on easing policy next week after already doubling a credit program to banks in March.

“Concerns over a double-dip recession have receded considerably and corporate profits have turned up on export growth, which has improved business confidence,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo and a former Bank of Japan official. “The Tankan could be used by the BOJ as evidence that the real economy is solid, if it’s asked to undertake more monetary easing.”

Prime Minister Yukio Hatoyama’s government has repeatedly called on the central bank to help stem deflation that threatens to stunt the nation’s recovery from its worst postwar recession.

Seems like all asian are ready for a stronger recovery in 2010. Will Japan lead us towards expansion?

Daily alert

Counters with possible exception price movement:
Midas
Sinotel
NOL
Hengxin
Suntecreit
CAO
Yanlord
Ziwo

Improve trading using different timing of chart

Using different timing of a chart can greatly improve your timing and performance for trading. Convergence of 5min, 15min, hourly chart etc can prove that the initial hypothesis is right and ripe for entry.

As a trend trader, I often ignore charts of different timing except just by looking at the daily chart. But it seems that aggregation of data filter out the important information. And to be a true trader, it just seems like daily chart is not enough.

One example for the use of different timing is bottom fishing play. One can use the daily chart to plot the entry, stop loss and exit point. And then use 5 min, 15 min and hourly chart to confirm that the volume is truly diminishing, which imply the selling volume has died down.

– The Trader –