Eric's Clock > Profit From Economic Cycles

Short - Intermediate Outlook of 2010

2010-06-16T17:35:00.000+08:00

DJ might retest 10,550 level before going further to top its previous high of 11,250. Otherwise a more severe correction will follow through to retest its lower level of 9,500 range.

Again, US & EU have the most influence to the world markets than China and other emerging markets. So when US sneeze, the rest will have greater change to catch flu. Hopefully not Swine-Flu.

Short-term to watch out: 15Jun - 15Jul 2010.

Intermediate-term to watch out: Sept - Nov 2010.

Best Trades at this economic condition: Best leading stocks with Innovative Technology, Superb Management or Outstanding Product/Market. Do not forget about Natural Gas, Silver/Titanium/Gold and Reverse ETFs too.

Correction / Crash?

2010-03-17T19:52:00.000+08:00

No doubt Q4-2009 and Q1-2010 had among the few Bumpiest Trends which I would called Correction. I guess alot of people are talking about Correction / Crash other than just Rally nowadays. The market is trying its best to pursue higher without stop taking any kind of possible catalyst to drive it.

Watch out between May - Oct 2010 for both Corrections & Crash, as the current market trend is building-up to get ready to burst it used-up all the remaining catalysts available since 2009. As usual, there would be several corrections combined together to form a great Crash.

DJIA

Near-Term Resistance level: 11,000

Top Resistance level: 12,000

Patented Trend of DJIA / SPX since 2007 Crash

2009-11-09T12:12:00.001+08:00

If you noticed the trend since 2007 till today, there Peak (upside) & Bottom (correction/crash) used to happen during Q4 - Q1. Both DJIA & SPX already up for >55% since Mac-2009, this acts as another obvious indicator that a correction of 20%-40% could happen in cumulatively from now onwards till reach the bottom probably in Q1-2010.

October-2009 Snapshot

2009-11-02T16:38:00.001+08:00

Date	Time (ET)	Statistic	For	Actual	Briefing Forecast	Market Expects	Prior
Oct 27	09:00 AM	Case-Shiller Home Price Index	Aug	-11.32%	-13.0%	-11.90%	-13.26%
Oct 27	10:00 AM	Consumer Confidence	Oct	47.7	52.6	53.5	53.4
Oct 28	08:30 AM	Durable Orders	Sep	1.0%	0.5%	1.0%	-2.6%
Oct 28	08:30 AM	Durable Orders ex Transportation	Sep	0.9%	0.1%	0.7%	-0.4%
Oct 28	10:00 AM	New Home Sales	Sep	402K	450K	440K	417K
Oct 28	10:30 AM	Crude Inventories	10/23	0.78M	NA	NA	1.31M
Oct 29	08:30 AM	Chain Deflator - Advance	Q3	0.8%	1.3%	1.4%	0.0%
Oct 29	08:30 AM	GDP - Advance	Q3	3.5%	2.5%	3.2%	-0.7%
Oct 29	08:30 AM	Initial Claims	10/24	530K	520K	525K	531K
Oct 29	08:30 AM	Continuing Claims	10/17	5797K	5890K	5905K	5945K
Oct 30	08:30 AM	Personal Income	Sep	0.0%	-0.2%	0.0%	0.1%
Oct 30	08:30 AM	Personal Spending	Sep	-0.5%	-0.7%	-0.5%	1.4%
Oct 30	08:30 AM	PCE Prices	Sep	-0.5%	-0.5%	-0.5%	-0.5%
Oct 30	08:30 AM	Core PCE Prices	Sep	0.1%	0.1%	0.2%	0.1%
Oct 30	08:30 AM	Employment Cost Index	Q3	0.4%	0.2%	0.4%	0.4%
Oct 30	09:45 AM	Chicago PMI	Oct	54.2	51.0	49.0	46.1
Oct 30	09:55 AM	Michigan Sentiment	Oct	70.6	70.3	70.0	69.4

Prediction from Top Few US Market-Timers (Experts)

2009-10-29T18:13:00.002+08:00

Gross, Roubini, Ritholtz and Smithers All Forecast a Correction

Bill Gross says assets are overvalued and the rally is over.

Nouriel Roubini - who called last year's crash - said last week that "a big crash is coming":

    There’s a huge bubble, because we have zero rates in the U.S., zero rates around the world and a huge carry trade. Everyone is borrowing at zero interest rates in dollars and getting a capital gain because the dollar is weakening, so they are borrowing at negative rates. And then they invest in risky assets:commodities, equities, credit. We’re creating a bigger bubble than before.

    It’s going to go crashing down, in an ugly way. That’s the basics of the argument...

    There is a wall of liquidity chasing assets. That liquidity can chase those assets higher for the time being until the huge carry trade—the asset bubble and the wall of liquidity—comes crashing down. You can still have all the risky assets going higher. Of course, the higher they go, the more they diverge from fundamentals, and the riskier the situation becomes. But eventually, if the recovery of the economy is going to be anemic, sub-par, below-trend and U-shaped, there is going to be a correction. And therefore my view is to stay away from risky assets. Stay in liquid assets. I don’t know when the correction is going to occur, it could be a while longer, but eventually it will be a pretty ugly correction, across many different asset classes.

Barry Ritholtz, who has been very bullish for some time, is now looking for a correction:

    I see a significant increase in the odds for a fairly substantial correction — in the 5 – 15% range — over the next 60 days.

    5 factors are making me more cautious:

        1) Over the past 4 days, we have had 3 failed rallies;

        2) The number of New Highs on the major indices is contracting;

        3) Stocks seem to be reacting far less enthusiastically to earnings beats then they had been;

        4) The Transports have been acting squirrelly lately;

        5) The S&P is forming an Ascending Wedge (more on this later today).

Here's the Ascending Wedge he's talking about.

And, as Bloomberg writes:

    The U.S. Standard & Poor’s 500 Index is about 40 percent overvalued and headed for a drop as central banks pull back on securities purchases that pushed up asset prices, according to economist Andrew Smithers.

Road Toward the Future of US

2009-10-28T16:20:00.002+08:00

Just to share this from someone well-known with credibility in USA.

1. Inflation will escalate over a period of 2 years.
2. Gold and Silver is all you can rely and it is the Elites currency
3. By 2012, the dollar will be dead.
4. Stock Market will go up, up, and up to ridiculous levels then crash.
5. Within 2 years everyone will be working for the government.
6. They want to narrow banks down to 9 major banks.
7. Opec is going to use a basket of currencies.
8. They altered timeline by the American people giving 2.5 trillion.
9. In 2 years, you will be so broke you cannot rebel against the government.
10. When you see more people in government, then time of collapse is near.
11. As the dollar decreases gold and stock market will go up.
12. When you see the dollar drop very rapidly the 2 year timeline is over.
13. Reserve currency status is being lost in the dollar and you will see the dollar lose it faster.

War
1. War is planned in 2 years involving Israel and Iran, then spread to entire world.

Church and the Devil’s Messiah
1. The elite have to remove America’s God to conquer the republic.
2. Elite are not talking about the antichrist when talking about the devil’s messiah.
3. Elite are talking about a system and a spirit of deception – Devil’s Messiah
4. Elite have cause to be people to think they are evolutionized animals.
5. People thinking they are animals causes human beings to act like animals (Evolution).
6. Elite caused churches to be federalized by deceiving pastors with the 501 C3 form (1967).
7. Fill out forms in church to find out personal information about people in church.
8. They fill out forms for Homeland Security.
Buzz Words are used in media from Elite for the Agenda
1. The war brought the country out of the depression.
2. Iran’s external enemy is Israel
3. Separation of Church and State.

Obama and Mccain
1. They wanted Mccain in office or at least this division of Elite wanted Mccain.
2. No matter which person won the election, they controlled both parties.
3. Obama is pushing their agenda, but they are not happy with him lately.
4. Obama is totally out of control by touching sore spots of Elite.

Nature of Economic Behavior

2009-09-30T22:19:00.003+08:00

There are several "Driving Forces" that influence/impact the market. Below is the natural and rightful trend...

Human -> Economic Indicators -> News -> Market Performance

This look alright but rethink again, the factors under Human Force would be Emotion that leads to various decisions/actions before causing the reading of Economic Indicators then Positive News before affecting the Market Performance.

But anything that is unjustifiable under any of the categories above will cause a mess/false-alarm. This is what we (at least myself and some others) are seeing now...

All the numbers published out there are either partially inaccurate or inappropriately calculated, such as the slight decreasing Monthly Unemployment Rate will not mean the Total Unemployment Rate is low (remember we are near the level of historical crashes).

Also anyone dare to say we found the Real Bottom of the crisis (Toxic Debt & Home Foreclosure) by providing the factual justification? Is the few trillions dollars are going to save the entire economy or else how much could it save then? Much more questions you may want to ask yourself from different perspectives but not from what you read from the mainstream news...

If the "Root Cause" is not finalised and found then fix it entirely, how the economy is going to recover fundamentally? What I am seeing now is that majority is influenced by the positive news (partially true / misleading) created by "Special Groups" of people and occasionally the main streamers will publish the articles based on the resulted market performance with their own perception / assumption.

I hope I could be wrong but one more powerful factor we should highly consider is the Reverse Psychology that always the Contrarian / Minority of people will benefit more than the majority of normal people in any market at any timing.

Projection: Another round of crash / serious correction should be in-place to wipe out all the speculated gains so far in order to ensure the economy is recovered fundamentally in steadiest pace. Let's watch out for the market performance in 5-6 months period till end of Q1-2010.

Wish all good luck and happy investing!

Possible correction is coming to us!

2009-06-23T11:04:00.000+08:00

As I mentioned in Q1-2009, there would be another round of correction in World Indexes due to unhealthy upside for the past 6-months. But this time the downside will be far better off than Q4-2008. So you may want to treat this as "Opportunity Time" since the long-term trend would still be upside.

What would we see in Q2-Q3 2009?
1. Oil < USD60
2. DJ < 7,500
3. HSI < 16,500
4. Gold < USD850
5. SGX < 2,000

Above are my rough-estimations only, of course the actual figures will vary. Hopefully my forecast is as accurate as possible in order to ensure my judgment in Investment is correct.

Guess WHOs?

2009-03-09T17:51:00.000+08:00

Looks like most of my guesses are realized, except HongKong & China indexes. Reason is very simple, there are more stable than US with limited impact due to total government support & effort.

Now, the question is WHO is the first one to hit the bottom and also to recover?
Answer: The Western & Eastern respectively. If DJIA (US) manages to hit 5,000 <-> 6000 bottom level, somehow major indexes around the world will surely follow accordingly including HSI (HK) & ShangHai (China) as well as the rest.

Then the other question is WHEN is the bottom and recovering period?
Answer: Around Q2-Q3, and Q3-Q4 respectively.

What is the best investment vehicle for 2009?
Answer: Of course not Saving Account / Fixed Deposit due to the extreme low level of return, but Stock is one of the recommended one although there are few more good options to go. But be careful on the selection process because this could be the Win or Die decision to make...

P/S: Will find free time to update again due to my extremely busy schedule.

Another RIGHTFUL Guess?

2008-10-27T16:08:00.004+08:00

Looks like our prophecy is correct again.

How about this time?

These are the estimated short-term bottom levels. Will the followings become realities?

HSI = <10,000
DJIA = <7500
China = <1300
STI = <1300
KLCI = <700
OIL = <60

Regardless the answer is YES / NO, we are currently nearing the bottom, but not at the bottom yet (i suppose).

Is the Bear Markets ending soon?

2008-10-08T02:08:00.003+08:00

Looks like some of my estimations are matched with the current market condition according to my previous post: Prophecy of our Economy (Jun-2008).

Current: Possible Turning Point:
DJIA is hovering 9,500 - 10,000 marks. Will it touch 8,000 - 9000 marks?
HSI is hovering 16,000 - 18,000 marks. Will it touch 15,000 marks?
KLCI is hovering 900-1,000 marks. Will it touch 800 marks?
CHINA is hovering 2,000 marks. Will it touch 1,800 marks?
STI is hovering 2,000 marks. Will it touch 1,800 marks?
many more......

What is going to happen next after Anniversary of Global Economy Turmoil (since Aug-2007)?

GOD knows...

Hope the Good Turning Point for the Global Economy could happen within 6 months or so.

Prophecy of our Economy

2008-06-27T01:24:00.006+08:00

By end of 2008, we will realized below descriptions are so familiar although we might think it is ridiculous. If we look backward on Oct - Nov 2007 that so called "Peak Time", we are actually in the direction of slipping from mountain toward sea.

Just curious how long or how soon we could reach the sea and move toward another hill to climb again.

Scenarios:
Dow Jones = <10,000
Hang Seng = < 20,000
KLCI (Malaysia) = < 1000
...
..
.
and many more , you just can easily name few...

The Global Sell-Off time is coming / already started months ago.

Let's wish we can fight thru such "Deep Impact"!

Oil Crisis?

2008-06-07T02:15:00.007+08:00

I guess most of us starts to feel the pain when oil exceeds $130 range, and starts to tightening the belt, it is not seat-belt sorry.

I am sure there is a common question about: Would the oil price will go down? If yes, when? If no, how?

I am not agreed with Perfection thus the oil price might go down till $100-$110 range by Q3 '08, if not Q4 '08.

The ceiling level for 2008 is $165 per barrel conservatively.

Lets see if my wish comes true...

Effect of US Market Trend in 2008

2008-01-15T23:27:00.002+08:00

Did you ever realized that the HK / China Index behave similarly as US prior to 2008; but opposite direction (behaves differently) 2008 onwards?

My guess is that we are now in the Transition period of China replacing US as the Driver of World Economy. However, this process might take quite a long time together with several rounds of adjustments by both Giant Economies.

So is that means HK / China market is now a better choice for investment rather than US?

The answer is: Yes and No. It is because the foreign funds are flowing from various places especially the Western. Any deep impact such as Major Sell-Off or Huge Correction in the US market would still affect the HK / China market, although small sell-off or minor correction might not give much impact.

No doubt there are always few market sectors that could bring you some gains during Volatility or even Bad Time......

Is Interest Rate Cut by US Federal useful?

2008-01-09T14:00:00.000+08:00

If Interest Rate cut happened, it means the Fed admits the fact the US economy is slowing down and will proceed to Recession (or US might already in initial stage).

If Interest Rate remain unchanged, the US economy will slowly downward as all the negative news might as well keep awakening the investors, people will start disappointed then transitioning to Recession.

If Interest Rate increased, the Properties will increasingly stuck due to decreasing buyers, Sub-prime Crisis will continuously spread widely, people will get disappointed, other type of debt crisis is going to happen as well then proceed to Recession.

So what US can do to avoid it's destiny from hitting any of the above? What a wonderful but tough question that Fed is still struggling on to Fix all the issues other than just Interest-Rate Cut...

2008 An Extremely Challenging year!

2008-01-04T21:52:00.001+08:00

If you think 2007 is a volatile year, then 2008 is a tougher and bumpy year. We are going to ride several rounds of 360 degrees of upside-down roller coaster soon.

The possible destiny for 2008 would be as any of below:
1. The final year for us to grab the fruits (last bull year of century); or
2. The year with full of uncertainties bundled with various bad news (swinging mood for investors); or
3. The year the stock market(s) start to slow down (people start panic / curious / worry); or
4. The year the stock market(s) start to crash (people start admitting the fact - too late).

Overall, 2009 would be the worst year if not 2008 or else do wish me I'm wrong...

Are you ready...?

Had you tightened up your seat-belt?

Stay tuned......

2007 YOY Performance of Economic Director

2008-01-04T00:44:00.000+08:00

Jan: +6%
Feb: +10%
Mac: +5%
Apr: +4%
May: +1%
Jun: +5%
Jul: +11%
Aug: 0%
Sep: +12%
Oct: +8%
Nov: -1%
Dec : +4%

Total Return: 65% (Year On Year)

2006 YOY Performance of Economic Director

2008-01-04T00:10:00.000+08:00

Jan: +4%
Feb: +3%
Mac: +7%
Apr: +8%
May: -3%
Jun: +4%
July: +3%
Aug: 0%
Sep: -2%
Oct: +5%
Nov: +6%
Dec: 0%

Total Return: 35% (Year On Year)

What are Economic Director and Investment Timer?

2008-01-03T23:55:00.001+08:00

Challenging yourself to achieve better profit every year is a tough but fun. 2006 is the year where my investment portfolio kicked start. I use various resources and tool as well as a little of my 6th Sense (funny huh?!) to determine the direction of my investment portfolio every time.

Economic Director (ED) => as a performance index I used to represent my own investment portfolio for benchmark against others.

Investment Timer (IT) => as the indicator to determine the investment vehicle(s) that generate better return on specific region at particular time frame.

I am a medium risk-factor investor as general thus the involvement in stocks is minimal or none in order to achieve Capital Preservation and Profit Maximization across the economy cycle regardless the market condition.

This is a very tough challenge and it seems to be either too difficult or almost impossible to achieve it, at least for an investor as me. That's the reason I just started to share my view here and the information is just for reference or view exchange only.

This site might not interest you if you are not the same type of investor as me. Furthermore, I am just an ordinary Malaysian Investor and I am still learning as most investors did.

Happy Investing!