Fed will most likely to cut a quarter point interest rate to 2% in this coming Fed Policy Meeting. May will be a crucial month in this trading year. Will it be a bearish month as sell in May go Away ?

From the technical point of view, if Dow can break above the 13k, and May is a bullish month then the market will most likely recover in the end of the year. If May happen to be sell off, then we have to see if there are any strength in the month of October. Finally the official start to admit that US is in Recession. This will be confirm by this week GDP data. If it is confirm that US in Recession, then there will be a mini roller coaster in the market. Well when people see it as bad news and react to the FEAR, I will be sitting sideline of short a few stock down and be ready to pick up value stock as the market fall by irrational fear.

This is because the stock market already price in for the recession. Economy always lag behind the market as the market predict the economy. Well anything can happen in the market so i shall trade with cautious.

Last week when the EUR/USD make the all time high, I was shorting it. This is because the Fed interest rate has been already so low. This means that after the .25 cut in this Wednesday, the Fed will most likely to hold the interest rate and thus the EUR/USD will be coming down as the Dollar will be bottom up and stable. I will be keep on monitoring the dollar as strong dollar will also boost up the economy and in turn boost up the market.

So if you do not know what to do with your money, please to not let the so call “Pro” to handle your money. The best person to handle your money is yourself. Invest in yourself so to invest smartly. You will be able to beat the inflation rate with the right set of education. Well it is better to put your money in the FD when you do not know how to invest your money. At the very least you will not lose too much money by parking your money in the bank.

Have Fun Making your money work for YOU.

January 22, 2008

Those of you have follow my blog regularly, you guys would have know the bear market is coming. A few months ago, I was shooting down the financial sector. I was careful on the strength of the technology sector. As i mention before, if the technology sector start to fall, the market will press the panic button.

Just some Warning !!!

Please do not catch the falling knife. This mean that if the market is falling down, please do not buy and think that it is a bargain especially if you wanna buy and hold for long term. When the market is falling down, there will be some bargain hunter and novices around to push up the downfall a bit, but the fall will be greater after the push. If you are not a day trader or swing trader, then you are most likely to be in risk.

Ride with the wave … if the market confirm to be a bear market, just shot all the way down. If you are not comfortable in shorting the stock, then park your money in somewhere safe (please do not park in gold or oil as they are already peaking) and wait till the end of bear market.

A bear market is always good for the whole economy since we already have 5 years bull market. A healthy market/ economy will go through many boom and recession.
Some sector that are recession proof are …

- Tobacco
- Health Care
- Consumer Staple
- Beverage and Alcohol

The market today is no longer investor market. It is rather a trader market with a lot of novices. Most of the big time investor either park their money in the bond, commodities or they just sitting sideline.

I suspect that the FED will cut the rate till 1% before holding the rates and eventually raise the interests rate. I will not be holding any short term trade and also stay away the market for a while.

Warning …

If you think that BLUE CHIP stock will eventually go up again … Think again …
Let say if the bear market take about 2 year to end and you need another 2 year of the bull market to make back your losses, you will need a total of 4 years. Well isn’t it better to cut losses now and ride will the bull market when it finally come .
Only loser will say that it is meant for long term investment and let their money losing value …
Take charge of your financial and admit that you have make a poor judgment and move on with it …
Only Winner will admit their mistake and use it as a strength to bounce back at a greater height.

Trade Safely and Trade well …
When is the time to Cut, Just Cut it …
The choice is with you …