Speculation

Speculation is one of the most interesting thing, and also the most dangerous process. I am not sure whether this is losing competition in share market. If there is, undoubtedly, I will be a good candidate. I am able to lose money very efficiently by wild speculations.

Yesterday, 2 Fs does little impact on dollar, commodity. Instead, the trend continued.
Australia dollar is heading to 80 cents.

2 Fs should not be touched, its price is on verge of collapse. There is no value left for the 2 shares. Actually it is the same as bankrupt.

Commodity price

Share market is in whipsaws. Australian market has been consolidating at the range of 4900-5200 for around 2 months. Today, financial shares moved higher sharply. The only sector is lagging behind is material.

US dollar has been unprecedentedly strong in the last one and half months. Causing gold falling from 980 to 810, oil from 148 to 108 now, Australia dollar diving from 0.97 to 0.82.

I feel with Fannie, Freddie takeover new, commodity and energy price would be rebounding quickly as well as Australia dollar. This will end crazy period in the last 2 months in terms of commodity and FX exchange.

Today, US share market will have around 2% gain. Not sure whether this would mean a temp relieve of bear market, at least a decent rebound for a while?

What is dragging share market lower, unemployment figure, mortgage crisis, high oil price. All of them seem to have a good answer. There is no fresh bad news.

In the long term of run, I don't believe material sector will be performing well. It lacks fundamental support/urge to push commodity price higher. Demand from China will be shrinking. Real estate market in China is facing similar problem, price of real estate property is dropping.

Fundamental or Technical

For share investment, fundamental and technical analysis are 2 ways for studying markets. Applying one of them without considering the other is dangerous, at least not efficient. This is just method, possibly this is the most unimportant part for trading. Many times, it is human emotions control share price up and down, not from the fundamental. One saying is 'the market is always right', the other saying might be more accurate, 'the market is always wrong'. If market is always right, why there is always sharp share price movement every day. 2 analysis should not violate each other. Fundamental should be the core to consider, technical analysis should be more concentrating on timing and money management or if wrong, what I do. Stick to the company study, or run away.

On the other hand, it is money management or discipline that separate winners from loser. Does it mean, if you randomly select share, long or short, as far as you are following your money management rule, you can earn money as well. No, it may just mean you can survive in the dark forest with hungry wolves. It does not mean you are the top killer or hunter.

Compounding rate is the most amazing thing in the world, but consistently achieving this is so hard. Most people, including me will lose substantially in the first year or two in market. Most people will never come back. Reading book is only the first step, control yourself, or mind is the core part in success. Now, share trading will become one of core topic in my blog. Let it get started. Have a goal, have confidence,

Short selling - ALL

Today, ASX and DOW reached all time high again. The bull trend continues, a share might be worth selling. That is ALL, this is from technical point of view.

A good short selling candidate. the trend is turning south.
Stop loss 15.5, current price is 14.87.
Let make the sell order tomorrow morning, at open price, and see what would happen.

A few worst shares (1) - CMQ

Rapid up, rapid down, Chemeqs is to focus on the profitable commercialisation of its CHEMEQ polymeric antimicrobial in targeted global markets.
When it was falling down, it had so many stories, what is fundamental. Good future or bad future?

Good on future, bad on profit. It was a hot company in Australia Company, ever listed in ASX200, now it is worth 9 cents, it was 8 dollars. Sorry, I am bright for future, but now I can't make any money.

Macquarie Bank

7 years, ago back to 2000, Macquarie bank net profit is less than A$0.25 billion, now it it is A$1.5 billion. 6 times higher in 7 years.

From 2006 to 2007, it increased its profit by 50%. Thanks to limited competition in Australia, Macquaire exposed to airports, toll roads and utilities, also by selling public offerings of shares and move them into managed funds. Its income is rising so rapidly as well as its boss Allan Moss's payment, who is Australian's highest paid executive with annual salary of $33Million.

XAO, australian index at 6300

XAO, Australia share index, closed at 6300. From last year end of Sep to now, index climbed up more than 20%, there is only one correction in Feb and it recovered quickly.

It is not trader's business to predict, trader's business is to follow the trading plan. The big trend is still up.

So, in such situation, what is your plan. Reduce holding, preparing for short selling... Below is Dow's chart for the last 5 years, increased by 30%+.