Good Morning,

WOW! The first word that came out from my mouth when I took a look at my Telequote screen
this morning. The DOW was slammed down by 223pts + NASDAQ losing near 50pts while the S&P
caved in 26pts.

The reasons were Stocks tumbled Thursday, with the Dow losing 212 points, after a worse-than-expected jobs report hammered hopes that the economy is close to stabilizing. The Dow Jones industrial average (INDU) fell 212 points, or 2.5%. The S&P 500 (SPX) index lost 27 points, or 2.9% and the Nasdaq (COMP) fell 49 points, or 2.7%.

The New York Stock Exchange extended trading until 4:15 p.m. ET, so as to allow customers to put through orders that were impacted by system irregularities. The NYSE did not specify what the irregularities were.

Stocks tumbled at the open and remained in the red throughout the session as investors considered the broader implications of the dismal June jobs report. So with the market this bad, would you be shorting the stock market today?

If you believe in market signals and manupilation, then it shouldn’t have surprise you for the selling of the DOW last night as you can see that all the Asia markets gapped up on open yesterday after seeing the DOW on the previous night, gaining 56points. But once the gapped up, everything is PRICED-IN. So profit taking resume into the market and you can see that many stocks across the region, traded higher in the morning and then traded lower towards the end of the day. Even our local Blue Chips did the same thing like DBS, hit an intraday high of $12.02 before succumbing down to $11.66, UOB hit a high of $14.76 before slamming down
to $14.40 low or like SGX hitting $7.28 high then sold off to $7.08 low, etc.

So did the Big Boys knew about the Unemployment Numbers before the US market released it last night or was it mearly speculation/jitteries towards the release of the figures or just co incidental?

Trading and training the market for more than a decade, I would put my chips to say the first explanation should be the most possible one but of course, this is my personal discretional viewership of the event and I cannot really prove it but I know and I believe those who traded long enough, might just share the same view with me.

Did we anticipated it then? To be honest, other than shorting the SIMSCI Future, we didn’t do any shorting on the stocks and matter of fact, we actually bought 3 stocks, Ezion, YZJ and Yanlord. And we did profited alittle from it. 

The Crude Oil market, at the moment is receiving some beating by the speculators thus temporarily, we are not touching the oil sector stocks yet until the Crude starts to form a support base.

The market should be moving towards the China Related Sector as Shanghai Index have just broke
past the critical 3000 psychological mark and if you look at this history of this market with the rest of the Asia market, the former was the dragon leader that spearhead the Asian markets rally in March 2007 before its peak in mid Oct of the same year which later we saw the rest of the markets following suit.

The World Economy has not recovered yet and the answer is for sure. With so many companies begining to take the same measurement of retrenching people, like what the Big Boys companies did, more people will be outside looking for jobs and that will cause a temporarily hold on the growth side BUT looking at it from a positive angle, that mean that once these people found a job and start to re contribute to the society, the economy will boomed. The stock market always move ahead of the real economy thus that’s why you have seen the Dow crashing down to 6500 from 11,000 (the start of the identification of the financial crisis) before the market actually see the problem. But now, if you look at it, the Dow is now at 8200, or more than 20% from the low already. The market always sell ahead and buy ahead too!

So there are 2 views at the moment, to expect a steeper correction from here OR expecting the worst is over and continue to go up. That’s the million dollar question and if you were to ask me, my choice is the latter. I have been calling a bottom for the stock market since early march 2009. (See the Blog Archives).

The market need A CATALYST to bring up the entire market UP and I suspect that catalyst will be the CHINESE market. If China can defy gravity and recover first from this economical slump then I am very sure the rest of the Asia market will follow and this will inturn bring up the US economy. The sexy story have changed its tune. I don’t think one should be focusing on the US economy now but the China market instead.

That’s why you can see that I am looking at China related companies like MIDAS, Epure, Yanlord
and Yang Zi Jiang recently.

I am a strategic trader so once I see that whicher sector is moving or have the potential, I will move and I hope you can share the same view with me. So now while waiting for the Oil market to recover, I will encourage the traders/investors to look at good China related stocks first and once we see Crude Oil going back to US$70, then we can return back to the Oil stocks
or you can wait for each correction on the Oil price then load on the oil related counters.

I am still very bullish in Crude Oil and still target it to hit US$90/barrel by this year while Shanghai market to hit 3500 also by this year and STI to hit 2800 while Dow to reach back to 9500.Sound overly optimistic or incredile to believe…well… we have 6months to see…( This will be left as a record)

Stocks to watch – Long Candidates

(1) EPURE    : May hit 53cents in the near term
(2) EZION    : May hit 60cents in the near term
(3) YZJ      : May hit 80.5 cents in the near term
(4) Yanlord  : May hit 2.62 in the near term
(5) MIDAS    : May hit 82cents in the near term
Nothing is 100%. Disclaimer as usual

Cheers!

Kelvin Han
Chief Trainer of V3Go Mentoring Program

Amazed by our stock picking and trading methodologies? We are conducting our DIFF Workshop this coming weekend so if you are interested and wish to know more, contact V3Go Trainer, Mr Herman at  97… for more details or you can email us at sales@v3go.net and we will assist you with the information that you need via writing. See you!!!