Apr-30 Brazil ALL TIME HIGH!

I apologize as I can't help myself for not BSO this time about Brazilian sector. After S&P upgraded Brazil investment rating just about an hour ago, the equity market of this country surged to all time high. I am so exciting as there are so many stocks in my pick list are Brazilian stocks and I just recommended EWZ on MSN group 2 days ago, also, there have been numerous times of recommendation on this mailing list and blog as well. Just check the great names below: ARA, CPL, PBR, RIO, SID. I hope you've bought some Brazilian stocks in your portfolio, if not, no worry, any future dips will be good opportunities and I would expect correction is coming next week. :)

Apr-30 FOMC Strategy Today

I guess many of you are expect this message, but I cannot say anything until now.

There have been 100 points spike for DOW today, so now my strategy would be keeping 1/3-1/2 of your long position, or adding hedging position to you account because of reasons below:

• After FOMC, it is VERY possible to hit 13000, even 13100, then sell-off comes, or otherwise, it holds above 13000. If 13000 holds until 3:45, huge number of buyers will step into around the last 15 minutes, you can also be one of them. Hong Kong, Indian stocks can be your targets.
• It is also very possible to hit below 12800, so buy something to wait for an immediate rebound to sell it if you can do DT. If you see indices come back later, you can also buy back H-share ADRs after 3:45, otherwise, just let it be.
• 13600 is critical support for this uptrend, reduce another 1/4 if this is broken in next days.

To me, I still tend to be bullish in the next 1-2 months, while we need to be prepared for all circumstances. If you are comfortable with your current long position which is not heavy, just sit back and relax. Most time, do nothing is the best strategy.

Apr-30 Recession?

OK, we have been in "recession" for about two quarters, said by many Wall Street genius, however, main street morons successfully posted two quarters with GDP in positive territory. What a joke!

Please understand that GDP is not the only criteria to measure recession or not, in fact, it does not really matter to us. What we need to do is to pick up good stocks in next few months, and it's done. Such as, let's check, CAF is trading at 48 before market, up 33% when I called on 13th March and A share still looks strong. Many people asked me whether to jump in CAF now, I guess it will still rise in next trading day but will correct in the near future, wait for that dip and jump in.

Many people also asked me about agricultural stocks, I even consider to stop my coverage as I found there are too many people want to buy stocks in this sector so I think it might be the time to stay away. Let's wait for a few days to see what's going on.

Apr-29 New Pick [ZNH] with comments on oil and airliners

I would like to start my coverage on ZNH and put this stock into my pick list with price $32.25 for reasons below:

• Different from world airliners, Chinese ones can benefit from the exchange rate and controlled oil price in China.
• The oil price looks like will have a correction in the near future and lifts the whole airline sector.
• There will be a huge explosion on routes to China brought by Olympics.
  
• China local demand is quite high and is expected to continue.
• Low PE; high growth; oversold.
  

Stop loss is quite simple, recent low on around 29 with -10% stop limit, or the USD spikes big against RMB in next 2 months.

Apr-29 Following Master

Buffet has made his selection on a food processing company, and I think following the master is a simple but smart way to do personal investments. I thought food processing would be a good investment direction so I recommended WBD months ago and this stock is now in good shape. Today I would like to introduce ADM and CZZ as my new recommendations to extend my coverage in this sector. However, I am not going to put them into my pick list now as I need more time to inspect these stocks. It does not mean ADM and CZZ will underperform WBD. I think at least they could be put into your watch list for a closer view.

Apr-28 A New Week

It looks like the bullish sentiment continues to rate cut. The day after tomorrow will be a key day for short term market. Below is my analysis:

• If today and tomorrow have significant gains, I bet big money will dump stocks whatever the rate cut the desicion will be.
• If today and tomorrow go sideways or down a bit, I think it is still bullish.

To me, I expect this wave continues to end of May or early June, but I still need more evidence. In fact, we see the company earnings are not that bad, I hope the two oil giants can report good earnings to lift DOW. It is possible to see DOW13200 with NAZ 2500 within in May.

Apr-25 Back from shopping

I just came back from shopping and I see there is little people shopping on Friday. In outlet near Stuttgart, most consumers come from outside of Germany. I see less customer compare to previous years and more discounts. For example, the wallet I bought for my father in law has another 60% discount on previous price... :( In all, I really see the EU-US economy is in recession, at least much weaker than late 2006 and early 2007.

I don't want to tell people that we are in a bull market, please assume we are in a middle term rebound. A strategy for DOW going over 13000 is quite simple: reduce 20% of your position on each gain of 100 points on DOW, and cut most of your long position if DOW dips below 13000. Now it's time to gradually accumulate gold. Buy ABX or GG every month in dips starting in May and ends in August, perhaps just a very small number of shares each time based on your account. I doubt if gold will dip below 850 - you can simply use this as stop loss.

Still, I am bullish on A and H share in next 1-2 months.

Apr-24 Struggling?

I think many of you are struggle on whether to sell CAF now as we have around 30% again now based on pre-market. For stock like CAF, you know have ER to spike, so I think it is always better to hold for a decided target and wait for another chance. Nobody knows how A share market will act tomorrow, but most people believes the rebound will be over 4000. To my personal opinion, a gap-filling is possible in next week but I hold for target 4800 for Shanghai Index. The reason is simple, the gvmt wants the stock to rise before Olympics to show the strength of Chinese economy. 3000 is confirmed bottom, for those still are out of the boat, jump in when Shanghai fills the today's gap. However, feel free to take some profit off the table if you are heavily loaded.

For Hong Kong market, I just like the way it rises little but H shares spike with A share. Indeed, H shares with quite low PE which does not look like an emerging market. Be steady, watch stocks that didn't spike yet, such as CHU, CN, CHA for the next round.

Apr-23 Chine stocks fly

Glad to see all H shares fly! I mentioned PTR and LFC around morning the day before yesterday, and you have seen the short term big swing up, as several rounds of good news.

CAF also shines. The reason I initiated my coverage of this company as I supposed CAF will not drop further because it is not an ETF, it is a US company that invests A share market. There is no surprise that Morgan Stanley is one of the first big sharks getting out of the market at peak around 6200. I also believe they have been accumulating shares since Shanghai Index dropped below 4000. That's why it did not drop much with A share market but follows US market instead, but now I think they can be influenced by this A share rebound, given many actions from gvmt to save the market.

Apr-22 Picking Stocks

Glad to see PTR is doing good in Hong Kong. Regarding my recent recommendation on TTM and PTNR, they are typically long term investment candidates. If I pick up short term ones such as PTR, it may go up in next days, but it will be volitale anyway. As I still think CEO is better than PTR in terms of long term investment potential, therefore I don't put PTR in my pick list. I usually put one stock I think might be the best in their small sector in my pick list. For example, I pick RIO, so I don't add BHP, but it does not mean BHP is bad; I pick ARA but not VCP for the same reason, and we can see ARA is better than VCP in the past months.

I have already updated my spreadsheets for a more clear view against S&P 500 in the same period. I hope you pay more attention to my picks and research on them. I would response generally better than stocks that I don't cover as I know these stocks better.

http://spreadsheets.google.com/pub?key=pBEpQGqpmvIg-8DjD4quaQw

Please also let me know individually (without going to group message) of your interested stocks for long term holding, I'll investigate and comment on them and select among them to add to my picks.

Apr-21 Earnings

BAC reports an ugly ER but price does not dip much. The overall market seeks a correction to 12650-12700 area, let's see if this level can be hold.

More interestingly, we have a lot of other earnings coming around. Let see some of them for today and tomorrow morning.

For today, TXN report might be positive. For tomorrow, MCD and DD would be positive as well. T might be somehow negative. This is quite FA based. If today closes red, the post-ER action would be somehow normal, which is, if it beats, the share will go up, otherwise, go down.

By the way, PTR is in good shape, as well as LFC.

Apr-18 Remarks for mid-term

Like C, the banks are going to post upbeat results as the estimates have been cut significantly. I have talked about this before as a point of money makers strategy on supporting the market recovery. We will see some other evidence later. Several remarks are quite important for mid-term in next months:

• It is quite important to close above 12800 either today or next week to form bullish pattern and trigger institutional buying power. If not, I need to think carefully about the market.
  
• There will be another remaining issues for this sub-prime mortgage crisis, while market will have further correction after June.
• For financial stocks, I recommend BX and V two weeks ago and they are in good shape now. Besides, C is going to test 30 in near term, BAC will follow and they will help to bring up DOW over 13000.
• Brazil is really outperform this round and will outperform for another months, I believe China and India markets will follow up later therefore I think now it is a buy-and-hold point for stocks and funds for China and India markets.

Good luck!

Apr-17 New Picks [TTM] and [PTNR]

TTM has both swing and long term holding potential. For several months swing, I would say current price around 15.5 is a buying point with target 18 and stop loss 52 week low of 14.71. Risk is quite limited. TATA group just purchased Jaguar and Land Rover from Ford, I would say for long term holding, it is also a good choice. PE 12 is somehow low for a BRIC country, I hope to see PE 15 some points this year.

PTNR is a Isareal telecommunication company. Recently mid-east countries began to realize they can not rely on oil forever, the other aspects of their economy is booming. Although PNTR is not an Abrabian company but I would say it could still benefit from booming of cities in UAE and Aman.This is a long term holding for over 1 year.

Apr-16 Short Comments

Dow tested 12270 low and now rises back to 12600 area. I predicted the correct to 12300-12400 area was not that wrong and the indices all bounce back now. Glad to see that. You may also find many stocks on my pick list, such as SID GTI RIO MOS MTL CPL ANR are now or near their all time high.

I said never stay on the short side on strong stocks for a long time - it is fine if you do several days swing if you can, but it is always risky to stay for a long time. It might be the truth that agricultural stocks are near their climax run and due for correction, but nobody knows WHEN. Please be very careful, in particular, if you play options. Stop your short position in any future correction...

I am not sure if my recent buy and hold strategy works for you, but it at least works for me.

Apr-15 Short Notice from Spain

Dow is now around 12300 as I expected for this correction. I hope all major indexes could move up and DOW could break 12800 to form a higher high pattern and maintains bullish trend.

If you have bought airline stocks as I recommend, for example NWA around 8$, you can be quite profitable now and even better today after the M&A news from Delta and Northwest. In fact, I could not predict M&A, the airline stocks are just too low to drop further. It was perhaps the worst time for airliners, and it could be the best buying opportunity for this sector in recent years. Please, please do not forget to by on weakness.

Will be back on 17th, ttyl.

Apr-9 Market Updates

I talked about the target of this correction in DOW would be 12300-12400 and still keep this forecast. However, please be prepared for a good news in the near future. As the market has been mute and little volatile in the past week so that makes me feel the market is waiting for something we don't aware of. I expect the news will be positive to the market.

The market is generally stable now, picks of my last week are generally OK. For this correction, Tech is leading the decline, I think 10-15% correction for  an individual stock would be good buying opportunities.

Tomorrow I'll go to Spain for a week, therefore I am not able to update until 17th. Maybe several words during the trip but I am not sure. So good luck.

Apr-8 Daily updates

Let me try to be short as I'll have last of my recent interviews in the Netherlands and won't be back before today's market close.

AA missed, however, the market does not act negatively, as yesterday's drop has already priced in the earnings. Let's see how big money react in today's market.

The metal stocks are mainly priced by metal futures, so I don't think we need to worry about other mining companies.

Today's data will provide two different direction for very short term: Good data may fuel the market to hold above 12700 to establish a good uptrend momentum, while bad data may bring DOW back to 12300-400 area as a recent correction.

Apr-7 Several Comments Regarding Overall Market

Today's market acts like a direction for most sectors. Although the indexes do not have huge spike, most stocks are green, also for DOW components. You may feel the sentiment of the market is really approving, given the unsatisfactory data though.

I feel the right strategy for the current market would be:

1. 80% of your account should be buy-and-hold.
2. 20% of your account could be played for speculation and options.

I know now you may have a feeling that your stocks are not rising fast enough as other stocks so you want to switch, or play with leveraged tools. Maybe some people gain a lot if they put most of their positions into options or play with margins. This is absolutely the truth and exactly drives many fresh investors into the market, giving their dreams to be a millionaire in weeks or months. However, most people will end up with ZERO in any future decent correction or surprising events. It has been proved in the past few months and will be proved in the future.

I have seen many people wiped out by playing futures and options on single side, either in China or US. It does not matter how many times you win, but if once you lost on time, you will be simply wiped out.  So please, if you are not experts, do not play options and futures on single side without hedging. Also, you will find your profit is better if you trade less.

That's all I want to say if we see a mid-term uptrend swing ahead. For most people, I believe choosing the right stocks then hold for a planned period is a good strategy.

Apr-5 The Picture Looks Good

Let's first recall my comments last week:

http://iamwym-stock-analysis.blogspot.com/2008/03/mar-31-weekly-preview-and-month-end.html

"If I am correct, we will not have a negative week, however, a doji or white candle stick are all possible. For TA wise, a big while candle stick for about 300 points on weekly chart will be quite bullish for mid-term."

This week DOW close at 12609 which establishes ~400 points gain with my major picks gained nice profits in past week, including WDC, BX, LPL that are not on my pick list but mentioned in last week's posts.

Given this week's gain, the bullish bet is quite successful. However, we still need to be more careful as we have quite weak economic data, that is though priced in.

Now I have a general bullish feeling regarding big picture with cautious if DOW reaches 13000. You may ask me whether if it is time to jump in fertilizers, I may repeat coke1's strategy again: You can buy now, but be prepared to average down with any -30% correction from it's future high.

By the way, I have got the offer in Switzerland as a so called "scientist", as I (and my family) still don't want stock trading to be my job... :P I am still waiting for a preferred position in US, which might have result around late May. Let's see.

Apr-3 Market Comments

I just came back from an interview in Switzerland, so I didn't post anything before market open.

Yesterday was a consolidation and today also act in a bullish manner, however, tomorrow's job data may change the short term scheme but won't play a major role for mid-term and longer. Today's jobless claims are worse than expected but it does not indicate much.

Let's review what we had in the past 2 weeks. We may find the emerging markets, including China and Brazil, are really strong sectors, in particular, Brazil stocks that I like best, are even going to make new high soon.

For airliners, maybe I called a bit early, but still, I believe a rebound shortly as I don't see much downside risk.

A-shares, CAF has a good shape because major MMs believe the downside risk for A-shares are really low now. Small fishes in China are eagerly selling their shares, but who is buying? :)

Tomorrow I am traveling to Luxembourg for another interview and will reach home around midnight. Maybe I'll give a summary or simply write something on Saturday.

Apr-2 It's time to pace the market

Other than simple buy-and-hold, I would like to point out that pacing the tone of the market is a very important to beat the overall market.

• This is not about following the hot sectors, or picking up a single stock that outperforms
• This is about to feel the market in a sensible way

Basically, most stocks follow the market, but how can we profit from the most profitable stock or sector? This requires outstanding market sense.

For example, Hong Kong market has a cycle about a week to outperform or underperform US markets, as well as other markets like India and Russian with shorter or longer cycle, if we can catch the cycles, obviously your performance will be better than the market. For longer period, this is also the truth.

Please pay attention to Taiwan and India markets, they will be hot again in weeks. :)

Apr-1 Market Comments

The market is acting very in a very positive manner amid so called good news. As you can see, the money makers set the tone of the market. UBS and LEH can get money by issuing more stocks, then the market goes up, while Ping An and Zhao Shang did this, Shanghai market plunged. What I want to say is very simple, there is no simple rule to judge whether the market will go up or down against certain kind of news, as it is only determined by how the big sharks explain the news. If big MMs say, this is positive, then market goes up, otherwise, you will see a bloody scene. Well, don't forget the news agencies are also controlled by different forces, whose money is an very important element in the whole chain of their business. Whatever the kind of business is.

In short, hold tight and buy on dips (my "dips" mean -10% correction not -1% small waves on individual stocks) in next days and weeks. I think I don't need to say what to buy again. :)