Comfort Delgro

Trans-cab announced rental cut for taxi hirers in the region of 30%. Comfort will not be sitting still and the market will remain nervous about what action they will be taking. Surge in private car rental fleet coupled with new entrants collaborating with Uber and Grab will intensify the competition. This blog believe this forces of disruption has caused long term structural damage to Comfort taxi business and the share price is at an inflexion point of a long term downtrend.

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Looking into 2017

2016’s surprise Brexit and Donald Trump’s US presidential victory was evident of prevailing `populism’ and we can expect more of that in France , Germany and Holland election in 2017. Expect market volatility when Trump starts to roll out his much anticipated tax reform and ultra growth policies on his inauguration on 20 Jan: Today’s benign Japan inflation figures and   Bank of Japan’s 0% yield target policies  on the 10-year government bond  means shorting the Yen and going long on the Nikkei  which this blog has been advocating since Trump was elected remain the best trade as long as the Bond Riot continues . Hopes of improved Global economy and that Trump will unleash an unprecedented  fiscal spending on infrastructure  will keep the US market positive until 20 Jan when Trump’s policies are tested by the markets. I wish everyone a blessed New Year and happy holiday!

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Jumbo

Double top formation in the making. A break below 0.60 will further support a Top Double trend reversal is evolving. Chilli crab may have finished its course. Next strong support at 0.48.

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Raffles Medical

Breaking below significant support at 1.425 will trigger more selling in the short term. It should be heading for 1.365 in the short term with a longer term target at 1.31.

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Yangzijiang

Dead cat bounce may be over. A break below 0.805 will take the stock to 0.77 and 0.73 respectively.



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STI

Back to range trading until Trump inauguration on 20 Jan. Strong support at 2900. Market fireworks starts after 20 Jan, its likely to be a "Sell on News" after Trump announces his fiscal stimulus plan.

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RMB is Racing to 7.15 Against the USD

Fear of RMB devaluation and Fed hawkish outlook on interest rates is accelerating RMB outflow from China. China markets have been weak despite recent good economic data especially the PPI that has turned positives for the past 3 months. PPI inflation accelerated from 1.2% in Oct to 3.3% YoY. The turned of the PPI is positives because it is an early sign that the Chinese economy is turning around. However the monetary tightening environment is putting a bearish tone on the Chinese market.

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Breadtalk

Emerging from a prolong downtrend with renewed interest reflected by very strong volume. Broke above 1.14 strong resistance level. Could be heading for next resistance at 1.23 and 1.29.

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US 10-Yr Treasury Yield

Heading for 3%. This is where equities and bond will collapse together.

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Donald May Force Fed to Accelerate Rate Hikes

The Fed finally pulled the trigger raising interest rates by 25 basis points and signaling a faster pace of increases in 2017. Meanwhile, U.S. retail sales, industrial output data point to slowing growth U.S. retail sales barely rose in November and industrial production recorded its biggest drop in eight months, suggesting some loss of momentum in economic growth in the fourth quarter. Fed have previously sounded cautious. In September, the central bank scaled back its forecasts for next year from three increases to two amid global economic uncertainty, but brought the projection back to three. Asia markets reacted with a sell down in Shanghai and Hang Seng Index. Donald Trump with his ultra pro growth policies may force the Federal Reserve to become more hawkish.  The risk is Yellen may have loss control and second guessing what Trump`s economic plan may entails. Yellen told Congress after the election that the outlook was fuzzy on that front. But Yellen may not have the luxury of waiting and seeing. If inflation and Treasury yields continue to rise, the Fed might be caught behind the curve and might be pressure to up the pace of rate increases.

US 10 Year Treasury and dollar continue to scale new highs. When the 10 Yr T yield hits between 2.8% to 3% , equities and bonds will both experience a synchronize collapse!

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Dow

Bulls may charged until Trump Presidential inauguration on 20 Jan. US equities market is the most crowded trade now. The surge in volume is the highest n 3 years, a sign of "Peak Greed". However the end is near but not until Trump becomes President on 20 Jan. The charts are pointing to a tipping point at 20180.

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Sheng Siong

Another yield play going out of favour in a rising rate environment. Good yield play but market is rotating out of yield stocks to finance and energy stocks. Broke significant support at 1.00. If it cannot rebound above 1.00 it could be heading for its next support at 0.93

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US dollar index

Dollar bull is intact, it is consolidationg for another push up to 103

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US 10-Yr Treasury Yield

Currently at 2.42 is poised to break above 2.5 before going higher 3.0 and 3.4. This is where the bond rout will be joined by equities.

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Market Moving Event - ECB meets on 8 Dec

The European Central Bank meets tomorrow (8 Dec) is widely expected to extend its quantitative easing programme by six months amid ongoing political risk and stubbornly low inflation. They are expected to keep the size of its monthly bond purchases unchanged beyond its current end date of March 2017, at a pace of around €80bn a month, according to a majority of economists polled by Reuters.

European market are rally and Euro weaken  on expectation of an extended QE. Lessons from the Italian Referendum, Brexit, and Trump election shows that when its all baked in the risk increases. This blog prefer to short Dax and long Euro into news tomorrow.

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Broke new high on a highest volume in 9 months. While most chartist are bullish, this blog believes this is a topping out price action. Trade plan for Dow will be to sell below 19115 after confirmation that it broke below its crucial support at 19122. A break below 19115 could see Dow falling to next support 18850. This blog will only turn bearish when the 19122 support is breached.

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Market Outlook

Fear of Italian referendum over the weekend cause a broad sell down across all markets in Asia except the Singapore market which has been enjoying its longest rally in recent memory.

Italian PM  Matteo Renzi's job are on the line Sunday, the PM has said he'd resign if the nation vote no to his reforms. After Brexit and Trump’s election, investors aren’t taking chances.

The global bond rout continued as investors speculated Donald Trump’s policies will fuel inflation.

This blog believe  a further bond rout, would start to impact equities negatively when the current switching out of bond into stocks theme runs out of steam.  This blog believe  at some point between 2.5% and 2.8%  on the 10-year Treasury, equity investors would start view the bond selloff as negative for stock, where bonds and stocks will go down together, a double whammy that will cause a global equity sell off. This will be compounded the  continuing strength of the US dollar in a rising rates environment. It could  trigger a renewed short squeeze on emerging markets and  corporates which have borrowed US dollars .

In the absence a calamity in  the stock market it will be very hard for the Fed not to raise rates in December.

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Nov 2016 Master The Market Class Graduates

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Dow

Oil inspired rally failed to hold on te DOW. Investors went on a buying rampage on news of OPEC agreement to cut oil supply. The oil rally holds but DOW did not. Investors sold off towards the last hour of trade. It was a significant day because the rally came with huge volume. For now dow is capped at 19230. This blog will be bearish if dow breaks 18054. Any break below this level could take the dow to 18600. With the OPEC out of the way the market focus will shift ti the Italian Referendum.

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DBS

Bull could be exhausted soon. Hit long term resistance at 17.50 today. Could pull back to 17.00 and 16.5 which is the next interim support.

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US 10-Yr Treasury Yield

Bond 35 years bull run could have ended with the arrival of Trumpnomics. Having broken above the 2.25 resistance, the yield could be heading for 2.9. The bond market will continue to discount Trump's ultra high growth policies till he takes office on 20 Jan. Higher yield will keep the dollar bull intact. Yen will be particularly weak because of Kuroda's policies to set JGB at zero.

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Fear Of `No Vote' For Italian Referendum Next Week Could Bring Fear Into The Market Next Week

Constitutional reform vote on Italian referendum due to be held on 4 Dec could bring renew anxiety and uncertainty into European market next week.

Italian Prime Minister Matteo Renzi is at risk of losing judging from  final polls published last Friday before blackout period. Renzi has pledged to step down and  if he does not win and the concern is that he will be forced to call a general election which could be won by anti-euro “populists” who could threatened another “Brexit”. As 4 Dec draws nearer next week, market will take a risk off approach, selling into the current rally. Euro dollar , Dax and European market could faced a selloff when it becomes clearer that Renzi will be losing. Gold could shine again!

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Starhub

The bleeding stops, the healing starts. Broke above its 2.81 strong resistance today today triggering a wake of short covering. The upward momentum should continue with the first target at 2.96 and subsequently 3.04 and 3.22

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Dow - Red Alert

Hit multi year trend cycle chart point at 19023. Sharp correction could bring it down to 16700.

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Market Outlook 18 Feb 2017 - Register Now

Here’s the link to register for the next market outlook https://bit.ly/2ePhZIF

Click here to view previous market outlook video

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Comfort Delgro

Institution selling not over yet. Tested 2.4 six times in the last 2 weeks. Selling pressures likely to cause a breakdown below key support at 2.40. A break below 2.40 will see the stock heading for 2.34 abd 2.27 with eventual target at 2.15.

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ThaiBev

3Q16 result was below expectation. Spirit sales drop with lower margin. On the charts it should be heading towards 1st support at 0.84 and subsequently towards 0.75 where it could find a solid support

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Market Moving Events

4 Dec : Italian referendum- Standby for another Brexit/Trump Election Drama. Good chance the current Prime Minister Renzi might lose this referendum given the Italian economy being the 4th largest in EU has been the worst performer since they joined EU. Expect Euro and European stock market to be weak in the run up.

8 Dec : Europe EU to decide whether to extend the QE after Bond Buying expire on Mar'2017. In the wake of recent interest rate rise and Fed rate hike expectation. Super Mario might stay status quo, imply more euro weakness ahead.

13-14 Dec- US FOMC rate hike looks like baked in the cake. USD rally to continue.

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US 10-Yr Treasury Yield

Broke above the 2.26 critical resistanance level. This blog believes that with Dec hike baked in the cake and Trump ultra pro-growth policies which has yer to be unfold, the yield will head higher prolonging the bull run on the Dollar. Yield could continue to rise until Trump takes office on 20 Jan.

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USD Index

Dollar has embarked on a bull run. Dollar index currently at 99.4 is poised to test 100.4 again. Any break above 100.4 will take the index to 113.5. The 2 year target of USD  Index is 150. A dollar will be detrimental to emerging market's debt and equities. Last week this blog highlighted the reversal pattern on the Jakarta Stock Index.

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TRUMP Triggered `Bond `Riot’

Donald Trump's victory is causing a sharp jump in U .S. interest rates victory. Today we saw emerging markets and its currencies collapsing . The 10-year U.S. Treasury yield went to as high as 2.14 percent Thursday from about 1.80 pre-election, on expectation of large infrastructure program that could generate growth but also create inflation and more debt. While the U.S. stock market rallied Thursday, the Asia markets went the reverse was a blood bath, With higher interest rates , high-yielding stocks like telecom and utilities were particularly weak .When U.S. yields go up, emerging market's get hit, largely because they have dollar denominated debt. The real risk right now is the Treasury bond market and is spiraling down. This is because a Trump triggered “bond riot” has the potential to feed on itself in the run up to his inauguration on 20 January. Another risk posed by a bond riot would be renewed turmoil in the credit markets. A bond sell off will also stress test Kuroda recent commitment to fix the 10-year JGB yield at 0%. If 10-year Treasury bond yield through 2.4%, could trigger a massive bond buying program to support JGB yield at zero % which would be yen bearish and will triggered a sell off in Emerging market and its currencies. The US rate hike in December looks like a sure thing following last Friday’s data with average hourly earnings growth accelerating to 2.8%YoY in October. A strong dollar and rising bond yields, followed by a Fed rate hike will certainly send shudders through the markets as December approaches.

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Jakarta Stock Index - Double Tops

US Treasury yields raising across the broad cause triggered by Trump ultro pro growth plan is causing rupiah and emerging countries currencies to plunge.

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Trump Victory and Fed Dec Interest Rate Hike Could Caused a Bond Riot

Trump ultra growth plan and Fed Dec rate rise will continue to drive interest rate higher and eventually lead to a steep market correction like what happened in Aug 15 when S&P dive 10%

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US ELECTION - How To deal With It

As the US presidency voting day draws near, the huge rally in US market yesterday is pricing in a Clinton victory. Tomorrow we in Asia has an advantage, we will get to react to the Election results before the European and US market is open. Results from State to State should start streaming in from 0600 local time, the earliest time to know who wins is about1200 noon. If Clinton wins as expected, global markets lead by US futures will rally. This blog will be taking advantage of the `Sell On News’ strategy to short into the weakest indices and the weakest stock, this blog will also consider buying Gold and Gold miner stock into dip.

After a relieve rally, market will begin to watch the Fed closely. With US corporate balance sheets are leveraged significantly, with the debt-to-equity ratio again reaching the GFC peak , the Fed tightening scare will return.

 A tightening action could `Tanked,  the US market by 10-15%, as seen during the 2015 rate hike.

Meanwhile both candidates have common plan to spend on infrastructure and defence, they differ significantly beyond that. Trump presidency , would be good for gold and oil stocks, and benefit biotech plays that are under pressure from Hillary’s stance on drug pricing. Cutting repatriation taxes would also help companies such as Apple to bring cash back onshore and reward shareholders. On the other hand, a Hillary win would benefit consumers companies like staples, as she is looking to raise minimum wages.

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The New Paper - 30 Oct 2016

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The Week Ahead

Monday
US report on consumer spending,  core PCE  and  Personal income

Tuesday
The US FOMC  holds a two-day meeting starting Tuesday. No move is expected days before the U.S. election, but the Fed could hint strongly that a December move is in the offing. Investors are currently betting on December hike.

Wednesday
Facebook Inc reports third-quarter results on Wednesday

Friday
Nonfarm payrolls expects to have added 175,000 in October after posting a gain of 156,000 in September. Also, the unemployment rate likely held steady at 4.9 percent in October

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Genting SP

Getting ready for the down swing, Result due on 3 Nov could be affected by dismal tourist arrival during the Aug - Sep Zika scare. Technically sign of weakness is emerging and an imminent breakdown will bring it to 0.73 and 0.705 respectively.

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United Engineers

Contrarian price action! On a day when broad market and STI is down this stock is up on strong volume. Could this be a signal that they have finally found a buyer to buy a stake in the company.
 

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Wilmar

CPO prices holding up,  sugar prices continued their rally and improved soy crush margins. All these are reasons to expect a better performance from Wilmar after an unexpected loss in 2Q16 due to soy-price volatility.

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Wilmar

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LIVE Trading On 17 Oct At SGX

More than 150 people came on the Monday morning 17 Oct to watch `A Live Trading’ demo session at SGX Centre where I traded the Hang Seng Futures Index  and STI.   I found out that all the participant except one has never watch a Live Trading session like this one. Many took leave to come as they were curious to find out how a professional trader conducts Intraday or Day trading on  Hang Seng Index. At  0900 , I started by showing the crowd the overnight chart of Hang Seng and ask them whether they would be bullish or bearish on HSI index by just looking  at the HSI chart. The response was muted and mixed, the crowd was not certain  which direction HSI will trade when it opens for trading at 0915.

I told them I too do not know where HSI will be heading if I don’t have a plan. I show them my HSI  Trade Plan or I would sometimes call my `Battle Plan’. I told the crowd that from analysis of my tradeplan I believe the HSI will be weak and will trade down today.

On trade plan were only  trendlines and support resistance lines derived from volume analysis. I explained that that’s how my  tradeplan will look like because my core strategy is using Price and Volume analysis.

Right from the opening bell at 0915 to 1130  there  was plenty of action of action. I switched my  HSI chart from the daily and 30 Min timeframe to the 1 min timeframe to execute my trades.

It was a great day for me because the Hang Seng Index moved exactly according to my tradeplan, prices were resisted  at every planned resistance lines and supported at every planned support lines.

I was glad the participants were convinced at the end of the session that trading is never by chance or a form of gambling, it involves a skill set that could be acquired through training and trading.

Overall it was an memorable experience for me and the participants.

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Best World

On 8 Sep this blog correctly predicted Best World has peaked and could be heading for 1.29. After the call was made Best World started its descend to a low of 1.275 today and rebound to close at 1.415.

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UPP

On 5th October, UPP acquired of 58.3% of Canadian-listed Taiga Building Products for C$18.9mn. Taiga Building Products is the largest independent wholesale distributor of building products in Canada. Taiga maintains substantial inventories of building products at fifteen strategically located distribution centres throughout Canada and two distribution centres in California. It also  operates three wood preservation plants that produce pressure-treated wood products. UPP also announce the issue of 1 warrant for every 1 existing ordinary share with an exercise price of SGD0.37.

With Taiga onboard, UPP is changing its business model, investors are clearly optimistic about the latest acquisition pushing the share price up 35% after the announcement. The price action is showing bullish momentum not seen since 2012. With Mr Ting Kooi Tong anf Peter Lim as its main stakeholder this blog believe we are at the early stage of a bull run and there is more excitement ahead.

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UPP

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Hang Seng Index

The next fall could be steep! Broke below crucial support at 23250 and below 25 days MA is a prelude to a steep fall ahead. Could be heading for next support at 22800 but eventual target is 22100.

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Chinese RMB

Chinese RMB broke above its July high at 6.70 and is firmly on the way to its next target 6.80 to 6.90. A break above this level trigger waves of selling in Emerging and Asia markets particularly Hang Seng. 

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Nasdaq

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Thai Beverage

A big wave of selling unleashed by fund house today. Selling pressure should continue to bring it to next support at 0.855 with eventual downside at 0.74.

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ThaiBev

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Singpost

The long ongoing discussion with Alibaba for further collaboration has stalled thrice as both parties were not able to fufill certain condition laid down in the initial investment agreement. The deadline is the end of Oct. Could the appointment of the new CEO Sam Ang lead to a positive outcome this time round? This blog is watching The Postman price action closely and must say that there has been very good support at 1.525 and 1.53 inspite of the weak STI. Singpost next resistance is 1.58 , however if there is an positive outcome it could go as high as 1.70 from a chart point.

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Singpost

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Geo Energy

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Coal Prices

Coal prices has gone up 400% since Jan 16 causing Coal stocks like Geo Energy to rally. One big reason for the rally is China supply side reform which the chinese government mandated the reduction of  working days for miners . The reform has resulted in the decline in production faster than the decline in demand. Coal and coal stock is expected to continue trending up till the end of the year. This blog stay bullish on Geo Energy until its quarterly result which will be due next month.

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Coal Prices

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The Week Ahead - Market Moving Event

The 2^nd US Presidential debate next Monday promised to be another market moving event widely watched by traders.  Clinton won the 1^st debate according to market polls, the market has priced in a Clinton victory. However if Trump managed to turn the table on Clinton next Monday it could send shivers through the markets. Watch the debate Live from 0900 to 1030 on 10 Oct local time. US markets may be jittery tonight ahead of the debate.

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Gold

Fell 2.2 %, breaking  the significant 1300 support but holding above the 200 days MA. The biggest decline since february was triggered by Fed rate hike fear and strong dollar. Currently sitting at its 200 day MA support at 1270. This blog will turn bullish at its next significant support 1220. Gold is expected to stay weak for next  2-3 weeks until we get nearer to the US election in November or when polls shows Trump  to be winning again.

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Gold

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Commodity Equities Index

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U.S. factories ramped up activity in September, the Institute for Supply Management (ISM)  national factory activity rose to 51.5 from 49.4 the prior month, beating analyst expectations in a Reuters poll,  and China's manufacturing sector expanded again in September, the  Purchasing Managers' Index (PMI) stood at 50.4 in September. A reading above 50.0 shows growth on a monthly basis. The commodity index has also rebounded 30% from Jan 16 low. OPEC cutting oil output. All these is fueling speculation that the Global Economy could finally be recovering.

Traders are piling into commodity and energy related stocks. On the local stock market, stocks like Nobles, Geo Energy, Alliance Mineral , ISR Capital etc are leading the way. This bullish trend is likely to continue all the way to the US Election in November.

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M1

Unusual strength in a weak market and on a day when other telcos stock are weak. Is  Keppel T and T strenght and massive volume today a sign that an M and A is brewing? Keppel T and T owns a 19% stake in M1. If Keppel Corp unload M1 Keppel T & T shareholders will be a happy lot!

Near term support at 2.38 resistance at 2.45 and 2.52 respectively.

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Ezra

Dash for Trash! Opec deal to cut oil supply brought many bulls into Ezra believing that oil prices has bottomed. Oil rebound will not solved Ezra deep seated debt problem. Ezra's bulls is caught will massive volume yesterday and the unwinding of long position next week may leave many bulls wounded. Strong resistance remained at 0.06 but for the short term it is going to test 0.054 level. If not support at 0.054, it should retest the 0.049 level.

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Hang Seng Index

Struggling to hold above the Trendline support and the 25 days MA. Its has been holding above these levels for the past 3 months. Any break below these levels could be a signal of trend reversal! The China Market could be very quiet and next  week as the Chinese enters their week long Golden Week holidays.

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NeraTel

The special dividend worth waiting! Made gains of $71.5m from sales of its POS business. It should announce a special dividend of about 12 to 16c soon. This blog believes the stock could rally to 0.81 on expectation of the special dividend play. Strong support at 0.73.

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