Wednesday, 29 August 2012

Get Ready for a dissapointment at Jackson Hole, and when to buy?

Dear Friends,

As a trader, I am always looking forward to news and events and reports that might give me a glimpse of what is going to happen next. That is how I always gain a step ahead of the market. Trading is a tough world. We need to gain whatever advantage we have over the retailers. The thing is my habit is always to have a plan A and plan B.


Some things to watch out for if you are worrying about your next step:

1) My gut feeling is that this Friday at the annual Jackson Hole meeting, Ben Bernanke would not announce any QE3. So if I have short term positions, I might want to exit first going into Friday. For Singapore stocks, I would exit on Friday. For US Stocks, I would exit before 10am on Friday America time.

If you are a mid term trader (2-3 months), continue to hold your positions as we are still optimistic about the stock market ahead.

2) If there is a disappointment, depending on the severity (the market will tell you), I would react accordingly. The more disappointed the market is, the better for me as I will be waiting to enter to buy stocks at a discounted price for short term trades. The thing is the market will come back with expectation of another QE3 at the next FOMC meeting on 12th and 13th September.

Any fall in the market before that FOMC meeting is a great opportunity to accumulate short term position!

3) I am also keeping a lookout on the US jobless claims this thursday and next thursday. It will give me a glimpse of the job situation in the month of August.

If both are worse than expectations, be prepared to liquidate whatever positions going into next friday! Job reports like the Non farm payroll might have a chance to fall below expectations. If that happens, I would go  into the market the following Monday and hold my stocks for a longer duration.

If both jobless claims are better than expectations, I would hold my stock positions through next Friday as the market have a high chance of reacting positively to better jobs situation.


4) If there is a positive QE3 statement that will be announced on Friday's Jackson Hole Meeting and welcomed by the market, I would pounce on accumulating my Silver positions (silver ETF, symbol SLV), my US stocks on Friday and Singapore Stocks next Monday.

I know that a lot of the investors do not like the hassle of studying these fundamental news and focus totally on charting. I feel charting is only one part of trading and to be good trader, knowing economical news and its applications are important too!

Rgds
Daniel
www.danielloh.com

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