Funds Flow Analysis (FFA): 6 November 2012, Tuesday, 3.50pm Singapore Time

Current Latest Computed Funds Flow Analysis (FFA):
6 November 2012, Tuesday, 3.50pm Singapore Time

The Game of Bluff is getting treacherous

European markets are about to open, while US markets are 6.5 hours away from the Tuesday opening bell. Based on current latest computational results, Holdings index strength of Big Hands changed from -4.100 to -4.119 on the Donovan Funds Flow Index Oscillator. Big Hands reversed from Calls to Puts, holdings on hand changing from +0.147 to -0.329  on the Donovan Funds Flow Index Oscillator. 


Posture:

+ Dual pronged bearish actions
+ Switching to Puts holdings
+ Bulk of Shorts maintained.
+ No more protection against upside in the short-term
+ SHORTS and PUTS held concurrently: Switching to more aggressive attacking mode 
+ Outlook outright bearish in the mid-term without any more upmove-rebound protection
+ Stocks in the Board Markets (Big Caps, Mid-caps and Small caps) had been under Shorts-accumulation set-up in August-October 2012 period, as warned in September and October 2012. 

Meanwhile, Donovan Broad Market Short Term Shorting Intention (1-month look-back window), Donovan-BMSTSI (1-mth), changed from strength index 59.11% to 58.65%.

* Note that Donovan-BMSTSI is also an Oscillator, based on the total amount of shorts in the entire markets; BMSTSI 20 and below means too few shorts (under-short) in the short term broad market and BMSTSI 80 and above means too much shorts (over-short) in the short term broad market. An increase in BMSTSI means broad markets are increasingly being shorted, suggesting bearishness, while a decreasing BMSTSI means covering shorts or lessened shorts. 

Below is the history of broad market shorts by the Smart Money and the most well-informed:

Donovan Broad Market Short Term Shorting Intention (BMSTSI) History:

21/08 BMSTSI = 51.25
22/08 BMSTSI = 45.00
23/08 BMSTSI = 35.00
24/08 BMSTSI = 43.75

27/08 BMSTSI = 40.00
28/08 BMSTSI = 33.75
29/08 BMSTSI = 32.50
30/08 BMSTSI = 40.50
31/08 BMSTSI = 44.25

03/09 BMSTSI = 41.25
04/09 BMSTSI = 51.00
05/09 BMSTSI = 60.25
06/09 BMSTSI = 55.00
07/09 BMSTSI = 37.50

10/09 BMSTSI = 35.92
11/09 BMSTSI = 32.84
12/09 BMSTSI = 26.51
13/09 BMSTSI = 22.51 (FED announced "QE3")
14/09 BMSTSI = 31.93 (BMSTSI increased)

17/09 BMSTSI = 39.68 (BMSTSI increased)
18/09 BMSTSI = 39.86 (BMSTSI increased though rate of increment reduced for 18-Sept)
19/09 BMSTSI = 41.08 (BMSTSI increased)
20/09 BMSTSI = 40.89
21/09 BMSTSI = 41.72 (BMSTSI increased)

24/09 BMSTSI = 43.90 (BMSTSI increased)
25/09 BMSTSI = 47.76 (BMSTSI increased)
26/09 BMSTSI = 52.18 (BMSTSI increased; bearish)
27/09 BMSTSI = 62.19 (BMSTSI increased; bearish)
28/09 BMSTSI = 64.31 (BMSTSI increased; bearish)

01/10 BMSTSI = 64.45 (BMSTSI increased; bearish)
02/10 BMSTSI = 64.53 (BMSTSI increased; bearish)
03/10 BMSTSI = 64.95 (BMSTSI increased; bearish)
04/10 BMSTSI = 64.18 (Consolidation; bearish)
05/10 BMSTSI = 63.41 (Consolidation; bearish)

08/10 BMSTSI = 60.06 (Consolidation at above 50; bearish)
09/10 BMSTSI = 58.39 (Consolidation at above 50; bearish)
10/10 BMSTSI = 59.43 (Consolidation at above 50; bearish)
11/10 BMSTSI = 57.48 (Consolidation at above 50; bearish)
12/10 BMSTSI = 58.25 (Consolidation at above 50; bearish)

15/10 BMSTSI = 57.34 (Consolidation at above 50; bearish confidence shorts by Big Hands)
16/10 BMSTSI = 58.79 (Consolidation at above 50; bearish confidence shorts by Big Hands)
17/10 BMSTSI = 58.26 (Consolidation at above 50; bearish confidence shorts by Big Hands)
18/10 BMSTSI = 56.25 (Consolidation at above 50; bearish confidence shorts by Big Hands)
19/10 BMSTSI = 46.01 (Volatility)

22/10 BMSTSI = 39.12 (Volatility)
23/10 BMSTSI = 46.98 (Volatility)
24/10 BMSTSI = 34.30 (Volatility)
25/10 BMSTSI = 28.59 
26/10 BMSTSI = SINGAPORE PUBLIC HOLIDAY

29/10 BMSTSI = 33.00 (Short Term Broad Market Shorts Consolidation Ends)
30/10 BMSTSI = 43.00 (Short Term Broad Market Shorts Consolidation Ends)
31/10 BMSTSI = 47.23 (Short Term Broad Market Shorts Consolidation Ends) 
01/11 BMSTSI = 53.00 (Short Term Broad Market Shorts Consolidation Ends)
02/11 BMSTSI = 54.11 (Short Term Broad Market Shorts Consolidation Ends)

05/11 BMSTSI = 59.11 (Short Term Broad Market Shorts Consolidation Ends)
06/11 BMSTSI = 58.65 (Short Term Broad Market Shorts Consolidation Ends)


*Note that Donovan-BMSTSI is also an Oscillator, based on the total amount of shorts in the entire markets; BMSTSI 20 and below means too few shorts (under-short) in the short term broad market and BMSTSI 80 and above means too much shorts (over-short) in the short term broad market. An increase in BMSTSI means broad markets are increasingly being shorted, suggesting bearishness, while a decreasing BMSTSI means covering shorts or lessened shorts. 

-----------------------------------------------------------------------------------------------------------------

Donovan Big Hands Funds Flow Computational Oscillator
-----------------------------------------------------------------------------------------------------------------

Donovan's Funds Flow Analysis Index Oscillator:

-10 ----- 0 ------+10

Donovan's Funds Flow Analysis Strength-Index Scale Key:

negative (-ve) = shorting;

positive (+ve) = longing;

0: No shorts and no longs (direction-less)

1-2: Weak strength / weak holdings

3-4: Moderate strength / moderate holdings

5-6: Strong strength / high holdings

7-8:Very strong strength / very high holdings

9-10:: Rally Mode in store / Plunging Mode in store

Donovan's Daily Broad Market Short Term Shorting Intention (BMSTSI) Oscillator:

0% -----20-----50-----80-----100%

Donovan's Daily Broad Market Short Term Shorting Intention (BMSTSI) Index Scale Key:

0 to 10: Negligible Broad Market Shorting Activity Today

10 to 20: Very Weak/Little Broad Market Shorting Activity Today

20 to 40: Weak/Little Broad Market Shorting Activity Today

40 to 60: Moderate Broad Market Shorting Activity Today

60 to 80: Strong Broad Market Shorting Activity Today

80 to 90: Very Strong Broad Market Shorting Activity Today

90 to 100: Full or Best Effort Broad Market Shorting Activity Today

Home: http://donovan-ang.blogspot.sg/

Funds Flow Analysis (FFA): 5 November 2012, Monday, 5.15pm Singapore Time

Current Latest Computed Funds Flow Analysis (FFA):
5 November 2012, Monday, 5.15pm Singapore Time

The Game of Bluff is getting treacherous

European markets are in their 2nd hour of trading, while US markets are 5.5 hours away from the Monday opening bell. Based on current latest computational results, Holdings index strength of Big Hands changed from -4.669 to -4.100 on the Donovan Funds Flow Index Oscillator. Big Hands' Calls on hand changed from +0.591 to +0.147  on the Donovan Funds Flow Index Oscillator. 


Posture:

+ Bulk of Shorts maintained.
+ No more protection against upside in the short-term
+ Outlook bearish in the mid-term without any more upmove-rebound protection
+ Stocks in the Board Markets (Big Caps, Mid-caps and Small caps) had been under Shorts-accumulation set-up in August-October 2012 period, as warned in September and October 2012. 

Meanwhile, Donovan Broad Market Short Term Shorting Intention (1-month look-back window), Donovan-BMSTSI (1-mth), changed from strength index 54.11% to 59.11% (Computation Completed: 5 November 2012, Monday, 11.20pm Singapore Time).

* Note that Donovan-BMSTSI is also an Oscillator, based on the total amount of shorts in the entire markets; BMSTSI 20 and below means too few shorts (under-short) in the short term broad market and BMSTSI 80 and above means too much shorts (over-short) in the short term broad market. An increase in BMSTSI means broad markets are increasingly being shorted, suggesting bearishness, while a decreasing BMSTSI means covering shorts or lessened shorts. 

Below is the history of broad market shorts by the Smart Money and the most well-informed:

Donovan Broad Market Short Term Shorting Intention (BMSTSI) History:

21/08 BMSTSI = 51.25
22/08 BMSTSI = 45.00
23/08 BMSTSI = 35.00
24/08 BMSTSI = 43.75

27/08 BMSTSI = 40.00
28/08 BMSTSI = 33.75
29/08 BMSTSI = 32.50
30/08 BMSTSI = 40.50
31/08 BMSTSI = 44.25

03/09 BMSTSI = 41.25
04/09 BMSTSI = 51.00
05/09 BMSTSI = 60.25
06/09 BMSTSI = 55.00
07/09 BMSTSI = 37.50

10/09 BMSTSI = 35.92
11/09 BMSTSI = 32.84
12/09 BMSTSI = 26.51
13/09 BMSTSI = 22.51 (FED announced "QE3")
14/09 BMSTSI = 31.93 (BMSTSI increased)

17/09 BMSTSI = 39.68 (BMSTSI increased)
18/09 BMSTSI = 39.86 (BMSTSI increased though rate of increment reduced for 18-Sept)
19/09 BMSTSI = 41.08 (BMSTSI increased)
20/09 BMSTSI = 40.89
21/09 BMSTSI = 41.72 (BMSTSI increased)

24/09 BMSTSI = 43.90 (BMSTSI increased)
25/09 BMSTSI = 47.76 (BMSTSI increased)
26/09 BMSTSI = 52.18 (BMSTSI increased; bearish)
27/09 BMSTSI = 62.19 (BMSTSI increased; bearish)
28/09 BMSTSI = 64.31 (BMSTSI increased; bearish)

01/10 BMSTSI = 64.45 (BMSTSI increased; bearish)
02/10 BMSTSI = 64.53 (BMSTSI increased; bearish)
03/10 BMSTSI = 64.95 (BMSTSI increased; bearish)
04/10 BMSTSI = 64.18 (Consolidation; bearish)
05/10 BMSTSI = 63.41 (Consolidation; bearish)

08/10 BMSTSI = 60.06 (Consolidation at above 50; bearish)
09/10 BMSTSI = 58.39 (Consolidation at above 50; bearish)
10/10 BMSTSI = 59.43 (Consolidation at above 50; bearish)
11/10 BMSTSI = 57.48 (Consolidation at above 50; bearish)
12/10 BMSTSI = 58.25 (Consolidation at above 50; bearish)

15/10 BMSTSI = 57.34 (Consolidation at above 50; bearish confidence shorts by Big Hands)
16/10 BMSTSI = 58.79 (Consolidation at above 50; bearish confidence shorts by Big Hands)
17/10 BMSTSI = 58.26 (Consolidation at above 50; bearish confidence shorts by Big Hands)
18/10 BMSTSI = 56.25 (Consolidation at above 50; bearish confidence shorts by Big Hands)
19/10 BMSTSI = 46.01 (Volatility)

22/10 BMSTSI = 39.12 (Volatility)
23/10 BMSTSI = 46.98 (Volatility)
24/10 BMSTSI = 34.30 (Volatility)
25/10 BMSTSI = 28.59 
26/10 BMSTSI = SINGAPORE PUBLIC HOLIDAY

29/10 BMSTSI = 33.00 (Short Term Broad Market Shorts Consolidation Ends)
30/10 BMSTSI = 43.00 (Short Term Broad Market Shorts Consolidation Ends)
31/10 BMSTSI = 47.23 (Short Term Broad Market Shorts Consolidation Ends) 
01/11 BMSTSI = 53.00 (Short Term Broad Market Shorts Consolidation Ends)
02/11 BMSTSI = 54.11 (Short Term Broad Market Shorts Consolidation Ends)

05/11 BMSTSI = 59.11% (Computation Completed: 5 November 2012, Monday, 11.20pm Singapore Time)

*Note that Donovan-BMSTSI is also an Oscillator, based on the total amount of shorts in the entire markets; BMSTSI 20 and below means too few shorts (under-short) in the short term broad market and BMSTSI 80 and above means too much shorts (over-short) in the short term broad market. An increase in BMSTSI means broad markets are increasingly being shorted, suggesting bearishness, while a decreasing BMSTSI means covering shorts or lessened shorts. 

-----------------------------------------------------------------------------------------------------------------

Donovan Big Hands Funds Flow Computational Oscillator
-----------------------------------------------------------------------------------------------------------------

Donovan's Funds Flow Analysis Index Oscillator:

-10 ----- 0 ------+10

Donovan's Funds Flow Analysis Strength-Index Scale Key:

negative (-ve) = shorting;

positive (+ve) = longing;

0: No shorts and no longs (direction-less)

1-2: Weak strength / weak holdings

3-4: Moderate strength / moderate holdings

5-6: Strong strength / high holdings

7-8:Very strong strength / very high holdings

9-10:: Rally Mode in store / Plunging Mode in store

Donovan's Daily Broad Market Short Term Shorting Intention (BMSTSI) Oscillator:

0% -----20-----50-----80-----100%

Donovan's Daily Broad Market Short Term Shorting Intention (BMSTSI) Index Scale Key:

0 to 10: Negligible Broad Market Shorting Activity Today

10 to 20: Very Weak/Little Broad Market Shorting Activity Today

20 to 40: Weak/Little Broad Market Shorting Activity Today

40 to 60: Moderate Broad Market Shorting Activity Today

60 to 80: Strong Broad Market Shorting Activity Today

80 to 90: Very Strong Broad Market Shorting Activity Today

90 to 100: Full or Best Effort Broad Market Shorting Activity Today

Home: http://donovan-ang.blogspot.sg/

Appreciation

Thank you to the more than 35,000 unique visitors. 

Donovan's Market Analysis was set up not long ago, 

and has been a viral hot hit within a relatively short span of time.

List is not exhaustive...

FTSE ST Real Estate Index: 19 October 2012, Friday, 11.59pm Singapore Time

FTSE ST Real Estate Index: 19 October 2012, Friday, 11.59pm Singapore Time

Following the Donovan Singapore Property Market Composite Index (refer: http://donovan-ang.blogspot.sg/2012/10/singapore-property-technical-analysis-6.html), the following is the Singapore FTSE Straits Times Real Estate Index for comparison. Both indices give different perspectives of how the Singapore Property Market is performing, where they stand currently and what to expect.

The Donovan Singapore Property Market Composite Index: http://donovan-ang.blogspot.sg/2012/10/singapore-property-technical-analysis-6.html shows that a long term downtrend had already begun, while the FTSE Straits Times Real Estate Index has not detected such a trend yet, perhaps because the numerous large index-constituent property conglomerations and stable REITS are still holding up the FTSE Straits Times Real Estate Index. This may mask the true pictures shone by the rest of the sector. These large property conglomerations usually have better Economies of Scale and, hence, are able to resist initial erosions to corporate results in a deteriorating environment. We cannot say the same for the mid-cap and smaller cap counterparts.

The large caps, which make up majority of the FTSE ST Real Estate Index, are hence much less sensitive in reflecting changes to business as well as economic environments, resulting in FTSE ST Real Estate Index being relatively a laggard as a litmus.

On the FTSE Straits Times Real Estate Index, the breakdown has not happened yet but has a nicely formed bearish wedge price structure. The price satisfaction has already been achieved and the large bearish wedge is awaiting the break down. A capture above the trendline resistance formed by R1, R2, R3, R4 and R5 will negate a potential property bear caused by the bearish wedge formation. However, anything above the trendline resistance formed by R1 to R5 is also where the Big Hands and market will deliberately create an over-value zone for distributional selling. The long term bearish structure should break down soon since it is approaching the 2/3 point and that Donovan Singapore Property Market Composite Index had already broken down. At the trendline support caused by S1 and S2, the government should try to cushion the property corrections, otherwise there would be a prolonged downwards movement.

While the FTSE ST Real Estate Index is testing wedge resistance, on the Donovan Singapore Property Market Composite Index, the property rebounds are already restricted by long term Support-Turned-Resistances, and hence any upside is limited. Furthermore, on the Donovan Singapore Property Market Composite Index, the important break downs had already been completed, and current rebounds by the property sector are just mere back-test confirmation of the long term bear which had already set in.

On both charts, Donovan Singapore Property Market Composite Index and FTSE Straits Times Real Estate Index, both are bearish in nature. A break down of the FTSE Straits Times Real Estate Index below BLUE support band formed by S1 and S2 will be a double confirmation for Donovan Singapore Property Market Composite Index Bear Market which had already broken down and completing the initial stage of property bear market back-test: http://donovan-ang.blogspot.sg/2012/10/singapore-property-technical-analysis-6.html

Summary:

From Donovan Analysis as above, contrary to the popular belief that there is a housing bubble in Singapore, in actual fact, there is no bubble. There is no bubble in part due to perhaps the good preventive measures and cooling measures implemented by the Singapore government; hence, any property fall will not have too nasty an impact to the Singapore economy. In such a case, the Singapore Banking Sector will not be hurt too badly as there were no bubbles that could result in loan assets turning toxic. 

However, within 1-2 year's time, we should see the price structures reflected by the financial market (Donovan Singapore Property Market Composite Index and FTSE Straits Times Real Estate Index) get translated in the physical property market, i.e. one of which prices of physical property start significant correction mode. Expect COE and COV to drop in the same timeframe too.

Donovan Rating:
Precautions needed; watch out, as Singapore Property Market is to peak in 2012.

Related:
http://donovan-ang.blogspot.sg/search/label/Singapore%20Property

Home: http://donovan-ang.blogspot.com

Donovan's Market Analysis @ MoneyMind TV Programme

Donovan's Market Analysis @ MoneyMind TV Programme

I will be on National Television @ ChannelNewsAsia Channel on 21 October 2012, 9.30 p.m, and be featured in the financial programme, MoneyMind. Do show MoneyMind your support. 

MEDIA ALERT: 

Money Mind put out a Q&A of the views of Trader and Blogger Donovan Ang for his take on financial blogs for this Sunday's episode (Oct 21) at 9.30pm on ChannelNewsAsia. Others interviewed include bloggers, research analysts and the Director of Internet Research at NTU. The story examines the proliferation of financial blogs and charts on online investment portals, information sharing sites and social media - and whether the information is trustworthy.
Don't forget to catch the program (Sunday 9.30pm Encore Monday 6am/11.30am Tuesday 3.30pm) or log onto: Website: http://www.channelnewsasia.com/moneymind
Facebook Page: http://www.facebook.com/MoneyMindCNA for more information

Frederick Lim
Editor, Money Mind
ChannelNewsAsia
Website: http://www.channelnewsasia.com/moneymind
Facebook Page: http://www.facebook.com/MoneyMindCNA

Donovan Singapore Property Market Composite Index: 6 October 2012, Saturday, 4.22pm

Donovan Singapore Property Market Composite Index: 6 October 2012, Saturday, 4.22pm

The chart attached is a Composite Index of the Singapore Property Market, comprising of the truest litmus reflections of the local property market. The Donovan created Donovan Singapore Property Market Composite Index consists of the blue chips, large caps, mid caps and small caps (CityDev, Capitaland, Keppeland, SC Global, UOL, Wing Tai, Ho Bee, Hong Fok, Roxy-Pacific) that are reflective of and active in the Singapore property market. For ease of reference and comparison with respect to the Straits Times Index, all values of the Singapore Property Market Composite Index will be given x100 to derive with a 4-digit index.

The first warnings by the market were given the salvo during June, July and August 2011 (last year) with the breaking down of the Singapore Property Market Composite Index at near 2600 points (corresponding with $26 above). 

The August 2011 nasty market plunges were, beforehand, given severe pre-warnings by me in June and July last year 2011 (refer: http://www.youtube.com/watch?v=QroFRLSf16I and

http://www.youtube.com/watch?v=T8pfhkQAiA4&feature=relmfu ), during which in the final week of July 2011 when everyone was bullish, I had warned severely that Big Hands were going to plunge the market in the 1st week of August based on Donovan Funds Flow Analysis Calculations. True enough, the plunge came, and alas, Technical damage was achieved as a first stage operation.

With mass bearishness in the market at the end of 2011, in which the masses are always supposed to be wrong, from December 2011, the market achieved the A-B-C big wave Mid Term Technical Rebound, throwing confusion to the masses who were once again wrong on their bearishness.

With the introduction of QE3, the masses are to be wrong yet again with their bullishness. This is because the QE3 (or QEfinity) had already been absorbed by the markets and baked into the prices way beforehand. This had already been absorbed by the entire duration of 2012 leading to the announcement; market had already priced in QE3 way before it was released.

This time round, Market made use of these final few weeks to make its last (limited movement up) backtest of Bear Market Lines (R1, R2 and R3 above). Worse, R4 Mid Term BLACK RESISTANCE LINE was also satisfied. To make all things worse, that is worst of the worse, Price Sastisfaction Target was also achieved concurrently at 2998 points (corresponding with $29.98). This would make it the R5. Concurrently, all R1-R5 are triggered for sell-downs.

The market is merely awaiting for the price satisfaction triangle to break down as above charted Technical Analysis shows (Thinner BLUE SUPPORT LINE). The GREY SUPPORT LINE is the first target. There is no time frame for achieving that. However, if the movement to GREY SUPPORT is impulsive, there is a likelihood that GREY SUPPORT would not hold, and if it does not hold, it means the property market is resuming, officially, the next stage of its nascent bear market based on my Technical Analysis. 

Only a re-capture of YELLOW R1, ORANGE R2 AND RED R3 will negate the Singapore Property Market Composite Index Nascent Bear Market. There is extremely low likelihood of re-capturing the resistances because R1, R2, R3, R4 and R5 are very high sell pressure points. The distribution was high volume and rebound was far below par in comparison. This shows that there are plenty of small fishes and mid sized fishes holding unwanted babies that the Big Hands disposed of. In addition, Big Hands were piling up stocks shorts as mentioned last few weeks.

Based on charted Technical Analysis above (refer chart above), all late comers will have to be careful against getting hurt in the property market as well as property stocks. QE3 merely did the market backtests in Gold (previously highlighted) as well as the backtests in Donovan Singapore Property Market Composite Index. 

Donovan Rating:

Red Alert. Be Cautious. Selldown/Rainstorm Coming.

Home: http://donovan-ang.blogspot.sg

Gold Technical Analysis: 5 October 2012, Friday, 9.40am Singapore Time

Gold Technical Analysis: 5 October 2012, Friday, 9.40am Singapore Time

Contrary to the 95% of market participants who view gold as a buy, investment, long or whatever you call it, the 5% of the real pros are already out, while 95% are already in. The 5% who are the Big Hands may in fact be going against the majority already. The more convincing the news, logic, facts and classical conditioning (3rd Quantitative Easing), the more sure people (traders and investors) will go into the mouse traps not only in Gold but in financial/investment markets worldwide. Afterall, how to catch the 95% of market participants and have them go into the traps willingly if the news, logic, facts and classical conditionings are not showing compulsive buys and sure win gambles?

Long Term: Downtrend
Mid Term: Downtrend
Short Term: Uptrend Ending

The above characteristic throws confusion to the markets.

This is still a nascent stage of a super cycle Gold Bear.

Be careful of your investments in all financial asset classes worldwide.

Donovan Norfolk Technical Rating on Gold:

BEARISH; SELL/SHORT.

First Hand Analysis Update: 3 October 2012, Wednesday, 12.05pm Singapore Time:

3 October 2012, Wednesday, 12.05pm Singapore Time: 

First Hand Analysis Update exclusive for those following my market analyses closely as well as those following my Facebook Wall. The markets worldwide have all reached the most critical of all resistances currently, with Spain testing and failed several days ago; the others will follow the test, a break up will mean negation of bear market (probability = zero based on FFA), this implies there will be synchronised worldwide sell-downs for the next few weeks. Those who had bought into the QE3 are mostly trapped and underwater with losses, the losses will mushroom like a nuclear mushroom cloud.

FTSE MIB: 1 October 2012, Monday, 1.15pm

FTSE MIB: 1 October 2012, Monday, 1.15pm

The following is intradays' chart of FTSE MIB (Italy Index). 

As per warned last 2 weeks on market bearishness, FTSE MIB had indeed broken down the RED SUPPORTS and PINK SUPPORTS as above. 

There is a high probability of broad European rebound for a few hours (once Europe opens) before resuming a selldown after US market opens.

As per severely warned since QE3 was announced, the Donovan-BMSTSI (measurement of broad market shorts) had been stacking up everyday, suggesting very high confidence shorts by Big Hands while everyone were buying the markets for investments and tradings. One should had been dumping on this last escape wave that had already ended and should had invested in mid-long term shorts.

The Euro Crisis is back in play, unless Italy can negate the pink SUPPORT-TURNED-RESISTANCE at around 15700 points. Only a reclamation of the above PINK lines will stop a continuation of the selldowns. Otherwise the markets will keep selling down, which is to be expected since QE3 was a convincing buy/holding on to investments, and the majority of naive market participants are supposed to lose money.

Per expected, Australian Dollar (AUD-USD) is continuing to sell down below $1.04000.
Commodities will carry on its broad sell off.

Hang Seng Index: 26 September 2012, Wednesday, 9.20am Singapore Time

From my live feed @ http://www.facebook.com/sakuragi.cnbc

26 Sept 2012, Wednesday, 12.48am Singapore Time: US market selling down now. Very sudden and happened indeed when entire Asia sleeping right now; 

26 Sept 2012, Wednesday, 8.50am Singapore Time: if Hang Seng falls below 20400 points, expect a GUARANTEED IMMEDIATE-TERM SLAUGHTER. 

Red Hair, Red Jersey, Red SlamDunk

@ Donovan Ang, Singapore

Russia RTS Standard Index: 23 September 2012, Sunday, 9.55pm

Russia RTS Standard Index: 23 September 2012, Sunday, 9.55pm

Attached is the Russia RTS Standard Index. 

The chart above speaks a thousand words; currently Russia RTS is still entrenched within an initial Bear Market Characteristics. Bearish Fan, Bearish Volumes in Russia (member of BRICs) and Bearish Technicals. 

Only a break-up above the lowest frame of the Fan (Black Line Support-turned-Resistance) and the powerful RED resistance band at 10468-11229 points will negate the bearish distributional structure.

A break down below 8367 points will immediately bring about a heavy sell-down and double-confirm the bear market.

Anywhere between 8367-11229 is a consolidation.

Based on structures, RTS (Russian Stock Market) and Russian Ruble currency is in an early stage of Bear Market.

Home: http://donovan-ang.blogspot.com

Spanish IBEX Market: Market Makers' Implications

Spanish IBEX had been on a short-sale ban. 

Market Makers had restricted/banned shorting the Spanish IBEX for some time as Spanish government imposed a short-sale ban.

Recently, Market Makers opened up shorting platform for IBEX again. You could place your shorts on Spanish IBEX and market makers accept the shorting bets. Not surprisingly, Spanish IBEX charged up after that. Moral of the story? When you cannot short, the market dives into the Olympics pool. When it's time for them to push, the platform for shorting opens its doors and welcomes you with both arms.

Presently Spanish IBEX isn't the weakest market anymore. 

It is the Hang Seng Index that is the weakest. The low profiles are where the attacks actually are. The high profiles (Europeans) are not where the attacks are. In the ancient Chinese battle strategies, the term is called "Calling for the East and Strike the West", which in this case here, calling for the West and strike the East.

USD Index: 19 September 2012, Wednesday, 10.07pm Singapore Time

USD Index: 19 September 2012, Wednesday, 10.07pm Singapore Time

The chart above shows USD Index breaking down the BLUE Support line which most technical analysts around the world sees. They are all bearish of the USD given the surface news (QE3) and shorted USD on news, especially when it is really convincing that USD is bearish with all the money printing. But is it really so?

If US prints, who says the basket of associated currencies cannot outdo US? Japan is already the first to outdo and outlast. Secondly, as mentioned in my previous articles that the final nail for Europe is coming, this means USD may be unexpectedly in high demand. Many opposing forces at work here certainly.

The problem with shorting on such convincing news is that the USD already broke down the BLUE Support 1 month ago in August 2012, and is at the Support area following the news. What does this mean? It may mean a massacre of the majority of market participants who view QE3 as bullish to financial markets and USD as bearish (including the high profile Daryl Guppy etc). Is it really the case? This had already been absorbed 1 month ago. The 5% insiders are always ahead and now doing opposite of the 95% who depend on news to be on the wrong side.

As of now, the financial markets have still not confirmed USD change of trend. USD remains in the over-looked RED Channel above. Furthermore, USD is now at a very important point indicated by the GREEN CIRCLE above, an intersection of TRIPLE strong supports. Only a breakdown below the triple strong supports will confirm a USD Bear. Otherwise, USD remains bullish and financial markets remain bearish.

At the triple major support, since many high profile analysts and majority of market participants are bearish on USD due to QE3, majority have shorted USD, and are bearish of it; because of this, there is a high probability of US Dollar rebounding from the current point (GREEN CIRCLE above), and carry on its up-trend.

It takes a lot of guts to be a contrarian of the market currently.

Note: 
USD Supported means Financial Markets Resisted.
USD Bullish ==> Financial Markets Bearish

QE, Mortgaged Back Securities and Treasuries

Note that they are buying MBS, not treasuries (other than a bit of the long-dated via Twist); if they buy many more treasuries, the Fed will own such a large number of them that large parts of the treasury market will have no international liquidity left and will stop functioning properly. 

Now given that in addition to that being a disaster on its own, at a basic level treasuries are the foundation of the financial system. Huge numbers of transactions involve treasuries as collateral. No treasury equates to no collateral; similarly, treasury illiquidity equates to weak collateral. They know this fact, hence the announcement of open ended but no finite dollar amount pledged in. This is actually very different than if they had announced a $800bn QE3, locking themselves into that amount. It is not quite possible that they can actually buy that many without imploding the market. They have a bit of leeway with MBS but there is also a finite market there. 

In other words, rather than seeing this as infinite QE, it can be regarded as indeed the announcement that they are going all in and throwing in the kitchen sink, yet basically they are trying to keep people from realising they actually do not have a kitchen sink. It is more of psychology/jaw-boning than anything,

They could not deal with the consequences of saying they would not do it anymore. This is the real QE3: "We are telling people we are doing this to infinity in the hopes that people believe it and act accordingly and thus the problem goes away, and we thus do not actually have to do this to infinity, before people figure out that we actually cannot do this to infinity in the first place."

Note: 
*QE3 is about using MBS (a much more finite market than Treasuries) to inject liquidity, and QE3 is not about using Treasuries to inject liquidity. There is no kitchen sink to throw. 
*For financial markets and effects to economies, LDMR negative returns will set in (refer to previous write-up: http://donovan-ang.blogspot.sg/2012/09/spx-correlation-with-qe1-qe2-ot-and-qe3.html).

Law of Diminishing Marginal Returns: 

Negative Returns Are Going to Be Priced In

USD-JPY: 17 September 2012, Monday, 7.37am

USD-JPY: 17 September 2012, Monday, 7.37am

In my previous preview on USDJPY, i mentioned of the possibility of Bank of Japan (BOJ) intervening the Yen FX markets. See link below.

http://www.forexmindgames.com/2012/08/week-33-13-17-aug-trade-previews-part-1.html

Thus far, nothing has happened yet. However, i believe the intervention is near. Remember that Central Bankers have political pressure to maintain the stability of their country's currency. Japan is a mainly export-oriented country. Think of Sony, Toyota, Toshiba, Honda, Nintendo, Yamaha, and the likes of many other Japanese conglomerates and it is not difficult to see how exports are important to the Japanese economy. Japan is a country which relies strongly on their exports, hence, they would often seek to keep their currency weak or at least maintain stability. When the Yen over-strengthens, government officials will voice their displeasures through the media. It is often a hint to currency speculators to get out of the turf. 

When the same rhetoric such as:

"Watch out and get out of the way!! I am going to do something soon!!" 

is repeated multiple times by the Japanese officials, the market has been fore-warned. We are the retail traders. We do not have the financial muscles to go against the markets. In the forex ocean, we are the shrimps, and we follow the whales. If BOJ does intervene, watch for a 200-300pips USD-JPY bullish spike in a single day.

Potential intervention zone is around 75.50-77.00. How to trade this intervention? Open a sub-account. Transfer a small amount of money to this sub-account. Highly important: you may need to hold this trade for weeks. So do ensure you have enough money in the sub-account to meet the weekend margin requirements. 

Place a limit buy order anywhere from 75.50-77.00
Stop loss below 75.00
Target profit 80.00

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The following quality article is contributed by FMG (Derrick) who is an active forex trader. He is also the webmaster of http://www.forexmindgames.com/ and his contribution is published as we both hold the same judgement and view on USDJPY.

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SPX Correlation with QE1, QE2, OT and QE3

The Law of Diminishing Marginal Returns at Work

The following shows the SPX correlation with QE1, QE2, OT and lets us have a rough guide of how QE3 would be like. 

In Economics Theory, there is always the Law of Diminishing Marginal Returns (LDMR). When the maximum marginal returns has reached, the returns start to get less and can potentially turn into negative returns with each increment of a specific X.

The SPX is currently behaving with all the characteristics of the LDMR. 

When too much money floods the market, it is initially good, as it can depress the interest rates and stimulate production. Incomes increase while inflation levels are subdued in a recessionary economic environment; however, the effect becomes less and less with each flooding operation (Q.E) as can be seen from the SPX chart (Cost of Production C.O.P eating up growth); flooding operation will reach a point where negative returns set in, which in this case, the now over-excessive liquidity-stimulated inflation (on oil, raw materials for production, necessities) will maliciously eat into growth, corrode GDP, evaporate employment, and spark another depressing vicious cycle even though interest rate can still theoretically remain low. The negatives will  flex over the positives which is the point LDMR sets in. 

Before the QE3 was implemented, the media and majority of funds worldside had already anticipated it. Likely, QE3 has been absorbed by the market in the several weeks leading to the QE3 announcement, and the market may need to start pricing in the negative returns now. This will go with market selling/distributions as oil spikes up and while majority of market herd (retailers/small fishes/investors/everyone with experience in QE1 and QE2 expecting market to continue to rally) are buying into it. Classical conditioning at work is often what kills majority of market participants because they are already brained-washed based on the previous two or three histories they had. 

The relatively good or steady performance in financial markets should, at best, tide until the US presidential election. At worst, selling may start before one even anticipates it. During this time to presidential election, it is highly likely that Big Hands and Insiders are engaging in distributions and secret sellings/off-loadings to majority of market participants/investors, who are still classical conditioned based on their experiences with QE1 and QE2. They may find that their experience with QE3 or QEx differs from what they would expect as market likes to do the opposite.

Related:
http://donovan-ang.blogspot.sg/2012/09/qe-mortgaged-back-securities-and.html

Midas: 9 September 2012, Sunday, 1.10pm

MIDAS: FREE MONEY DROPPING FROM THE SKY. 

Midas: A China Infrastructure Play, Free Money is dropping from the sky now, grab it before it rockets more 

(Midas: 9 September 2012, Sunday, 1.10pm)

Based on Donovan's Technical Analysis, Midas 44cents target is a guarantee, assuming ceteris paribus. 

Based on price-volume analysis, there is also a very high chance that upon hitting 44cents major resistance, Midas will retrace slightly before blasting past 44cents resistance. Advanced Technical Analysis signals Big Hands are already in Midas. Based on my judgement, this is what I would label as free money dropping from the sky. Grab and laugh all the way to the bank.

Blasting past 44cents will result in a new bull market trend for MIDAS. 

Note that this is a China Infrastructure (Rail Road) Play. It is one stock that will be independent of big markets directions due to fundamentals and government policies. The Technical side suggests re-accumulation had been completed and a pump-up action to take over now.