20090926 - EURPLN, CHFPLN

The EURPLN is still in the area 4.00-4.20:



The CHFPLN has broken last high of 2.76, but it's still below the important level of 2.80:



I would not yet say the downtrend reversed, but the CHFPLN needs to be continuously observed now.

I’m going for holidays, there probably will be no updates for about two next weeks.

(picture shamelessly stolen from First Choice)

20090925

The WIG Index fell -0.36%:



The volume was quite low, but both oscillators seem to confirm current rally.

The current swing can be classified as confirmation of the support of 38000; however, it is only guessing game and we shall not build our strategy on that kind of forecasts.

G20 leaders are discussing security of the banking sector (here)

Sources:
[http://www.marketwatch.com/story/g20-leaders-target-bank-reforms-see-turnaround-2009-09-25]
http://en.wikipedia.org/wiki/G-20_major_economies]

20090924

The WIG Index fell -0.41%:



The market lost some points, but still above the level of 38000. Also, the yesterday's gap has been closed. Oscillators are confirming the rally.
There is not much to say - we should be using our strategies to enter trades (always with stop-loss orders).

Quite interesting article about volume's interpretation (here).

Prime Minister Donald Tusk criticized Fitch Ratings agency's report, indicating the Poland's state of public finances has worsened (here or here). Bossa.pl published an interesting article on objectivity in rating agencies (here).

Note:
Lately I have received few questions about polish mortgages.

The most common question is if to buy now. Generally speaking, I believe the answer is yes. Unfortunately, this is not so simple, but I will try to show my point of view.
Firstly, the Polish real estate market was not hit hard by crisis; it's my subjective opinion, but compare -10~15% loss of value in Poland (here) vs. average -20~40% loss of real estate's value in United States (here or here).
There is also government's mortgage subsidization program ongoing (polish: "Rodzina na swoim", here), which helps preventing further price drop. That gives us good economic base.
There are three most important things in every real estate's investment: localization, localization and localization.
For investment purposes we shall consider developed cities (like Warsaw, Cracow, Wroclaw, Poznan, etc.) with already developed infrastructure, liquid real estate market and many potential tenants.
The real estate has also its maintenance costs - manager's fees, reparations fund, rent-tax, land-tax, electricity and other utilities, etc. Even, when you pass most of those costs to inhabitants, there will be some amounts to be payed by you.
Also, don't expect the property to be rented the full year - people tend to change places ca.2 years. Moreover, you should visit your property from time to time to check if it is not being damaged by tenants.
Another issue might be available credit options. Unfortunately, not many of us have enough resources to pay for a property in full. Good summary of available credit options can be found here.
Nowadays, the interest rates are quite high (4-6% + LIBOR), I believe they shall go lower soon. However I don't think we will have good offers (like 1% + LIBOR) anytime soon.
Buying real estate is quite complex process and it requires considerable amount of time later. You shall not rush into it and it has to be well thought-out decision.
At first, check if you have enough resources and spare time. Make realistic assumptions - the property prices and average rents can be found in few portals (i.e.: szybko.pl, www.nieruchomosci.pl, www.emieszkania.com.pl or local agent www.nieruchomoscidolnoslaskie.pl) and try to forecast expected cashflow and calculate return of interest.
Being a rentier is not an easy, however the real estates offer a lifelong and stable income.

Sources:
[http://www.bloomberg.com/apps/news?pid=20601085&sid=afhO5.tZlbY8]
[http://blogi.bossa.pl/2009/09/23/agencje-„obiektywizmu-czy-agencje-„sprzecznych-interesow (via Google Language Tools)]
[http://www.parkiet.com/artykul/7,851975_Tusk__Fitch_nieadekwatny.html (via Google Language Tools)]
[http://investmenttools.com/median_and_average_sales_prices_of_houses_sold_in_the_us.htm#median]
[http://www.egospodarka.pl/44808,Rynek-nieruchomosci-w-Polsce-IX-2009,1,39,1.html (via Google Language Tools)]
[http://seekingalpha.com/article/159037-lehman-s-130-billion-loss-went-out-with-the-market]
[http://www.rodzinanaswoim.pl (via Google Language Tools)]
[http://www.najlepszykredyt.info/pozyczkihipoteczne]
[http://www.swing-trade-stocks.com/stock-chart-volume.html]

20090923

The WIG Index gain +0.77%:



As per morning's note (this post) the buy signal has been generated. We should also note oscilators' positive divergences and quite high volume.

The target from potential double bottom formation is ca.40700. This formation is quite reliable - only 3% failure rate after breakout (Encyclopedia of
Chart Patterns, T.N.Bulkowski).

Sources:
[http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:double_bottom_revers]

20090922

The WIG Index gain +4.19%:



The technical outlook changed dramatically - oscillators have made higher high and we can see positive divergence now. Todays rally was accompanied with huge volume with is good sign as well.

Nevertheless, the last high (ca.38000) has not been broken yet (price is still in error margin) and there was no buy signal generated today. Therefore, our descending triangle formation has not been negated yet.

However, tomorrow's high open would generate buy signal and negate bearish formation. We might also consider double bottom formation then (with target ca.40700, hourly chart):



However, I believe we should place our buy orders only when current high is taken.

More troubles for banks ahead (here).

Note from 2009/09/23:
It seems today's open was quite high (it's ca.38700 now). Therefore, the descending triangle formation has been negated and buy signal has been generated.

Sources:
[http://seekingalpha.com/article/162634-more-trouble-brewing-for-banking-sector]
[http://stockcharts.com/help/doku.php?id=chart_school:chart_analysis:chart_patterns:descending_triangle]
[http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:double_bottom_revers]

20090921

The WIG Index fell -0.51%:



Again, not much can be told about current setup.

The chart looks bearish (subjective opinion), but the market hasn't decided direction yet and we have to wait.

Some thoughts about few indicators (i.a.: +20%, net flow) (here).

US companies seek for potential mergers (here)

Poland might start increasing interest rates (here).

Sources:
[http://www.marketwatch.com/story/merger-stirrings-bode-well-for-stocks-sp-says-2009-09-21]
[ http://seekingalpha.com/article/161760-poland-higher-interest-rates-coming]
[http://seekingalpha.com/article/162316-busting-yet-another-market-indicator-myth]

20090919 - EURPLN, CHFPLN

The breakout was retraced quite fast and both currencies seem to be back to their old areas.

The EURPLN went back below the resistance of ca.4.20 and is still above psychological barrier of 4.00:



The CHFPLN did not break resistance of 2.80:



In my (subjective) opinion the breakouts should be qualified as fake ones and we shall still wait for confirmation.

20090918

I am unable to post new chart today.

However, not much have changed and we are still in the area of 38000 - 35700. We have to simply wait for market action, before we decide what to do next.

20090917

The Wig Index gain +0.79%



The overall picture is quite bearish, but we still did not generate sell signal. We have simply to wait and react accordingly.

20090916

The WIG Index gain +1.79%:



Not much new can be said now. We might recognize descending triangle formation, which is quite bearish pattern (with target level ca.32100). However, we are still balancing on the support line (ca.35700) and the sell signal has not been generated yet.

On the other side, the US market shows very positive signs as S&P500 has made higher high.

Sources:
[http://stockcharts.com/help/doku.php?id=chart_school:chart_analysis:chart_patterns:descending_triangle]

20090915

The WIG Index gain +0.30%:



The sell signal was not generated today and we have to wait for proper market action - everything else is just guessing game.

Ben Bernanke declares recession is very likely over, however the economy's recover will be very slow (here). Also, his published crisis' remarks are worth-reading (here).

Sources:
[http://www.marketwatch.com/story/bernanke-declares-the-recession-over-2009-09-15]
[http://federalreserve.gov/newsevents/speech/bernanke20090821a.htm]

20090914

The WIG Index lost -2.09%:



The WIG Index is on the edge on another sell signal. The oscillators are showing negative divergence, but we have to wait for support (ca.35700) breakout.
There is no reason for being into stocks, when market shows weakness.

Nevertheless, it's quite subjective, but I won't signal primary trend reversal unless we break the level of 29200.

We should also note the breakout on EURPLN chart:



And also on CHFPLN chart:



We might be exiting the consolidation now, however we shall wait for confirmation.

20090912 - EURPLN, CHFPLN

Situation has not changed since last post.
EURPLN is still in the area 4.00 - 4.20:



The CHFPLN chart looks alike:



Thus, we shall still wait for market action.

20090911

Unfortunately, I was not able to put a new chart today.

Nevertheless, situation is still unclear - it such cases I prefer to be out of the market. We should wait for confirmed breakout of the level of 38000 (yesterday's high) or 35700 (last week's low).

20090910

The WIG Index fell -1.37%:



From technical point of view we have daily buy signal (crossing the level of 37700). Also, the S&P500 has made higher high. Form other side, the oscillators are showing negative divergence.

Personally, I'm not sure what to do and I don't think the situation is clear enough, but we should put emotions aside.

20090909 - 300th entry

Welcome in 300th entry in this blog.
The WIG Index gain +0.73%:



Current setup can be interpreted in many ways - we might as well be confirming the resistance (ca.37800) before continuation of fall, or continuing the long-term rally.
In such situation it is generally better to stay out of market and wait.

Let's take a look at global view of the Polish market:



Since last global review (this post), we have gained quite a number of points. As can be noted, we are near the important level of 50% retracement (ca.39500). Technically speaking - the primary uptrend has not been negated yet.
However, we have gained almost +100% in little more than half a year, without any major correction and that can worry us.

Economic outlook seems to be much better than half a year ago. There are positive news from global economy. Bailouts are quite controversial and their long-term effects are yet to be known, but governments restored at least some liquidity in the market.

As for Poland - our country proved to be quite resistant to world crisis. In my opinion there were several reasons: strong internal market (ca.70% of Poland's GDP), lack of more complex (and leveraged) financial instruments, conservative mortgage policy, general weakness of PLN, cheap and qualified labor, immigrants' money transfers, etc. Poland was one of the few countries who did not formally reported recession and that is very good sign for stock market.

And for the end - Polish History in 10 minutes clip.

Sources:
[http://www.youtube.com/watch?v=Quld5950v6w]
[http://en.wikipedia.org/wiki/Gross_domestic_product]

20090908

The WIG Index fell -0.19%:



The daily trend is still broken and there is no technical reason to be long now.

The USDEUR falls to lowest levels in 2009 (here).

Note:
It seems the Contact Form (option in the right menu) is becoming quite popular and I have got few questions on my mail to answer. I will keep answering them when possible.

First of all - I don't try to forecast the market. I don't think it's possible to do it right repetitively for longer. Instead - let's just follow the trend and use our money management rules. The maximum capital we risk in one transaction is 1-2% by book. And don't be disappointed by losing in 2 of 3 transactions - it's pretty OK (at least for me), just focus on squeezing those profitable ones, which is hard enough.

Second question - PLN vs. EUR, CHF or JPN. Unfortunately, the PLN is quite volatile currency. Current trend favours South direction and not much else can be said.

Sources:
[http://www.bloomberg.com/apps/news?pid=20601087&sid=aGI400UnO83c]

20090907

The WIG Index gain +3.15%:



Today's session was quite volatile, but the Index gained some points. However, the daily trend is still broken and the situation is not clear.

There is not much to say - current setup is risky and we have to wait for market action.

Gold reaches 1000 USD (here).

China market is still in downtrend (here or Shanghai Composite).

Sources:
[http://www.bloomberg.com/apps/news?pid=20601087&sid=aAgAWSs_xezk]
[http://www.marketwatch.com/story/china-data-storm-may-confirm-recovery-2009-09-07]

20090905 - EURPLN, CHFPLN

Last Tuesday we have noticed quite aggressive weakness of Polish Zloty; however, both currencies have returned to the level before this hike now.

The EURPLN is still above psychological barrier of 4.00:



The CHFPLN is near 2.70 now:



We are still waiting for market action; however, as per primary downtrend we shall expect fall continuation.

Note:
I got few questions how to fast and cheaply convert EUR or GBP to PLN from abroad.

The banks in Poland have spreads ca.6%.The currency exchange bureaus are usually cheaper, but any market timing is quite hard there.
This is one-way transaction, you convert to PLN and create savings account the same or next day. Generally speaking, don't even try to speculate with 3% commision - any reasonable strategy is killed with so high fees.
I personally use the eMax EUR account from mBank; spreads are a little bit smaler and there is no fee for receiving international transfer. The most important - conversion is done immediately when online access is used. The account is free of charge and you can have no fees on transfers when you register destination account before (o.5PLN with random transfer).
If you don't mind please use this link for registering with mBank - there is some partner system involved and any donation is welcomed.

20090904

The WIG Index gained +0.51%:



Both oscillators have made lower low and confirmed the fall. The volume was quite low, which can be interpreted as market's hesitance.
The primary uptrend is still intact, but it is not possible to tell if we rebounce now or fell again. We don't want to be in the market now - we might lose the up-move and few great trades, but protection of the capital always come first.

20090903

Unfortunately, I could not publish new chart this Thursday.


Nevertheless, not much has changed. The daily trend has been broken and we should wait until it reverses (it depends on reader's strategy of course).

20090902

The WIG Index fell -4.25%:



Unfortunately, the first scenario (yesterday's post) proved to be right and the fell was continued. The RSI oscillator has made lower low and therefore confirmed the fell. The volume was quite high over last two sessions.

The weekly uptrend is still intact, but we might want to wait until daily trend recovers and only observe the market now.

20090901

The WIG Index fell -1.53%:



The daily sell signal has been generated and that should be warning sign for us. The oscillators do not confirm the fall yet, but considering US market (S&P500 fell -2.21%), we can expect downward move continuation. Volume is quite hard to interpret lately.

We might also interpret current setup quite differently - the market will test the level of 36600 (previous higher high) and it will provide strong support. In my opinion such scenario is quite probable; however, this is quite emotional approach and we better stay out of trades until the daily trend will reverse back to uptrend.

We need to remember, out biggest concern should always be protecting the current gains, not to outsmart the market.

The economists say the recession in US is over (here).

Sources:
[http://www.marketwatch.com/story/recession-is-over-economists-say-2009-09-01]