20081231

This year's last session finished with loss -0.59%:



Year 2008 finished in a painful consolidation. General situation is not clear, this can be just steeping stone in free fall continuation or the long awaited-bottom:



What was the most important lesson this year? I believe it was to cut losses while they are still small. When primary trend is broken, we shouldn't hope there will be reversal, so we can retrieve our money. The price is important, not our feelings.

The Madoff's scam (here) as well as hedge funds speculative actions (here, anyway - they are supposed to be speculative) has damaged investors' trust in finance institutions. It was also the worst year since 1930 as per stock market year-to-date change (here). Those eight days will be specially remembered for sure.

There is no certain way to tell which direction market will go, but the odds are always on trend side. Calling a bottom is not a good idea with strong trend.

SaxoBank forecasts' for 2009 were presented in this post. We should also summarize the forecasts from Dec 2007 (here). Let's also listen to Jim Rogers in this video.

Happy Year 2009!

(image shamelessly stolen from here)

Sources:
[http://www.marketwatch.com/news/story/madoffs-alleged-fraud-claims-some/story.aspx?guid={C9E3CFD6-F502-4B26-817C-1A11B74448D0}]
[http://online.barrons.com/article/SB123033354851036281.html]
[http://www.marketwatch.com/news/story/US-stocks-rise-final-trading/story.aspx?guid={BBBD6586-03B8-424A-B002-96DB1CD56776}]
[http://money.cnn.com/2008/12/31/markets/markets_newyork/index.htm?postversion=2008123110]
[http://money.cnn.com/galleries/2008/news/0812/gallery.8_days_to_remember/index.html]
[http://ft.onet.pl/0,18895,advice_for_seasonal_seers_future_is_not_in_the_stars,artykul_ft.html]

20081230

There was bigger volume than yesterday and the WIG Index gained +1.72%:



General situation has not changed and we have to wait. However, this stagnation is much better than continuous falling and at least gives us some hope.

U.S. securities regulators said to have found another Madoff-like scheme - Creative Capital (here).

SaxoBank has published ten quite pessimistic forecasts for the year 2009 (here).

As for interesting articles - here is DJIA historical changes since its debut.

It seems, that banks of China and Warren Buffett are amassing cash and other liquid instruments (here). Cash is the king now.

Also note short session tomorrow (ends 13:35) and forced cancellation of all pending orders.

Sources:
[http://www2.saxobank.com/en/market-news-and-analysis/Pages/economic-predictions-2009.aspx]
[http://www.djindexes.com/mdsidx/downloads/DJIA_Hist_Comp.pdf]
[http://www.marketwatch.com/news/story/sec-says-halts-23-million/story.aspx?guid={0433C54B-0156-4091-94CE-952161C2C58B}]
[http://ft.onet.pl/0,19091,buffett_and_china_banks_top_cash-rich_groups_list,artykul_ft.html]

20081229

Today's session ended with small gain (+1.19%), but volume was minimal:



In general situation nothing really changed: buy in long-term, sell in medium- and short-term.

This week's sessions are as follow:

• 30th Dec - normal session,


• 31st Dec - short session (ends 13:35). All pending orders will be cancelled,


• 1st Jan - no session,


• 2nd Jan - no session.

The CHFPLN has broken 2.73 and this is bad news for polish mortgages:



The 2.73 was last monthly peek and that generates buy signal on long-term.

20081227 - EURPLN, CHFPLN

That's the last currency review this year, therefore let's see wider picture. The EURPLN weekly:



The EURLN is in long-term uptrend. As the trend tends to follow, the odds are 4.18 will be taken.

The CHFPLN still struggles below 2.73, near Fibo 61.8% level:



The CHFPLN is also in long-term uptrend, therefore we should expect level of 2.73 to be broken. However, we should really wait for break of 2.73, before we can say anything.

The polish mortgages have lower interest rates, nevertheless the CHFPLN exchange rates have quickly increased the amount payable. Therefore CHFPLN seem to be critical for polish homeowners. Unfortunately, the rising CHFPLN scenario is preferred here.

However, the currencies are kind of nasty to forecast. Generally speaking, this year was exceptionally hard as per global crisis, surprising news and rapidly changing interest rates. The volatility in the market has been tremendous and even the biggest players were hit.

20081223

The WIG Index continued its fall:



Unfortunately, not much can be said without further actions. It might be as well accumulation phase or just step before fall. This unclear situation seems to stress traders (here). Nevertheless, we need to observe the market continuously.

The polish interest rates has been cut 75 base points (here, via Google Language Tools).

This is the last session in this week. I would take this opportunity to wish you all of best. The best investment in happy family and good memories - money are just the tools to reach that:

(picture shamelessly stolen from here)

Sources:
[http://seekingalpha.com/article/111902-market-continues-to-frustrate-bears-and-bulls-alike]
[http://www.money.pl/gospodarka/wiadomosci/artykul/rpp;odwaznie;tnie;stopy,134,0,410502.html (via Google Language Tools)]

20081222

The WIG Index lost -1.46% with very low volume:



Obviously we have downtrend in medium- and short-term. However, we are still well above weekly low (24700). Therefore, no action should be taken.

This week there are only two sessions: Monday (today) and Tuesday.

Also, experts expect the PLN interest rates to be cut 50 base points in December (here via Google Language Tools).

Sources:
[http://www.money.pl/pieniadze/wiadomosci/artykul/rpp;obnizy;stopy;do;5;25;proc;,66,0,408898.html (via Google Language Tools)]

20081220 - EURPLN, CHFPLN

After breaking the month high (3.98), EURPLN continues its rally:



The uptrend is clearly visibly. We might want to project Fibo levels for target price forecast:



The Fibo 61.8% will be next important level (ca.4.27), but this is very subjective and we better focus on price-action.

Not much can be said about CHFPLN:



As long-term trend is up, the odds are CHFPLN will break the monthly high (2.73) and that are no good news for polish mortgages. Alternatively, it might be base for double tops formation. However, we need to wait for breakout before we can say anything.

20081219

Today's session was unusually calm and volume is low as for Triple Witching day. Also, there are no changes in general situation (sell in medium- and short-term and buy in long-term):



It seems that large amount of open contracts has been rolled to the next series FW20H09 (63399 open positions):

20081218

It seems the WIG Index has lost its momentum:



There is possible double top intraday formation with target price ca.26000:



The intraday chart shows us lower high & lower low pattern. That gives us the sell signal in both medium- and short-term.

However, this week can be speculative as per large amount of open futures for WIG Index. But there are new rules for Friday, that can limit the volatility aspects  (here).

Sources:
[http://www.money.pl/gielda/wiadomosci/artykul/gpw;znalazla;bat;na;spekulantow,254,0,409598.html (via Google Language Tools)]

20081217

Today's huge drop is well visible on daily chart:



More details on intraday chart:



However, it did not change much in general situation. Volatility is huge and we really shall expect it in this week. It's hard to forecast short- and medium-term trends now.

20081216

The WIG Index rallied today +1.92%:



Intraday chart shows us more details:



Higher daily volume seems to confirm the uptrend. We have also closed above 28000 and that looks promising. Nevertheless, we also have a warning for large amount of WIG20 future contracts (here). Ca.40% of all short positions have been opened by one foreign investor.

FED cuts rates to record low range of 0 to 0.25% (here). That technically means US banks can get USD almost for free.

Brian Shannon in his video still discourages us from being aggressive (here) .

The EURPLN has crossed the important level of 3.9819 (this post). That generated long-term buy signal:



Situation in CHFPLN is not so clear (medium-term buy signal, but still below monthly high) and we need to wait, but overall this are no good news for polish mortgages:



Sources:
[http://gielda.wp.pl/index.html?a=1&b=1&c=11&POD=6&P[numer]=10672380&P[obr]=pa (via Google Language Tools)]
[http://www.marketwatch.com/news/story/Fed-slashes-rates-vows-keep/story.aspx?guid={CA4128E7-21B4-4563-A28E-9170AEBFC789}]

20081215

The situation hasn't changed too much:



More details on intraday chart:



Small volume and coming Triple Witching day (this Friday) make the general situation confusing. FW20Z08's volume is quite big, there we can expect some volatility. I believe that being defensive or having small position is the best approach now. Brian Shannon mentions general hesitance in his video also in US market.

There is an interesting speech from Investor and Trader blog (here), aside other things, there is 50 million fraud mentioned (more on it below).

More information on Bernard L.Madoff Investment Securities LLC: freezing assets' order  (here), estimated exposures (here), general discussion on impact (here), Bernard Madoff Wikipedia entry and Bloomberg's video news (here). You can still read company profile here.

Sources:
[http://www.madoff.com]
[http://www.irishtimes.com/newspaper/breaking/2008/1215/breaking9.htm]
[http://www.madoff.com/letters/Signedorder.pdf]
[http://www.madoff.com/dis/display.asp?id=203&mode=1&home=1]
[http://en.wikipedia.org/wiki/Bernard_L._Madoff]
[http://www.marketwatch.com/news/story/stock-futures-flat-firms-outline/story.aspx?guid={F0DF68A5-B857-483B-9F31-AF8DA36A207C}]
[http://www.investopedia.com/terms/t/triplewitchinghour.asp]

20081213 - EURPLN, CHFPLN

The EURPLN is in a important moment:



The pattern of higher lows & higher highs has continued for quite a time. The price has reach level of the initial November's spike (3.9819). Crossing this level will generate another long-term buy signal. The medium-term uptrend will be broken if 3.73 is crossed.

The CHFPLN situation has not changed too much. Price is still between weekly high/low (2.5659 and 2.4146 respectively), you can also note the uptrend line has been broken:



The Switzerland decided to cut interest rates to 0.5% (here). That are good news for polish mortgages, as this action has resulted in massive LIBOR CHF drop:



Sources:
[http://en.wikipedia.org/wiki/LIBOR]
[http://www.iht.com/articles/2008/12/11/business/rates.php]

20081212

The WIG Index seem to continue its fall:



Intraday chart shows us more details:



The general situation still looks promising. Today's drop was accompanied by small volume and index can be rebouncing from triangle upper trendline. Maybe we left the first conception of symmetrical triangle (this post) too soon as it can forecast the range of uptrend swing. Nevertheless, I suggest to be rather defensive and wait for test of 29600.

The foreclosures number grows in US (here).

It seems there is hope for US Automakers (here).

And another fraud scam, this time for 50 million USD (here).

Sources:
[http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ2Wj18nV2_Q]
[http://seekingalpha.com/article/110463-scary-foreclosure-numbers-scarier-prospects]
[http://news.yahoo.com/s/nm/20081212/bs_nm/us_madoff_arrest_3]

20081211

The WIG Index has dropped 0.53%:



Intraday chart shows we are still above 28000:



Generally speaking, it seems the Fibo levels work well lately. We are still in uptrend, volume  as well as oscillators seem to confirm the north direction. Nevertheless, I'm still playing defensive and waiting for test of 29600.

The Big Three US automakers won't get any help from US goverment (here).

Here is quite interesting speech about greed from Investing and Trading blog.

There is no Brian's video for today, but there is quite educational entry instead.

Sources:
[http://video.google.com/videoplay?docid=-7610088285632568722&hl=en]
[http://www.marketwatch.com/news/story/Automakers-bailout-falls-apart-Senate/story.aspx?guid={01358784-ABDC-4333-8C55-2FA96BB138AE}]
[http://alphatrends.blogspot.com/2008/12/stock-market-trend-analysis-121108.html]

20081210

The WIG Index has reached Fibo 161.8% level:



Intraday chart shows us more details (i.e: gap 28480 -28750 from 10th Nov):



There is no big volume in this rally, but hopefully more and more traders will join. We are in uptrend - aside from that not much can be said, but being careful does not hurt - take it slow.

Brian's video for today.

20081209

The WIG Index rallied again today:



The intraday chart shows more details:



The weekly peak of 28000 has been taken and that's long-term buy signal. The confirmation for more careful traders (I am one) will be breaking the level of 29600. I think we can leave the symmetrical triangle conception (from this post) as for now and maybe draw another triangle with target price ca.30000.

What are our options now? We can search for single corporations (there are few promising stocks there) or invest in index (for example via UCW20AOPEN certificates). Be sure to always apply your risk management rules to size a trade and stick to your stoploss orders.

We still need to be careful - that's just one sign of trend reversal. Daily volume seems to confirm uptrend. If this is the real bottom there will be many opportunities to get into the market and we shouldn't try to catch the bottom.

Brian's advice in his daily video (here) is to stay defensive.

20081208

The WIG Index has broken the trendline:



More details are visible on intraday chart:



There is a need to review the conception of symmetrical triangle as can be noted on above chart. The volume is not confirming today's rally, but market is giving us clues (broken trend line, positive divergences, buy signal in short- and medium-term). The weekly peak of 28000 has been tested, but not significantly broken and therefore we still don't have any signal today. Breaking the 29600 will serve as a confirmation.

Generally speaking, there is still no technical reason to buy long-term positions; nevertheless, it could change very soon. Trend reversal should be also confirmed in US market, thus Brian Shannon's video is good source of information.

COMEX seems to have some problems with gold delivery (here).

More on shrinking hedge fund industry (here).

And just for pure fun - A musical tribute to the Financial Crisis of 2008.

Sources:
[http://ft.onet.pl/0,18161,hedge_funds_are_going_down_with_dignity,artykul_ft.html]
[http://www.financialsense.com/editorials/fekete/2008/1205.html]

20081206 - EURPLN, CHFPLN

The EURPLN crossed weekly high (3.3914) and therefore new medium-term buy signal was generated:



The long-term buy signal will be generated after crossing monthly high (3.9819).

In last post we spoted the potential symmetrical triangle formation in CHFPLN chart. However, the formation seems to be no longer valid: breakout come too late (it's expected to break around 50-75% formation width) and there is no dynamic move after (the weekly high has not been broken):



Therefore, not much can be said about CHFPLN now. The price is still in long- (monthly) and medium-term (weekly) uptrend. Crossing 2.3084 will negate the medium-term buy signal.

20081205

The WIG Index did not cross trendline:



The intraday chart shows bounce:

The triangle concept has not been broken, but we still have no breakout either - therefore we shall treat this formation as a potential one only.

In medium and short-term we are still above last daily/intraday low, therefore the price is in uptrend. Also, the market shows some signs of strength: positive divergences in RSI and CCI, uptrend (or at least higher high) in few blue chip corporations (i.e.: BRE Bank SA, PBG SA, PGNIG). Nevertheless, long-term situation (weekly chart) has not been changed and the odds are in downtrend continuation (as per long-term signal).

Brian Shannon is quite optimistic in his daily video (here).

Deutsche Bank published an interesting paper on bonds - for quick summarization check SeekingAlpha portal (here).

The unemployment in US continues to grow (here).

Sources:
[http://seekingalpha.com/article/109401-review-of-100-years-of-corporate-bond-returns-revisited]
[http://blogs.wsj.com/economics/2008/12/05/jobs-report-how-much-worse-can-it-get]

20081204

The WIG Index is in quite interesting place - exactly at trendline from symmetrical triangle:



Intraday chart shows more details:



Nevertheless, formations are subjective and the breakout can be tricky, like the one from May 2008:



A must read - central banks around the world have massively lowered their interest rates (here).

It seems few polish companies lost money on currency options (here). Grzegorz Zalewski, blogger from Bossa.pl, explains it pretty well (here).

Brett Steenbarger has provided quick summarization (here) of technical strength of various sectors in S&P500.

And something (here) about Buy&Hold strategies.

Sources:
[http://gospodarka.gazeta.pl/gospodarka/1,33181,6032119,Przedsiebiorcy_placza_nad_opcjami.html (via Google Language Tools)]
[http://gielda.onet.pl/0,1874780,wiadomosci.html (via Google Language Tools)]
[http://blogi.bossa.pl/?p=709 (via Google Language Tools)]
[http://seekingalpha.com/article/109168-s-p-500-sector-update-shows-mixed-picture]
[http://articles.moneycentral.msn.com/Investing/StrategyLab/Rnd18/P4/DisciplinedInvestorJournal20081203.aspx]

20081203

The WIG Index has made higher today, but finally closed lower then yesterday:



Note different size of intraday symmetrical triangle. I'm not sure which notation is correct, but if we are not sure, then better use smaller one:



Situation is not clear, we are still waiting for breakout.

20081202

Today's rally has proved that we shall never stick to any forecasts:



The intraday chart shows us today's rally in more details:



Today's rally was impressive (note how the gap from 24th Nov acted as support), but I'm in doubt as it was not accompanied by big volume. Generally speaking, situation looks better and we can note buyers, but there is still no reason to make long positions. The WIG Index still stays in symmetrical triangle and below last weekly high (29600). Therefore, we still have sell signal in long-term (weekly) and buy signal in medium- (daily) and short-term (intraday).

Bankier.pl portal has published an interesting article about origins of speculative bubbles (here).

Also, US economy is officially in recession (here).

Sources:
[http://www.bankier.pl/wiadomosc/Tajemnica-baniek-spekulacyjnych-1872060.html (via Google Language Tools)]
[http://www.marketwatch.com/news/story/No-surprise-US-officially-recession/story.aspx?guid={FB24B86D-7611-4783-955C-7482CA23FD99}]