August 12-16, 2011 – A Market Made for Traders – Enjoy

I’m going to be away from the markets between August 12-16, 2011 for a short vacation with my loved ones.

I’ll be missing out quite a lot of the action from the markets during those times, but I hope a lot of you will make money. Here are a few notable things I’ve been taking notes on, with the markets.

1.) So what?

US markets crashed on the fears of France being downgraded but Asia just chose to ignore most of the news. Philippine stocks rallied. Hang Seng and Shanghai Composite which I believe are barometers for just how much the global economy hinges on the Chinese consumers finally got tired of selling. It was still a choppy session, but most managed to be off of its lows. At least HSI is just down 290 points or something, when you’d normally expect it to drop another big 500 or 1000 points (which is very normal). Shanghai managed to go up 1.27% with most airlines rallying.

2.)Steven Place wrote a very important article “Evidence that Gold may have Peaked in the short term”

There are only two times that Gold has disconnected from the S&P and that was during the March 2009 bottom and right now. I totally expect some mean reversion here sometime some. Gold has to come down and stock have to go back up soon.

Personal Comment:

Gold will not drop massively, and when the market make a short-term relief rally (not to retest the highs, but maybe just retrace half of the slide?) will boost the Philippine mining leaders all the more (LC,MA,PX) and bring along all the other mining second liners that want to join with the party (E.g. NI,ORE etc).  I think the fact that ZHI and PWR had massive ranges both on the upside and the downside should already caution all the public who don’t have a clue on trading, not to interfere with stocks you don’t know how to play with.  Have a risk reward.  This is a trader’s market, and not some buy and hope market.

3.) Insiders are buying the dips.  Market Folly writes:

To pull all this data, we used Insider Trade Reports who says that “over four decades of academic research has shown that by following in the footsteps of company insiders and buying the stocks that they are buying, you can outperform the market by 6% to 10.2% per year.”

*I’m sorry I have to cut this short, I think my flight is about to leave.

Enjoy the markets. It’s a trader’s haven.

We have half the crazy volatility in 2008, which means it’s buy fear and sell the euphoria when/if it comes. (Well Philippines was euphoric awhile ago, and maybe tomorrow too?)

Reference Links: http://www.bespokeinvest.com/thinkbig/2011/8/10/sp-500-5-day-average-hilo-spread-at-533.html

Also read Joshua Brown’s The Wall Street Decepticon Traderbots. Really Funny! http://www.thereformedbroker.com/2010/10/04/13756/

-The Faceless Trader