Testing New System Update

* I call it HE System.. (Head Egg).. hahahaha

1-13) Start 29.10.2010, Up +381.. (sorry i'm lazy to post one by one)

14)25.11>LONG 3214-SELL 3377 = +163 (30.11) total> +544

15)30.11>SHOT 3377-BUY ?? =

*15 trades (9win- 5losses), 1 still open Shot

My new, faster swing system trading (still TESTING mode)

*This is the 14th trade if i not mistaken, i tested the new system few days back and this is the current LONG holding... FEB CPO LONG 3214 (23/11/2010)

*My backtest started from 29/10/2010 and already up about 380+/- pts (i cannot remember the exact winning points, left the record in my office).. maybe i will post the tested NEW system here by tomorrow..

*Base from the date started this new system beat my current ROJAK BEST OF THE BEST SYSTEM by about 100pts+/- (not so sure, cannot remember) but the downside this new system give signal more often 14 against 3.. hahaha

*I'll test till year end to see how it perform against my proven ROJAK SYSTEM

CPO Chart Update Long entry (SAR)

*My new Feb CPO LONG 3266.. SO which way now? Up Up.. hmmm totally no idea

CPO Update: Turn LONG

*CPO i turn FEB contract LONG 3266, its frustrating to let go about 180pts winning (SHOT 3288) and only can win 22pts by turning Long today, what to do that is the downside of trend following :)

*FKLI still same case, still holding November LONG 1505 (roll)..

An Introduction To CANDLESTICKS, PART 4

PART 4

Buy on Greed, Sell on Fear

There are only two forces behind the supply and demand forces that
drive a stock's price higher or lower.

Those forces are the emotional forces of fear and greed. To illustrate
this point we refer to Figure 11.


Figure 11

Suppose you are a trader observing the bullish rally of Stock XYZ at
the beginning of the 3rd bullish green candlestick, and considering an
entry.

You have witnessed the stock rally huge for two days and know that
each trader who entered on the first two days is now a big winner.

Based on the emotion of greed you decide to enter at that beginning of
the 3 day, and mentally count your profits as the price rallies to a new
high.

After the stock closes, you brag to your friends at the golf course
regarding the great trade that you made that day.

You go home from the golf course and celebrate the victory with your
spouse and maybe even discuss how you will use the extra money that
you have earned through the trade.

Now keep in mind that the profit is only on paper and not one penny
has been earned yet.

The next morning you check the price of your position, with
expectations that your bullish stock will rocket to the moon! Now
imagine the emotion that goes through your mind when your position
not only fails to go higher, but also opens below your entry price.

What is the emotion that flows through your body as you not only see
your profits erode before your eyes, but now rob your account of
precious capital?

The emotion that you will experience is undoubtedly fear and will
prompt you to scramble to liquidate your position as soon as possible
to minimize your losses.

Now consider that there were also 2 or 3 thousand additional traders
who entered the same stock at around the same price with the hopes
of the gaining the same
profit.

All of these traders will be tripping over themselves trying to get out of
the stock.

As was illustrated in the previous section, this increase in fear results
in an increase in supply of the stock relative to the increase in
demand, and triggers the sharp decline in the price.

The deeper the red candlestick cuts into the bullish green candlesticks,
the more traders are thrown into losing positions, and thus the further
the price decline.

Perhaps you are beginning to realize the power of emotions in price
movements of a stock.

The technical analyst through candlestick reading is trained to read
this greed and fear emotions in the market and capitalize on them.

Capitalizing on Fear and Greed

From the previous section, we determined that price movements result
from massive emotions of fear and greed regarding trader's position in
the market with a given stock.

Recognizing the footprints of greed and fear is not difficult.
Recognizing the signs that the rally or decline before it happens is the
difficult part of trading. How many times has this situation happened
to you: You enter a trade based on a bullish reversal signal, but then
exit on a slight pull back only too see the stock rally to a new high
after you exit.

Or how often have you held on to a stock that experiences a bearish
pull back in hopes that it will turn around, only to see the stock
plummet to new lows before you finally concede to defeat and exit.

Unfortunately, there is no system that can predict with 100% accuracy
exactly where a greed rally or fear sell off begins. There are;
however, techniques based on candlestick patterns that help us locate
probable areas for these turning points. The rest of this section will
explore the techniques in identifying those probable areas that
properly managed will result in profits for the trader in
the long run.

My CPO FEB contract Chart Update (SHOT 3288)

* SHOT 3288 (16/11/2010) The Chart says everything.. :)

CPO Commentary

News Bites

* Market Talk: Market expected that overall November exports would increase 8%-10% from a month earlier and will remain strong into the first half of December.

Cargo surveyor ITS on last Sat pegged Malaysia’s Nov 1-20 days palm oil export at 1,053,520 metric tons, increased 11.5% from the last correspondent period. The figures are close to early expectation of around 1.06 million tons. Cargo surveyors SGS is scheduled to release its exports estimation on today.

Outlook

* Fundamental: CPO prices are likely to be supportive on expectation of higher exports in November and that Indonesia may increase export levy. Watch for export estimation due today.

* Technical: Despite CPO futures settled marginally 8 points higher last Friday, the daily MACD turned bearish mode, coincided with daily Parabolic SAR indicating a sell signal, likely indication a pause on the medium-term uptrend. Also, a daily Doji candle formed after a significant uptrend last Friday, signifying prices are indecision in direction. Note that, a black daily candle to close below 3326, closing of Nov 19, will confirm the evening star reversal chart pattern and accelerate the selling momentum to test 3114, low of Nov 18.

With daily MACD and Parabolic indicating a sell signal, we would advise on selling on strength with a stop loss at daily Parabolic SAR of 3417. Nevertheless, we believe the long-term uptrend and Elliott primary wave count are still intact and the medium-term correction is coincided with the daily primary wave 4 correction. Any breakout above the said resistance will likely to indicate a continuation of daily primary impulse wave 5.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)

Soybean Oil Daily Chart

* See for yourself, lower high in the making & very bearish candle (what they call it Engulfing Something??) ... But if you ask me whats going to happen to Soybean Oil or Crude Palm Oil, further down or up, seriously i've no idea.

Tun Dr. Mahathir Mohamad Facebook Posting

THE STOCK MARKET

by Dr. Mahathir bin Mohamad on Friday, November 19, 2010 at 9:57am

1. Lately we have been seeing rather rapid increases in the Kuala Lumpur Composite Index. Those who play the stock market must be feeling very happy. Much money must be made by investors from capital gains.

2. Some people believe that the rise of the KLCI is an indicator of the healthy state of the Malaysian economy. This may be true but let me throw some cold water in the belief that the index indicates that the economy is doing very well.

3. It is doing fairly well, no doubt, but that is not enough to push the KLCI to record highs. What is happening is that a lot of foreign money is coming in to buy Malaysian stocks.

4.In itself it is not bad. It is also a kind of foreign direct investment (FDI). But this kind of FDI is not about setting up industries to produce goods for export. The latter will not be easily liquidated to take the invested capital out. The plants which are set up cannot be easily sold. The Investors will have to manage them through good and bad times to get a return on their investments.

5. But FDI in stocks and shares can be sold any time and the proceeds taken out.

6. Just as increases in investments push up share prices and the KLCI, rapid or massive divestments will push down the share prices and index.

7. We read in the papers that the Federal Reserve Bank of the United States is pumping US600 billion Dollars into the US economy. A part of this money will no doubt be used to invest in stock and shares of the developing economies. The result of this FDI-financed purchases will be a rise in the share prices and the KLCI.

8. In 1997-1998 the foreign investors pulled out their investments and the KLCI dropped from 1,300 to 262. Naturally a lot of local investors lost money. They could not meet margin calls nor raise money to augment collaterals for their bank loans.

9. The banks found themselves burdened with large numbers of non-performing loans and had to face the threat of bankruptcy.

10. Should the banks collapse the economy of the country will go into a tailspin. It did in 1997-1998. It will happen again should the foreign investors dump their Malaysian shares to take profits from capital gains.

11. Foreign funds, especially from the US coming in to invest in Malaysia's stock market at this time must be considered as hot money. I would not be suprised when the KLCI peaks the foreign investors will dump their shares and collect capital gains. The share prices will fall rapidly and Malaysians who had chased the shares on their way up will be asked to meet margin calls. If they fail they will lose a lot of money.

12. I hope I am wrong. But sometimes my predictions about money and markets have proven to be right. In any case I only own 200 Malayan Tobacco shares bought before I became Education Minister. I have nothing to gain or to lose, but the country and the stock market investors will lose.

The End of my LONG run for CPO..

* After a LONG run for CPO, today my system SCREAMING to SHOT.. this run generate profit about 552+/- points.. Now officially i'm holding SHOT 3288.. how long i'll hold this SHOT? hmmm wait n see, i have no answer..

CPO & FKLI update for Hari Raya Haji holiday

* CPO- I just roll my Long position to February contract this morning, my signal triggered and now i holding SHOT 3288 for February contract.

* FKLI- Still the same i'm holding my November month LONG 1505 (roll)..

CPO rollover today

* CPO i roll to February contract LONG 3357..

My CPO & FKLI - Daily chart entry

FKLI

CPO

* Enjoy..

CPO Commentary

News Bites

* Market Talk: CPO prices will continue their rally up to the middle of 2011 after hitting their highest level in over two year, Lee Yeow Chor, executive director of Malaysia's IOI Corp said.

A local broking house upwardly revised its projection on CPO prices to MYR2.700 per ton for 2010 and 2011 respectively, compared with early projection of MYR2,500 per tons due to weak Malaysian output and strong exports. Its commented that palm oil supply would remain tight in the first half of 2011 and would support the prices. However, CPO prices was expected to be capped to between MYR3,300 and MYR3,500 per ton.

Outlook

* Fundamental: We expect some selling pressure on spillover weakness from crude oil and soyoil losses in last Friday. Watch out the export estimation due today.

* Technical: Reuters Jefferies CRB Index broke down the daily uptrend channel of 307.16 and settled at 303.16 last Friday, signaling further weakness in general commodities in the near term. Also, CPO prices broke down the shortterm hourly uptrend channel with bearish hourly Parabolic SAR, increasing the shortterm selling momentum in the near term.

However, there are no major changes in the bullish daily indicators and hence we believe any correction in the near term is healthy for further price advancement in the long term basis. This is also coincide with the start of daily Elliott primary and minor corrective wave 4 with a rising short-term target of 3216, target of minor corrective wave 4, then 2809, target of primary corrective wave 4. Intraday traders are advised on selling accumulation around 3400 psychology resistant, unless any signs of bottoming and may mean another start of Elliott daily minor or primary impulse wave 5.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)

CPO Commentary

News Bites

* Market Talk: Market expected CPO prices could remain above MYR3,000 per ton for the rest of 2010 till first quarter of 2011 amid shrinking supply and as demand remains strong from China. Meanwhile, concerns of possible lower palm oil production continues as uncertain weather patterns triggered flood in palm oil growing region in Kedah and Perlis.

Outlook

* Fundamental: At the time this report is written, Palm Olein futures traded in Dalian Commodity Exchange is down by 4.07% and soyoil futures in CBOT down by 2.7%. We expect prices to tightly trace these two bourses ahead of weekend positioning.

* Technical: Overall technical remains friendly, though a note of caution emerged from the candlestick reading, whereby a daily long upper shadow occurred yesterday, typically a bearish signal particularly when it occurs near a high price level at or when the product is overbought, which in our case, the daily RSI is overbought at 84.247.

For trading purposes, we would advice trading on the hourly uptrend channel, which should begin the day with a resistance 3474 and support at 3372. The support line of the above mentioned channel coincides with weekly Fibonacci projection support of 3366. A breach of these support levels could potentially bring prices down to 3265, the observed low at Nov 8, and subsequently 3210, the rising gap.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)

Are You A Bull Or A Bear?

Casual acquaintances who come to learn know I trade for a living (something I rarely volunteer without being asked) will always ask whether I’m a bullish or bearish on the market or economy. My reply often irritates them when I say “I’m neither one – I’m just an opportunist.”

What I mean by that is that I go out of my way to avoid placing myself into a neat and tidy category that can influence my analysis of the markets and the stocks I trade. Although I’m far from perfect and sometimes let my opinions cloud my judgment (I am human after all), I do really try to do everything I can to look for opportunities on both sides of the market.

Many investors and also traders try to fit themselves into one neat category based on their opinions or of others who’ve they have come to respect. Even worse, those views are frequently tainted by how their portfolio is currently positioned (people want to be right after all) which can be both dangerous and quite unprofitable.

Believe it or not, some of the most profitable trades I’ve taken have been ones that run contrary to my personal views.

Case in point, I know several traders who are struggling now because they are very bearish about the market. While in principle I agree many of their views, I cannot let those views cloud both my analysis and trading. While I’m fairly certain there will be a time when their views will be proven correct, in this business timing is everything. Opinions after all, don’t pay the bills – only profitable trades do!

As you’ll soon learn if you haven’t already, there is no difference between being “early” and “wrong” in this market. Likewise, it pays to remember there were lots of hedge funds that went broke prior to March of 2000 because they shorted all of the Internet and tech stocks. These guys were proven to be right on the money much later on, but in reality they never were able to take full advantage of it because they lost so much money before the bear returned.

Remember this – in trading it isn’t about who is right or wrong. Instead it is all about who can make money and take advantage of the most opportunities in the present. Opinions are terrific things, but in most cases, you would be wise to set them aside and trade the market you see rather than the market you think you should or want to see.

* This report was originally published by The Kirk Report on April 6, 2004.

My Small Account Statement..

* As requested today i post my statement as per yesterday closing 10 November 2010, after this i'll only post by monthly basis IF only needed yaa..

The Number One Rule of Trading

By Craig Turner

If there is one thing I've learned in all my years in the financial markets, it is never add to a losing position. That means never "average down" a losing long position or "average up" a losing short position. This is even more important when using leverage. There is a very well-know saying, "your first loss is your best loss". What this means is you are best served taking a small loss before it becomes a larger loss, or even worse, a loss that eats up a majority of your trading capital. In order to avoid this major trading mistake, we must first understand why traders add to losers, why traders should not do this, and what they can do to stop it from happening.

Why Traders Add To Losing Positions

Traders stay in losing positions for only two reasons. Either they don't want to be wrong about the market or they don't want to lose money on the trade. Sometimes it is a combination of both. Regardless of which one it is, it causes traders to stay in positions that are going against them.

As traders are losing money, they figure that if they add to the losing position, they can bring the average cost of the position down. For example, let's say a trader wants to be short Crude Oil and he sells 1 contact of Crude Oil at $75.00. Crude is now trading at $80, and the trader is down $5 in crude ($5000). The trader then decides to sell short an additional 2nd crude oil contact at $80. The average short position is $77.50 (the average of $80 and $75).

The trader now only needs Crude Oil to go $2.50 in his favor to get to breakeven at $77.50, instead of $75.00. However, every tick Crude Oil goes against the trader past $80.00 a barrel is going to count twice a much, eating up available capital a double the rate. To make matters worse, markets that are trending in one direction, tend to continue to trend in that direction.

Why Traders Should Not Add To a Losing Position

When a trader is in a losing position, the market is telling him he is wrong. The market is the total sum of psychological, technical and fundamental knowledge. The market is the total sum of all investor knowledge and market opinions. It includes institutional money, sovereign wealth funds, hedge fund managers, trend following funds, commercial hedging interest, and every other participant, large and small.

If a trader continues to hold onto a losing position after the market says he is wrong, the trader is basically saying he is right, and the collective sum or the rest of the market is wrong. In other words, the global consensus is telling the trader the world is round while the trader insists the world is flat. This will almost always lead to larger losses. Bullish markets tend to trade higher, and bearish markets tend to trade lower. It takes something significantly fundamental or technical to occur in that market to change the trend.

Not only is the trader wrong shorting Crude at $75, he is twice as wrong shorting the market again at $80. The losses are now piling up exponentially if he continues to add on to a losing position. Plus, he has now doubled his leverage on a bad trade. Meanwhile, if the trader had just had a $1 or $2 stop on the crude oil position, he would have taken his loss and been done with the trade. He would have been able to admit he was wrong and move onto the next opportunity, instead of creating larger losses and letting other opportunities go by while he was in a losing trade.

Wait Just A Second, I Have "Averaged Down" and Made Money!

If you have averaged down losing positions before, chances are it may have worked in your favor. The problem is, the one time it does not work in your favor you will blow out your account. Every time you "average down" and succeed you are cheating trading death. It is almost like a game of Russian roulette. It only ends once, and when it does, it's over.

"Markets Can Remain Irrational Longer Than You Can Remain Solvent" - John Maynard Keynes

When it comes to leveraged trading, there have never been truer words said. Traders who want to hold onto losing positions "until they come back" to the price they entered may never see it happen. A trader who has a $10K acct short 1 crude at $75.00, only has $10 of room before the account is drawn down to zero. Most people think they will never let a position go against them that far, but it does happen, and there is no assurance that the market will come back to $75 before it gets to $85, causing the trader to liquidate the position for a very large loss.

THE SOLUTION

The simple solution is to never add to a losing position. However, as an experienced broker, analyst, trading newsletter publisher and individual trader, I know that is easier said then done. Here are a few rules to live by in order to help you stop adding to losing positions.

Place Stops Just Outside Normal Trading Ranges

When entering a position, traders need to give their positions enough room to work in their favor, but they also must have stops if the market moves decidedly against them. For a swing or position trader, this means having stops just outside the most recent trading ranges. It could be the previous day's low/high, the past week, or right outside the natural support and resistance lines for the markets. Traders need to define this risk parameter BEFORE they enter the trade. Traders need to know what the risk is and make sure they are comfortable with the risk if they are wrong about the direction of the market.

Mental Clarity Can Only Be Achieved After the Losing Position Is Exited

When a trader is in a losing position and the market keeps on going against them, it is very difficult to approach the situation with a level head and clear mind. The fear of losing money can be the greatest factor in the psychology of trading. It causes traders to see things irrationally, as they do everything possible not to take a loss. This leads to poor decision-making and bad judgment. This is why it is so important to define the stop loss parameters before you enter the market and stick with it.

Unfortunately, sometimes traders get into a trade without a stop or let the position run too far against them. If possible, try to imagine you are flat instead of in the position. Then ask yourself, if you were flat, would you get back into the position? If not, you need to get out, and get out fast. If the trader can't honestly say what he would do, or can't detach from the situation, the best thing to do is exit. Getting out of a loser relieves stress and allows the trader to approach things with a level head. Once the trader is out of the position, he can always get back in if he feels it is the right move. Some traders don't like this method because they don't want to spend the extra commission for getting out and getting back in. However, the clarity that is gained from exiting a losing position is invaluable compared to the extra transaction costs. Don't worry about a few dollars when thousands are at stake.

You Must Be Able to Admit When You Are Wrong and Take a Loss

Being able to admit you are wrong and take a loss is the first step in the journey of successful trading. No one is perfect in trading. Taking a small loss is a minor victory in trading. Being able to let winning trades run and exiting losers for a small loss is what it is all about. However, you can't get to the winners if you take large losses.

It is OK to be wrong. Actually, it is great to be wrong. Why? Because if you can't be wrong, you'll never be right about the markets. Trading is about taking risk and managing risk. The trader who can exit a position going against him early is giving himself the change to win big on the next opportunity.

The Best Traders Add to Winning Positions & Use Stops to Protect Profits

The most successful traders I've seen not only cut their losers quickly, but they let their winners run and add on as they go in their favor. They never average down losers, but they will certainly average up on winners. While some might not want to trade multiple lots, I think the concept is very important. When you have a winning position, the market is telling you that you are correct. The collective sum of all knowledge in the market place is in total agreement with you. This is the perfect time to add on another lot if you have the available capital without over-leveraging your account.

Some traders don't want to add on at higher prices because it adversely affects their dollar cost average. However, what traders need to realize is that markets trading higher tend to trend higher, and the opposite is true for bear markets. If you find yourself in a great winning trade, and you see no reason why it should stop, that is a great time to add on. When it comes to trading, you want to buy high and sell higher, or sell low and buy lower. We are not in the business of picking bottoms and tops. It is a one-way ticket to trading failure.

Successful traders also use stops. As the market moves in their favor, they move their stop up to where they feel is below a reasonable support level. They are comfortable with the losses or profits they will take if they get stopped out. They let the market tell them if they are right or wrong and they accept the market's decision!

Find a Broker Who Can Help You When You Need It Most

If you are having difficulty with adding to losing positions, you need to talk to your broker about it. Regardless if you are a self-directed online trader or broker-assisted, you need to have a talk with your broker. If you don't have access to a broker with your current trading arrangement, consider finding a firm that will allow you to access to one regardless of whether you are a self-directed online trader or broker-assisted trader.

As a Senior Broker at Daniels Trading, I can honestly tell you from first hand experience how important it is to be able to work through these situations with someone who has an interest in the success of your trading. Sometimes we are able to offer valuable advice about not adding to losing positions. Sometimes it just helps for the trader to talk about the trade the same way a person tells their psychologist their problems. In the end, it is the trader who works out what needs to be done just by communicating the situation aloud to another human being. Either way, having a trained professional in the weeds next to you during battle can make a huge difference in your most difficult trading periods, and help you make sure you never return to that place again.

#Article from FutureSource.com

CPO Commentary

News Bites

* Market Talk: Cargo surveyors ITS and SGS are scheduled to release their Malaysian palm oil export estimations for first 10 days of November today. Investors revised forecast for exports to 393,000 tons from 410,000 tons. ITS pegged the figure for November 1-10 period at 395,015 tons and SGS pegged the figures at 392,828 tons.

Outlook

* Fundamental: We expect CPO prices are likely to continue its upward momentum as fueled by other agricultural commodities. Watch forMPOB data due today.

* Technical: CPO futures broke out the observed high of 3348 yesterday, confirmed a continuation of the current daily Elliott primary impulse wave 3 which coincided with weekly cycle impulse wave 3 with an upside target of 3385 this week.

The RSI readings for hourly, daily and weekly timeframes are again overbought at their 80s. Any further upward momentum toward 3385-3400 vicinity will likely to trigger critical overbought condition for short-term timeframes and lead to a technical correction. Traders are advised to trade cautiously along the hourly uptrend channel of 3179 and 3382.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)

My Small Account... Not Big Account ya Fred.. heheh

* I post this for inspiration to all traders that follow my trades and also for others as motivation, this from my small account trades..

>> 1st May 2010 monthly statement after badly injured by the market..



>> 31st October 2010 monthly statement



>> As yesterday 8th November 2010..



* I can only say believe in your system...

CPO Commentary

News Bites

* Market Talk: Market expected palm oil inventories in October to reach a nine month high of 1.85 million to 1.9 million tons on higher output and weak exports. Meanwhile production was expected to have increased 8%-15% at 1.7 million – 1.8 million tons and imports from Indonesia might reach 100,000 tons.

Outlook

* Fundamental: We expect technical to take precedence today as market awaits the MPOB data scheduled to be released tomorrow.

* Technical: CPO futures again touched a new 28-month high of 3308 in tandem with bullish daily indicators and settled at 3273 yesterday. We however believe the price target for daily Elliott primary impulse wave 3 had accomplished, prices should penetrate lower for a start of primary corrective wave 4 in the near term. This is also mirror the daily minor corrective wave 4 with first downside target of 3137, then 2789, downside target for primary corrective wave 4.

The daily and weekly RSI readings are currently overbought at their 80s, indicating prices may anticipate a short-term correction in the near-term. We would suggest scale up selling with a stop loss at observed high of 3308. Note that, any breakout above 3308 will indicate a continuation of the daily primary and minor impulse wave 3 and prices may jump higher to test the next psychology resistant at 3400.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)

CPO Commentary

News Bites

* Market Talk: Renowned analyst Dorab Mistry said CPO futures may hit RM3300 in the next few weeks on weather concerns as back-to-back transition from El Nino to La Nina has caused severe imbalances and as weak dollar triggers funds pouring into commodities as inflation hedge. He expressed concerns that RM3300 a ton of palm may not be sufficient to ration demand as market may require higher prices in December and January to prepare for the tightness between February to May 2011. He added that world demand and supply is very tight even with current production estimates from Brazil and Argentina, thus any loss due to La Nina will make it tighter. He expected Argentine soyoil may rise as much as 10% to $1250 per ton.

Outlook

* Fundamental: We expect prices to move higher as fuelled by higher crude oil and soyoil prices.

* Technical: CPO futures broke out the hourly ascending triangle of 3106 and touched a new 28-month high of 3210 last Thursday. There are no major changes in the bullish daily indicators and prices continue to ride on the weekly Elliott impulse wave 3 with a target of 3241, Fibonacci ratio of 2.618 of wave 1, in the near term based on the Elliott wave principle.

The RSI readings for hourly, daily and weekly timeframes are currently overbought at 80, 76 and 78 respectively. Any further buying momentum toward 3241 will likely to trigger the extreme overbought RSI condition and lead to a technical correction, coincide with the start of weekly Elliott correction wave 4. Traders are advised to hold on their long position unless any signs of toppings. Note that, an extension wave 3 is always possible based on Elliott wave principle.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)

An Introduction To CANDLESTICKS, PART 3

PART 3

Supply and Demand

A stock's price will adjust to higher or lower prices based strictly on
supply and demand principles.
In Figure 7 is shown a diagram of a green candlestick.

The green color of the candlestick indicates that the closing price of the
stock at the end of the day is higher than the opening price at the
beginning of the day.

Figure 7

As you will see, the candlestick's color and size provide very important
clues regarding the TRADER'S SENTIMENT toward a given stock's
future price.

Notice that 'trader's sentiment' is the key phrase here. In short term
trading, it is critical for the trader to have a clear understanding of
what other traders are thinking. As you will see, the most direct way to
get that understanding is through proper interpretation of the
candlestick.

Let's look at an example. In Figure 8 is shown a candlestick of XYZ
Company, which opened at 25 and closed at 25 3/8.

Figure 8

The candlestick is green in color, which gives us a quick visual signal
that the stock price has rallied higher during this period.

How can we use this information to help us understand what other
traders are thinking? To answer this question, we will follow the
candlestick's changes step by step to understand the mechanism which
is driving the stock price to move higher.

In Figure 8, we see the stock opens at 25, and then quickly rallies to 25
1/8. The reason the price moves to 25 1/8 is because there is a high
demand to buy the stock at 25 1/8, and a short supply of sellers
offering stock at 25 1/8.

Once all of the stock available at 25 1/8 is snatched up, the next group
of sellers steps up to offer their stock at 25 1/4.
All of the 25 1/4 stock is quickly snatched up because there are still a
larger number of traders willing to buy at 25 1/4 than sellers willing to
sell stock at 25 1/4.

Once the 25 1/4 stock is gone, the next group of sellers steps up to
offer their stock at 25 3/8. The 25 3/8 stock is quickly snatched up
too.

This process will repeat itself until the buyers loose interest in buying
the stock resulting in a reduction of demand.

The result of combining these steps is a green candlestick with an
opening price of 25, rallying to a closing price of 25 3/8.

During the rally period; however, the astute candlestick reader will be
able to observe the long green color of the candlestick, and deduce that
buyer demand is high.

Now there is only one reason why traders would increase demand by
stepping up to buy the stock, and that is because they think that the
stock will go up in the
near future. So by observing the candlestick color and size, the astute
candlestick reader is able to deduce exactly what other traders are
thinking, and that is that they think the stock price will go higher in the
future.

In Figures 9 & 10 we show an example of how the same principle in
reverse applies to the analyses of a red candlestick.

Figure 9

The red color of the candlestick indicates that the closing price of the
stock at the end of the day is lower than the opening price at the
beginning of the day.

In Figure 10, we see the stock opens at 25 3/8, and then quickly drops
to 25 1/4.

Figure 10

The reason the price moves to 25 1/4 is because there are many sellers
looking to unload there stock at 25 1/4, and a low number of buyers
willing to buy at 25 1/4.

Once all of the buyers have bought the stock at 25 1/4, the next group
of buyers steps up to bid for stock at the lower price of 25 1/8.

The desperate sellers quickly sell all of the stock at 25 1/8, and then
the next set of buyers step up at the price of 25.

This process will repeat itself until all of the sellers have unloaded all of
the stock that they want to sell, resulting in a reduction of supply.

The result is a red candlestick with an opening price of 25 3/8, falling to
a closing price of 25. During the stock's price fall; however, the astute
candlestick reader will be able to observe the long red color of the
candlestick, and deduce that demand for the stock is low.

Now there is only one reason why traders would increase the supply of
stock to sell, and that is because they think that the stock will go down
in the near future.

So by observing the candlestick color and size, the astute candlestick
reader is able to deduce exactly what other traders are thinking, and
that is that they think the stock price will go lower in the future.

Weekly Update & Happy Deepavali

I wish my hindu friends and readers a very Happy Deepavali and may your wish come true :))

OK, now for my weekly update >>

*FKLI still holding LONG 1505 for November month.. (initial entry LONG 1308 on 30th June 2010 n still going strong roll roll roll..) with unrealised profit stands at 208 +/-

*CPO same case still holding January contract LONG 3052.. (initial entry LONG 2736 on 27th September 2010 n still rolling.. kkekekek) hit 3210 today n unrealised profit stands at 474 +/- almost 500 points winning... my aim cpo to hit 3750 +/-.. we wait and see yaa... dont follow me ya or i'll bring you all to HOLLAND!!

I FEEL GOOOOOOOOOOOOOOOOOOODDD .. heheh

Wise Words from Ed Seykota

If I am bullish, I neither buy on a reaction, nor wait for strength; I am already in. I turn bullish at the instant my buy stop is hit, and stay bullish until my sell stop is hit. Being bullish and not being long is illogical. ~ "Market Wizards, Interview with Top Traders - Jack D. Schwager"

*that what i can describe about the way I trade, almost almost similar with what Ed Seykota says.. cool :))

Will Gold Reach $5,000 Per Ounce?

Why The Founder Of The Second Largest Gold Mining Company In The World Says That Gold Will Reach $5,000 Per Ounce!
By Richard Rockwell

If the price of gold rising to $5,000 sounds far fetched to you, you may remember it probably sounded just as far fetched for gold to go over $1,000 per ounce back in 2001...



There are 5 fundamental reasons that gold will go that high...and possibly higher!

1) Inflation

If you weren't one of the lucky ones back in 2001 to get the message and see returns of 400% on gold, hang on because this next run could allow you to easily make up for that missed opportunity MANY times over. With the worldwide Central Banks have rolled out an unheard of $12 Trillion Dollars in Stimulus programs and more than DOUBLED the US money supply! Never before in US history has there been such a massive paper print that could put the final nails in the US dollar's coffin. Remember the relationship with the Dollar vs. Gold? When the dollar is weakened what happens to gold? It goes UP, UP, UP!

2) Demand

You aren't the only one receiving this knowledge; the writing is on the wall. Investors and hedge funds alike are gobbling up more gold in more huge quantities than ever before. For those in the US that are still asleep at the switch, watch out investors in India will buy whatever you don't want. Let's not forget China, who is not shy about telling it's citizens to invest in all of the gold and silver they can afford. Can you say a BILLION people? So here's the lesson from Economics 101. When Demand increases and SUPPLY DECREASES, what happens to the PRICE? Elementary my dear Watson!

) Follow The "Smart Money"

Have you heard the phrase "If you want to be rich, copy what the rich invest in" So what are the richest people in the world investing in? Drum roll please...You got it, GOLD! Black Rock Inc. one of the largest investment mangers said that 2009 was the turning point...For the first time in over 20 YEARS the Central Banks have become Net BUYERS as opposed to Net Sellers of Gold.

4) Currency Crisis Coming

History (Fill in the blank)_______ itself. We have already seen what has happened to Portugal, Spain, Italy, Ireland, Iceland, and Greece. We have also seen the UK and countless other economies struggling. This is ALWAYS what happens with a currency that is only backed by the FAITH of the issuer. There has NEVER in the history of the world been a fiat (man made) currency that has survived...NEVER! If you're still out there thinking that the US Dollar can make a "comeback" with all that has happened, then you will be like the farmer that won't go into the root cellar thinking that the tornado heading for his house will certainly go around him! Again let me say NEVER in history has ANY fiat currency survived, and the US dollar will be no exception. If you do not have gold, what you will have will be plain and simple...paper and ink.

5) As Easy As 1,2,3

The move to $5,000 or more per ounce is sure to happen in 3 distinct phases, with each stage rapidly accelerating the previous one. Phase 1 Currency will continue to devaluate to almost nothing. HINT -- The US dollar has already lost 97% of its purchasing power since its inception! Phase 2 will be the strongest levels of investment demand the world has ever seen. By Phase 3, the price of gold will not move gradually, but rather TAKE OFF like each bar of bullion is strapped to a rocket! The price of gold today will seem like chump change in comparison!

CPO Commentary

News Bites

* Market Talk: CPO prices are likely to take a breather as weak export data points to higher stockpile level in October. Market expects palm oil inventory level to reach 1.85 million tons in October. However, concerns on annual monsoon which starts in November which might likely disrupt harvesting and lower palm output may limit the downside of prices.

Outlook

* Fundamental: We expect higher opening on overnight gains in crude oil and soyoil prices. Watch out technical for trade today.

* Technical: CPO futures broke out the hourly ascending triangle of 3086 and closed at 3092 yesterday, confirmed the short-term chart pattern with an upside target of 111 points at 3195 in the near term. Conversely, a daily spinning top candle formed yesterday, signifying prices are losing momentum and the bull may be in trouble particular when prices near its new high or during a rally. We however believe a confirmation candle to close below 3061, low of current spinning top candle, is required to confirm the reversal chart pattern.

We would advice on buying accumulation on technical correction with a stop loss at 3000, daily Parabolic SAR, and for those shorter term traders may put their stop level at 3061 as any convincing breakdown below the above said support may mean a pause to the current medium-term uptrend. Immediate resistant should refer to 3100 psychology level, then 3195, short-term target of hourly ascending triangle breakout on Nov 1.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)

An Introduction To CANDLESTICKS, PART 2

PART 2

One of the main differences between the Western Line and the
Japanese Candlestick line is the relationship between open and closing
prices. The Westerner places the greatest importance on the closing
price of a stock in relation to the prior periods close. The Japanese
place the highest importance on the close as it relates to the open of
the same day. You can see why the Candlestick Line and its highly
graphical representation of the open to close relationship is such an
indispensable tool for the Japanese trader. To illustrate the
difference, compare the daily chart plotted with Western Lines (Figure
3) with the exact same chart plotted with Japanese Candlestick lines
(Figure 4). In the Western bar chart as with the Japanese Candlestick
chart, it is easy to interpret the overall trend of the stock, but note
how much easier it is to interpret change in sentiment on a day to day
basis by viewing the change in real body color in the Japanese
Candlestick chart.

Figure 3

Figure 4

Trader's sentiment

One of the greatest values of the candlestick chart is the ability to read
market sentiment regarding a stock. To illustrate consider the
following example of a stock traded from the eyes of a Western chart
trader and then from the eyes of a candlestick chart trader.

Western Chart Trader

At the close of the day's session you observe that the stock closed well above your entry price (2), which
leaves you very content with your trade.

After the close of day 2, you open the financial section of the paper and check the closing price of the
stock and observe that not only is your stock well above your entry price, but also has gained slightly (it is
worth mentioning
that most western papers only publish closing prices while Japanese papers publish both opening and
closing prices).

On day 3 you open and the newspaper to check the close and notice a slight dip in your stocks price but
you do not panic, because you are still well in the money.

You convince yourself that the stock has only dipped slightly relative to the entry day close (day 1), and
should resume its up trend on the next day.

On day 4, you check the close and notice that the stock has fallen significantly relative to the prior days
close.

You are now concerned about protecting the profits that you had previously bragged about just days
before.

On the beginning of day 6, you call your broker (or logon to your online trading account) and place a
market order to sell at the first opportunity.

At the day 5 markets open, the stock opens sharply lower and continues to fall.

Your order is executed at a price several points below where you entered.

You then shrug off the trade as an unpredictable misfortune, and move on to the next trade.

Figure 5

Candlestick Chart Trader

Now suppose you are a candlestick chart trader trading the same stock
using a candlestick chart (Figure 6).

At the beginning of Day 1 you enter the stock based on a candlestick
pattern entry signal (we will discuss proper entries in detail latter in
this unit).

At the close of the day's session you observe that the stock closed well
above your entry price (2) which leaves you very content with your
trade, but also moves you into a state of caution for signs of a change
in trend or reversal.

After the close of day 2, you observe the candlestick formed for the
day and notice that the real body is small indicating that there was a
tug of war between the bears and the bulls.

You also observe that the real body is read in color indicating that the
stock closed lower than the open indicating that the bulls actually lost
the tug of war to the bears.

Based on these observations you conclude that the bullish rally in the
stock has ceased, and the bullish sentiment of the market regarding
the stock is changing.

You decided to sell your position at the days close, or at the market
open on the next day to lock in your profit.

If this were a stock in the midst of an overall downtrend, you may
decide to short the stock under the low of the day 2 bearish
candlestick.

As you can see the candlestick chart trader has the advantage over
the western chart trader in that he can use the signals generated in
each candlestick to help foretell the changing sentiments of the market
regarding a stock.

The open to close relationship revealed in the candlestick is more
effective than the close-to-close relationship commonly used by
western traders.


Figure 6

CPO Commentary

News Bites-

* Market Talk: Continues talk has that October exports are likely to be steady, however exports in November should be higher due to the export levy set by Indonesia would made Malaysia palm oil the cheaper option to purchase. Moreover, China is likely to step up purchases for the Lunar New Year in February.

Outlook:

* Fundamental: CPO futures are likely to be supportive on bullish forecast and talk on higher export in November. Watch out export estimation due today.

* Technical: CPO futures corrected 24 points after an aggressive buying on Oct 28 and settled at 3068 last Friday. Note that, there is a formation of hourly ascending triangle in tandem with bullish daily indicators. Any breakout above 3086 will confirm the hourly ascending triangle breakout with 111 points price target at 3197 in the near term. With intradays’ RSI back to neutral ground, we would suggest on buying on technical correction with a tight stop loss at 3035, low of hourly ascending triangle, and for those shorter term traders to buy upon technical breakout above 3086. Should prices successfully cling on to 3086 level on closing basis today, prices may test 3100 psychology level. But should prices close below 3086, prices might likely continue consolidating within the range of hourly ascending triangle around 3035 and 3086 in the near term.

#Courtesy Inter-Pacific Securities Sdn Bhd, for enquiries please contact 03-21427586 or email :- tanks@interpac.com.my (please mention my site http://www.fkli.co.cc/ when enquiring)