Contra and Trading Curb

Wanted to post this a month back so here it is, when another birdy brokerage introduced curb (immediate delivery) for innopac, i feel it is time. There are many things against retail traders. Personally i feel that contra should be removed all stocks should be made on immediate delivery or collateralize trading account so to prevent wankers like UOBKH and OSPL from enforcing trading curb as and when they like. Firstly, it might be their own prop traders doing the handy work, if prop dun churn, they are as good as the guy staring at the clouds in the park. If contra still exist, they can enforce it anytime and do not need to justify and anytime they feel it is a "risk" to their birdy firm, they just curb. So who suffer? everybody but those in the know moments before the enforcement by the respective house. Also, contra is only avialable in Singapore and Malaysia where you can buy with nothing down. If market does not have players, might as well we go library and read books and hypothesis on how the effective market works vs. being in it. Market is abt supply and demand. So a curb is an artificial element to a liquid system. The issue is also SGX, who does not query such curb as the houses are members so, their interest ahead of market participants. if a curb were to come in, there must be proper justification and notification to all parties and if the curb were to be enforced, it must be all houses with the blessing of SGX (indirectly condemning the STOCK to its death and question the relevance of it being listed) The notion of curb means that the stock it no worth the value it given by the market. Seriously, who are the brokerage to determine that? They are a factor to the market, if they cannot swallow the risk, close shop and go open a mini-mart. Brokerage obviously know how much exposure they have at that moment to a particular security. Once the aggregation by various prop, remiser, dealer, xyz personnel and customers exceed a certain level of the total issue, they get panicky and so call convey a meeting of the elders in the village center to determine of the security should be curb, at that moment, those ppl with vested interest will info their cronies and they in turn will just unload, so the idea or discussion or a curb will per-determine the death of a security not after the fact. Lets not forget that someone will always know ahead of the event and unload or go short. Like they say, “water will find its level” so, let Mr Market decide not brokerage.

Oceanus

The More You Know, The Less You Know

I will officially tone down my bearish view on the market unless there are more negative news to justify the view.

Everyday, it seems the more I learn, the less I know about the market. It is pointed out to me that the US yield curve is normal or positive. From this knowledge, it is better to hold a less bearish view.

If there is change in the yield curve from normal to flat, that might raise a few flags.

The market reacted negatively to today's CPI numbers would likely mean that the Fed would reconsider its aggressive rate cut position and take a more hawkish inflationary watch MODE.

AIG's CDS

CDS iceberg is tipping out of the water, weather it hits like sub-prime, it will unreveal soon.

Today it is just AIG unable to value its CDS, AIG's stock dropped 10%. Will we see more? I think so.

As of this post, Dow is trading at 12132 (-50 pts), off it low.

STI Monthly

The STI is up 200% since the start of 2003. Today, we are correcting and it is down 73% from its recent highs. Most ppl think this is a correction but technically speaking, when an index is down 20% from its highs, it is the beginning of a bear market. I thing 73% speaks volume.

Seldom are we able to pick the bottom or sell the top, I hope we can see a bottom soon. For the moment i see the bottom around 2200 to 2600 for the STI.

STI Charts

Cannot pass the dotted downtrend line. I think STI may close at 2888 today. Looks like the rut on Wall Street is not over yet.

Bulls and Bears

I think people expect the market to drop like a hot brick and hit the bottom. If the charts are telling a story, it looks like a painful and slow death.

Unless STI break the 3150 to 3200 range, i dun think there is any story. There are firm bulls and bears in the market, so at least this market is sane.

I think the maximum activity will be down not up.