In a chilling article posted on 9 January 2016, local finance blogger, Dave, predicted in his website Smart Passive Cash Flow that STI will plunge to 1800 points in early 2016. As of now, STI is at the 2600 level, so to reach 1800 within a couple of months would constitute a huge correction in the local stock market. To back up his claim, Dave highlighted that he had accurately predicted the August plunge last year in his 22 June blog article. Catch him in action at here.
Dave was able to spot the market trends because the big boys, the so called whales, had taken positions which was spotted by Dave. Most investors, including local finance bloggers, tend to underestimate the power of the whales. What they don’t realize that it is very easy for the big boys to influence the market. Take the STI for example. It consists of only 30 stocks and all the big boys need to do is to focus their short selling attacks on these few stocks to bring down the STI. They don’t have to short all the other counters to bring down the Singapore stock market. But if this occurred, then make sure you don’t stand in the way of the whales because you will not be able to defeat the big boys.
To be an all round investor, one needs to be well versed in not just fundamental analysis but also technical analysis. In addition, it is important to have different strategies on hand to deal with changing market forces. Far too many investors just buy and hold without knowing what is exactly going on in the market. What Dave brings to the table is a whole new level of experience which you can never learn from the books nor attending seminars. From his membership website, See How I Trade, he is sharing with his members on his spotting of big boys’ movements. Investors keen to understand how derivatives work can sign up as member.
I believe that short selling plays an important role in the stock market ecosystem because obviously the stock market cannot keep rising over the time. There must be corrections to ensure that the shares are trading at their true values. Over the past few years, many of the local penny stocks without any fundamentals were actually trading at bloated levels, thus I could not help but feel that the market is overdue for a major correction. With big boys taking huge short positions, the market is poised for a big plunge. So unless there is a compelling reason, I am not going to take the risk and buy any stocks now in case of catching a falling knife. My recent purchase of K1 Ventures was an exception because of its investment track record.
It is, however, possible to make money during market corrections. Instead of buying stocks considered to be trading at bargain level, investors can choose to short sell to exploit the volatility in the market. Just think about it, if you buy the stocks considered to be cheap during market crisis, you never know how long the stock will rise back to its glory days. Even though you may have strong holding power, the opportunity loss of doing so may not be worth it. Furthermore, you never know whether you have caught a falling knife. As the saying goes, good things don’t come cheap and cheap things don’t come good. Different market conditions require you to adopt different tactics in order to make money.
But you need to learn the ropes before attempting to do short selling. Otherwise you would end up losing monies. To this end, SG Wealth Builder is pleased to join force with Dave. Watch the guru and learn from him on how to trade. This blogger has a passion in trading and like me, understood the importance of respecting the big boys’ movement. Some features of his membership website:
1)My Daily Potential Trades
2)My Daily Trend Analysis
3)My Spotting of Big Boy’s Movement – Unique and Powerful!!
4)My Weekly Trend Analysis
5)My Weekly Dow Component Analysis
6)My Recent Trade Summary
7)Strategies to use in different situations
8)Entries, Stop Loss and Targets
9)Exclusive Articles of unique movements
10)Wealth eBooks specially written for VIP Traders
The unique portion of his site is that he combines Technical Analysis (on charts) and the movement of the Big Boys (as seen in the derivatives market) to form powerful trades. I was inspired by Dave and realize the importance of learning and earning. So I encourage readers to subscribe to his membership site as VIP Trader. Remember to quote the discount code: “sgwealthbuilder” to enjoy discounted subscription of USD49 per month.
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