The Asian markets bleed once again today! I shorted twice on Taiwan and made US$330 per contract. Some of my fellow trader friends followed my lead and made some money too, isn't that nice? I thank them again for believing in and trusting me :)
Once again, the typical headlines that follows this kinda sell-off are "Share prices tumbled across board ... nervous trade ... with investors fearing further US interest rate hikes would fuel inflation and stunt economic growth".
In my opinion, news/headlines are always late and thus I cannot rely on them to help me fatten my trading account. The news are probably good for a hindsight coffee talk after the money is made :)
Tell you a secret - I based 30% of my trading decision on this interesting phenomenon called SEASONALITY and it does help to bring in the buck IF AND ONLY IF YOU BELIEVE IT !!!
The formal definition of seasonality is "A characteristic of a time series in which the data experiences regular and predictable changes which recur every calendar year". For example, as mentioned in Investopedia, there's a January effect where "at the beginning of January, investors return to equity markets with a vengeance, pushing up prices of mostly small cap and value stocks".
Talking about seasonality as the World Cup nears, can't help but to share with you my version of "World Cup Effect". As I compare the charts of the Dow Jones Industrial Average (DJIA) this year and that of the previous World Cup (2002), there's an uncanny similarity. Both charts registered a sell-off in the market which started on mid May (20th May for 2002 and 11th May f0r 2006) with similar selling momentum. Based on chart patterns in June - July 2002, the current sell-off could continue gradually till mid July, with DJIA possibly reaching 9,000 points.
DJIA going back to 9,000 ??? I bet most of you think I am crazy ... Whether it comes true or not, I am not really interested. Even if I am RIGHT but I didn't trade on this move and make $$$, what's the point right?
As you are thinking right now, you begin to make sense of why 70% of my initiated positions since May were on the short side. Cool, ya ?
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