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William Au's Investment World
Being a Technical Analysis Specialist and Development Banking Specialist, I'm here to share my views in the financial markets and investment world.
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Wednesday, February 22, 2012
Thursday, January 12, 2012
Precious Metal Outlook 2012
Catch ME live on the 18th January Speaking on the " Precious Metals Outlook 2012" with other speakers! I'll be sharing with you what are my Technical Outlook on these precious metals!
REGISTER FAST AS SEATS ARE LIMITED!!!!
Kindly Reserve Your Seats At ( http://www.facebook.com/events/250676161670759/ )
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Contact: 012-315 2075
Sunday, December 25, 2011
Gold Bubble is now Bubble Trouble!
Saturday, November 5, 2011
Technical analysis pre-empts fundamental data
Fundamentalists believe there is a cause and effect between fundamental factors and price changes.This means, if the fundamental news is positive the price should rise, and if the news is negative the price should fall. However, long-term analyses of price changes in financial markets around the world show that such a correlation is present only in the short-term horizon and only to a limited extent. It is non-existent on a medium- and long-term basis.
In fact, the contrary is true. The stock market itself is the best predictor of the future fundamental trend. Most often, prices start rising in a new bull trend while the economy is still in recession (position B on chart shown above), i.e. while there is no cause for such an uptrend. Vice versa, prices start falling in a new bear trend while the economy is still growing (position A), and not providing fundamental reasons to sell. There is a time-lag of several months by which the fundamental trend follows the stock market trend. Moreover, this is not only true for the stock market and the economy, but also for the price trends of individual equities and company earnings. Stock prices peak ahead of peak earnings while bottoming ahead of peak losses. The purpose of technical analysis is to identify trend changes that precede the fundamental trend and do not (yet) make sense if compared to the concurrent fundamental trend. (Source: Global Technical Research)
MORE TO COME.......
Wednesday, October 26, 2011
Dow Jones Industrial Market Outlook for the month of November
Dow Jones Industrial forming a bullish trend formation using the EMA10,20,50 days trend lines analysis.
Observing the 2010 September bullish trend formation, the DJIA rallied for at least 6 months before it peaked and formed a Deathly Cross (trend reversal) which lead to market crash during the mid of 2011.
Once again the DJIA formed another Bullish trend formation with a Golden Cross this week. Let's observe how the market will perform and possibly reach the peak of 12,700 points (previous high).
Back in 2010 September, DJIA Weekly Chart formed a weekly Golden Cross using the EMA7,21 weeks + weekly MACD Golden Cross. This bullish trend lasted for nearly 10 months before a trend reversal sign was formed.
In 2011 October, the DJIA is forming another Weekly Golden Cross using the EMA7,21 weeks + with a Weekly MACD Golden Cross. A year end Bull Rally for the DJIA??
Technical Analysis Explained
Technical analysis is the study of financial market action. The technician looks at price changes that
occur on a day-to-day or week-to-week basis or over any other constant time period displayed in
graphic form, called charts. Hence the name chart analysis.
A chartist analyzes price charts only, while the technical analyst studies technical indicators derived
from price changes in addition to the price charts.
Technical analysts examine the price action of the financial markets instead of the fundamental factors
that (seem to) effect market prices. Technicians believe that even if all relevant information of a
particular market or stock was available, you still could not predict a precise market "response" to that information. There are so many factors interacting at any one time that it is easy for important ones to be ignored in favor of those that are considered as the "flavor of the day."
The technical analyst believes that all the relevant market information is reflected (or discounted) in the price with the exception of shocking news such as natural distasters or acts of God. These factors, however, are discounted very quickly.
Watching financial markets, it becomes obvious that there are trends, momentum and patterns that repeat over time, not exactly the same way but similar. Charts are self-similar as they show the same fractal structure (a fractal is a tiny pattern; self-similar means the overall pattern is made up of smaller versions of the same pattern) whether in stocks, commodities, currencies, bonds. A chart is a mirror of the mood of the crowd and not of the fundamental factors. Thus, technical analysis is the analysis of human mass psychology. Therefore, it is also called behavioral finance. (Source: Global Technical Research)
To be continued...
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