Your bonus today (since it is Friday) is the story below:
The markets recovered quite well. Professional traders call this “Pump and Dump”.
The way Pump and Dump works is that the markets fall hard and then we see a bounce and suckers jump in only to be killed later.
For example if you own 1 million shares of Research in Motion (formerly RIMM) and now trading as BBRY, you can dump 100,000 of it onto the markets. The people who watch the stock see a ticker with 100,000 being bought by someone because a brainiac just dumped the 100,000. They run in and buy thinking omg, something is gonna happen. So the price goes up a bit because “one can never estimate the madness of crowds”, the guy who caused the panic dumps more shares at the higher price. Makes his money and goes for lunch. Watch out for strong falls and then bounces. Better to stay on the sidelines.
One time I told my 9yr old to sell my 300 shares of RIMM (BBRY) one hour after the markets opened and she had to wait for an hour. Kid bought 300 shares at $125. Realised that she had done the opposite of what I had told her. She quickly sold the 600 shares at $145 (that stock would fly so much you would get dizzy).
The kid later came to Saint John with her little sister and dad to visit me as I was stuck in Saint John for some weeks. She says “I just bought the entire set of Harry Porter books”. Wait, that was like $475 for the entire set and she told me she had used my bank card. This is where parenting comes in handy and I knew she had an explanation. Her explanation was “I watched it flying up after I bought it and then watched it fall so I made you money so I used 75% of the profit.
Phew, that stock is now trading at $6.68 a share. Reading charts is crucial. If I can teach my kids to do it, you grown ups need to know the implications of chart reading and analysing them for how the stock or market will react.
By the way that kid is now 18yrs old and in University for Pre-Med then Med-school. Absolutely no interest in the markets at all.
The Uganda shilling closed at 3408 on the US dollar, 4943 on the British pound, 3836 on the Euro, 33.48 on the Kenyan shilling and 2461 on the Canadian dollar.
The shilling is appreciating mostly against the US dollar. It is moving up slightly on the other currencies except for Canada it seems to be kind of stuck. Might be because I live in Canada. Dunno:).
Coffee Arabica closed at $2.96 a kilo.
Coffee Robusta closed at $1.62 a kilo.
This is not a catastrophic pull back in coffee prices. It is just some people maybe needed the small profits they had made. You can review my currency and global market report from yesterday where I explain the profits on coffee. http://www.theinsider.ug/thur-feb-11-2016-currency-and-global-markets-report/
Gold fell by $6.71 per ounce closing at $1238 per ounce. On this fall, remember that Gold had risen quite fast in the last 3 months and the markets were turbulent so people had packed their money in safety. There is profit taking and then there is also the human greed where people saw Oil rising today and may have pulled some of their money out of gold to go into the other market investment vehicles.
Brent Oil rose 4.95% ($1.54) closing at $32.66 a barrel. Yes, the recent fall had been contained within the last 3 white candles (three white soldiers). Today’s rise was contained in a big red candle which means this rise might need some rocket fuel or else the fall will resume. Besides this, we are still way under the 50 day moving average (blue line on the chart). If you also look on the chart to the bottom, you will notice a negative curvature. We will resume the fall.
Shanghai set the momentum since it opens before Europe and North America. When I woke up, the finance news were all over the big bounce starting in Asia. Kale, till Europe opens and then North America joins in. Shanghai in the end fell 0.63% (18 points). The only good thing about this is the $SSEC is building onto its determination to go up so the chart looks like it is going up.
Hong Kong – is this not something? No change today. Given how little Shanghai moved, it is no surprise that Hong Kong held tight to the opening level and closed at the opening level.
Tokyo – oh Mama Fina, come over here! You need to answer this one. This has got to be the chart of the day. These sushi eaters are not making sense. They ran up the market last week and then crashed their exchange this week. The Nikkei fell 4.84% (761 points) erasing any gains they made last week when they were faking out the market. I kid you not, $NIKK crashed through any support of any kind and this could spell trouble for the other indices.
Frankfurt did a small bounce rising 2.45% (215 points). The chart looks like it is done with the falling and will be moving up. If Shanghai holds up I think the $DAX will go up. We will just ignore the Nikkei.
Paris rose by 2.52% (98 points). Only thing is the rise was within the body of the previous red candle so Je ne parle pas le francais. Cela pourait etre un petit peut dangereux.
London rose 3.08% (171 points). The white candle today closed above the bad big red candle of yesterday so London is curving upwards. Not so fast though as there are some bad red candles from this week that will act as resistance against the $FTSE’s rise.
Toronto rose 2.43% (294 points). The chart for the $TSX is a bit interesting. It signaled this week that it was on the way down and now it signals that it is going to cut that fall quickly and rise up. Beware. I would not get into it. This is a classic profit taking or Pump and Dump or the Short Squeeze or a combination in addition to the Margin Calls.
Dow Jones Industrial Average rose 2% (314 points). The closing candle was a nice white one. The $INDU has been falling but remaining within the hammer it formed some time ago and this means that the support level will hold.
Standard and Poor rose 1.95% (38 points). The chart pattern on the $SPX says the markets will go up. After all when the S&P talks, we jump.
NASDAQ rose 1.66% (71 points). It is a sad story to write home about though. This is the 5th day the $COMPQ closes below its last support (a hammer). I suppose if we cannot make money from the other markets, we will cut back on our tech gadgets.
IN THE NEWS:
Kiggundu has banned mobile phones at the polling stations. http://www.theinsider.ug/kiggundu-has-banned-use-of-mobile-phones-at-polling-stations/
Uhuru is cutting down cabinet expenditure. http://www.theinsider.ug/uhuru-takes-stern-measures-to-cut-state-spending/
The Trump says he will sue Cruz for not being a natural born citizen of USA. Remember that he did this with Obama too. http://www.cnn.com/2016/02/12/politics/donald-trump-ted-cruz-dishonest/
Air pollution kills 5.5 million yearly. http://www.ctvnews.ca/sci-tech/air-pollution-kills-5-5-million-globally-each-year-new-research-shows-1.2775912
Saudi Arabia says No Assad in the future of Syria. Well, really? Let us see you take on Russia then. http://ca.reuters.com/article/topNews/idCAKCN0VL2K4
Martha Leah Nangalama
I contribute to the Business, Opinion and World News on The Insider.