Rainer's Investment Insights

In May 2009, the following made NEWS (BBC, UK): "Ten of America's largest 19 banks need a combined $74.6bn (£50bn) of extra funds to boost their cash reserves. That is the main finding of the so-called "stress tests" to see if the banks have sufficient capital to cope should the recession worsen. Bank of America is the most at risk, needing an additional $33.9bn." So, one in two of the largest US banks suffered extreme stress then. That's something, - but US stock markets continued their upward trend regardless, till January 2010. Here we are 15 months later : Today's news, Saturday, July 24th 2010, is about stress tests having been performed on 91 European banks. The result: 7 of them appear to fail the test, less than 8% of all tested banks, needing a bailout sum of US$ 4,5 billion (around 6% of what was needed in the US). . In the US the year before, every other bank failed the test, and stock markets showed little regard to their plight!...

The WOW-factor to be had from combining technical analysis of the financial markets and the time cycles once again managed to make my hair stand on ends! Last night's losses in the US stock markets came when Mr Average least expected it, - and the size of the step down mirrors the step up on July 7 th . It also means that the pull back is a very short term affair, as the one day move has retraced almost 50% of the advance in the DJIA . What becomes clear from the chart that the most recent advance, commencing July 5th, was doomed to fail as soon as it would enter the Ichimoku Cloud (blue shaded cloud form) at a point, where the formation was very dense. It is exactly the reason, why I recommended to remain on the sidelines during this hapless endeavour. Now that we are out of the cloud, the immediate downward pressure will ease. How much more downside is left? Where are the potential support levels? The 50% retracement for the short term move in July would be 10,040 1...

The last few years have wrought havoc with many investor portfolios, while undermining their long held belief of "good fortune for all and sundry" when investing in financial markets. Professional and amateur investor alike are calling into question the age-old, empirically supported theory that tells of " forever rising markets in the long term ". May be it should read, "if we can wait long enough"? By the same token, investment advisors are faced with difficult choices: they could Acknowledge that hitherto popular, well respected and frequently applied investment principles failed to serve investors as well as anticipated, Learn quickly what changes are necessary to make money in the markets of today - and live to serve another day Or - GET OUT OF BUSINESS WE USED THE OPPORTUNITY TO DEVELOP OUR LONG HELD INVESTMENT PRINCIPLES TO THE NEXT LEVEL. For over a year now, we, at SingCapital Pte. Ltd., have been working on a simple enough, yet effective guid...