TAIEX Outlook - Week of May 23rd

Not to say I'm good at this stuff or whatever (because I'm not), but it just shows that "fundamentals" and "news" does not really matter when trading stocks. I simply look at a chart, see support and resistance levels, trend lines, volume, and Fibonacci numbers.

What did I say back on the May 9th update when the TAIEX was hanging right at the 200DMA @ 7600 and change?

From here, I'm looking for some consolidation (sideways movement) before a lower high before moving lower once again. Again, looking at the Shanghai Composite Index, as long as it continues to slide, so goes the the TAIEX and likely the U.S. markets.

Well what do you know, it was as if the markets were listening to me. While I wasn't completely spot-on (the day after I posted that, the TAIEX dropped below the 200DMA before assuming the sideways consolidation). What did proceed after that was the lower high as well as the moving lower once again. Here's a snapshot of the market of where it stands now:



As you can see, the lower high was made at 7782.32, followed by lower lows. So that's that. Did I know about any earnings that may have "caused" Taiwanese stocks to go down or other "news" that experts claim have caused the markets to go lower? Not in the slightest.

So where to now? As I've mentioned before, I look at the Shanghai Composite Index for indications of where the TAIEX may be headed.



Looking at the $SSEC that has already begun a bounce off the lows, it would make sense that the TAIEX follow similarly. Targets for a bounce are a 50% retracement from recent highs to lows at around 7400, which also coincides with a gap fill. Above that, the 200DMA could be within reach at the 7600 price level.

Keep in mind that all markets have been under heavy selling pressure over the last month, and that it pays to be cautious being long. I firmly believe we will still see lower prices across world markets later this year. As a result, I am cautiously long SPY calls as of this moment and looking for an exit around SPX 1106-1117.

Snapshot of Taiwan News

Have been a bit busier than usual lately (odd since I'm unemployed), but anyways, I digress. Feel like I need to update with some quickies on what's going on in Taiwan. Although, I feel like not much of anything is going on as everyone is pretty much waiting upon actual ECFA news or the year-end municipalities elections.

News stories:

• Continued support from U.S. congressman for F-16 sales to Taiwan. Making it even more urgent, the F-16 C/D line that are being requested by Taiwan is set to be phased out of production sometime in the next two years.
  
• ECFA potentially affecting trade outside of the Taiwan Strait? Business opportunities between Taiwan and Argentina think this might be so. But of course, this is all just conjectures.
  
• Lin Yu-Chun (小胖) is signed by Sony Music. Look for his first album to drop in July. I'm pretty sure my dad will be ordering that CD...
• Foxconn of Taiwan is again tied into rumors of who/what/where/when/why the next Apple iPhone will be released.

Editorials:

• A senior research fellow at the Taiwan Brain Trust in Taipei has a hard-hitting piece on Ma Ying-jeou and his first 2 years as president. Wonder why Ma never talks about his famous 6-3-3 promise anymore?
  
• Excellent points brought up in this Taipei Times piece on why a peace accord between China and Taiwan is irrelevant. Basically he points out correctly that Taiwan does not equal the KMT/Republic of China. Any peace accord that may or may not happen should be negotiated between the CCP and the KMT, who happen to be residing on Taiwan.

As always, check out the Taiwan blog roll on the right side of the page; lots of great bloggers and a plethora of Taiwanese stuff!

TAIEX Outlook - Week of May 9th

My previous post indicated my belief that the TAIEX would soon be under more selling pressure. Why? The potential setup was the double top forming, as well as the Shanghai Index leading the way down. Furthermore, the past week or so has started to see some distribution in the U.S. markets. The result is a swift move back to the 200DMA for the TAIEX:



From here, I'm looking for some consolidation (sideways movement) before a lower high before moving lower once again. Again, looking at the Shanghai Composite Index, as long as it continues to slide, so goes the the TAIEX and likely the U.S. markets.

For the 6th of May, the U.S. markets got shaken up quite a bit, with the DJIA down over 1000 points at one point today. It was definitely one crazy market, and one that I even got burned in. If you need anymore reason to not be invested in the markets, today is the prime example. Whether you believe it was actually a trader error (which I don't really believe) or not, the fact is that there is no one really trading this market anymore. It's all machines and "high-frequency trading" that is going on. How can your money be safely invested in the markets when the potential for a 1000 point drop in less than 5 minutes can occur?

Anyways, here's a live clip of the crash occuring on CNBC, followed by this funny video of a guy going crazy during the crash (live as well):

Formosa Betrayed Ending in Seattle; Shows in Taiwan in August

Got a press release from the Formosa Betrayed Facebook group a few days ago. Great news for those in Taiwan, it's headed your way in early August! They are also planning a DVD release for this summer (sort of odd that they might release a DVD before showing in Taiwan, but in the end I doubt it will impact the numbers in Taiwan that much).

Here's an excerpt from the Facebook "press release," on the Taiwan release:

TAIWAN DISTRIBUTION FOR FORMOSA BETRAYED

Formosa Films and Screen Media Ventures are proud to announce an agreement with IPA Asia Pacific and Sky Digi Entertainment Co for theatrical distribution of Formosa Betrayed in TAIWAN!!!! Since before the film was completed, thousands of fans have been wondering when the film will be released in Taiwan. Now, we are excited to announce that the film is scheduled to be in Taiwanese theaters beginning the weekend of August 6, 2010.

Actor/writer/producer Will Tiao, director Adam Kane, and several of the actors from the film have been invited to promote the film in Taiwan prior to its release. Please find attached the official press release in Mandarin Chinese and English that has been released to media outlets in Taiwan, the United States, and worldwide. Any press inquiries regarding the Taiwan release of Formosa Betrayed should be directed in the United States to Michael Dwyer at Screen Media Ventures at (212) 308-1790 begin_of_the_skype_highlighting (212) 308-1790 end_of_the_skype_highlighting and in Taiwan to Tiffany Wang at Sky Digi Entertainment at 886-2-2231-1010.

Here's the rest of the press release, including information on how you can request to see Formosa Betrayed at a theater near you (if your city wasn't on the original release schedule).

Also, this is the last week for Formosa Betrayed in Seattle (showing only at the AMC Loews Uptown 3).

For those who have or have not seen it and would like a preview (minor spoilers, but not really) on what I thought of it, here's my review of Formosa Betrayed.

Amanpour Questions President Ma on CNN

Interesting interview on CNN, with world famous CNN reporter Christine Amanpour interviewing Ma on a variety of current issues in and around Taiwan.

Here's a link to the video and article.

Just a few points....

Amanpour starts out asking Ma about his stance on Taiwan's "independence." President Ma cleverly side steps this question by saying that the Republic of China on Taiwan has been an independent sovereign state for 99 years.

The problem here is that supposed independence is not recognized by many countries. This problem is also blatantly seen whenever Taiwan attempts to join an international organization and is either blocked out of the organization by China, or is forced to enter under the name "Chinese Taipei."

The second question Amanpour asks is about Ma's push for closer relations with China, and in doing so jeopardizing Taiwan's sovereignty. Again, Ma sort of side steps this question by only addressing the first half of the question on the agreements he has accomplished, instead of perhaps explaining how the direct flights between Taiwan and China are not classified as international flights (as a result, R.O.C. (Taiwan) passports cannot be used by Taiwanese to enter China).

While I applaud Amanpour for trying to ask the tough questions that most of us have been asking, she doesn't quite push Ma for clarifications/explanations on his answers. An example of this is when Ma talks about the "improved relations" between the two sides - Amanpour should have asked why China's missiles pointed at Taiwan are increasing at the same time. I think the weirdest part for viewers of this video who may not know much about Taiwan is the fact that he states at the beginning how the R.O.C. is independent and sovereign, yet later is asked about attending APEC, and Ma simply cannot answer that question because of the truth that China is blocking Taiwan from these summits and organizations.

How can a country be independent and sovereign if another country is able to dictate what you can do on the international stage? Quite frankly, Ma says it himself at the very end when he describes his "3 no's" policy of, "No unification, No independence, No use of force." What? Did not Ma state at the beginning of the interview, "there's no reason to declare independence twice." Listening to this cluster-fudge of an interview is really confusing. One minute Taiwan is independent and sovereign, then seemingly not, then seemingly yes.

What Amanpour needs to do is get Tsai Ing-wen in an interview. Actually, she should have gotten Tsai and Ma on at the same time.

TAIEX Outlook - Week of April 25th

I'm looking for a potential double top here on the TAIEX. Chart below:



Adding to my belief that the TAIEX may soon be under more selling pressure, here's the Shanghai Composite Index chart, where it looks like the bears are in complete control:



Keep in mind that the Shanghai Index was the first to bottom during the global meltdown in the markets in late 08 and early 09, leading the U.S. markets up, and now perhaps leading the way down.

Lastly, the U.S. markets took a plunge today, down more than 2% in one of the largest down moves in recent memory. While there's still a lot for the bears to prove before things get rolling to the downside, it's a reminder that being long in this over-extended market can be brutal.

Ma vs Tsai Debate

A lot of good analysis on the debates going on:

@ Taiwan Matters
@ Kyodo News
@ That's Impossible: Politics from Taiwan w/ A-gu
@ eTaiwan News

Links to videos of the actual debate are on Taiwan Matters, but here's a link to Part I.

As well as a transcript of Part I and Part II (English translation) of the debate.

As far as what I thought from the transcript of Part I, the best points were made by Tsai when she challenged Ma on the secretive contents of the ECFA and how could the Taiwanese public possibly support an agreement of which contents they know nothing about. To that, Ma responds:

The list has not been finalized yet, that’s why we can’t show it at the moment. We try to keep everything behind closed doors during negotiations, but we will make the results public. I promise that I won’t only publicize the list when it’s sent to the legislature.

What Ma fails to mention is that by the time the list is sent to the legislature, it is too late. Negotiations will have been over and the agreement will be well on its way to being inked in.

For most of the other counter-arguments, Ma basically ripped the DPP administration of 2000-2008 as reason for why he is pushing the ECFA as he is now. Arguments Ma made, such as the DPP not getting anything done with China, totally ignores the remarks made by Tsai. Tsai's main points were that this ECFA may be reducing Taiwan's sovereignty; the DPP in the past did not agree to trade agreements because they insisted on Taiwan's sovereignty.

Lastly, Ma's use of the Taiwanese language in certain parts of his arguments was quite demeaning. Does he really believe that inserting a few phrases in Taiwanese will all of a sudden convert these non-ECFA-believers to pro-ECFA-believers just because he spoke in Taiwanese? Gimmicks, gimmicks, gimmicks. To further underline this point, Tsai did not use Taiwanese at all (at least from what I saw from the first part of the video), who would have been the more likely person to do so.

For those who may not know all the past details and comments made by Ma and Tsai, it would seem as if Ma was the winner here. But for those who have been keeping up with all the developments with ECFA, it's clear that Ma's responses just touch the surface of the murky waters beneath.

What's your take on the debate? You can vote in this on-going poll on Yahoo:

http://tw.news.yahoo.com/poll/poll_question.html?catid=578

The numbers are currently (for who had a better performance?):

1.馬英九		37.1%	2433票
2.蔡英文		59.4%	3895票
3.都不好		3.5%	230票