US Presidential Election Strategy

Buy Low; Sell High… The Golden Rule In The Market… Hardest To Follow… Best Risk vs. Reward Ratio…

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Some members of the public have emailed me…(I summarized the key points)
“ Dear Kelvin, my stock portfolio is down by almost 20% in a matter of days… I cannot eat well nor sleep well. Do you think the market will rebound? Should I cut once it rebound?”
 ” Time to short right? I see STI hitting 2800″
 ” I should have shorted Noble after the results. Do you see it going below $1?”
My Personal Take?
The golden rule for trading or investing is Buy Low, Sell High.
Buy Low can only be made AFTER a market has completed its SELLING climax and usually, that’s where the Retail dumps out their portfolio.
But for the sell transaction to be made; the market would need buy from the panic sellers. My question is who are these people?
90/10 Ratio is a well known ratio to all seasoned and savvy traders/investors as it present 90% of the people involved in the market
do seem to loss their money instead despite the initial objective was to profit from the market instead.
So now, we have seen the selling come in full force and so called “support levels” have breached and people are dumping and getting their trades done…. I really wonder who is buying instead?
Today, we saw many stocks breaking their “support levels” and took a beating on their prices. We see it as a Great Opportunity instead.
We have utilised about $50% of our money to load into SIMSCI, HK, ES at 332.40, 21144 and 1356.00. Now STI is down 35pts at 2943.
A man’s poison could be another man’s meat therefore we will let you make your own decision.
Note: We were stopped out this morning from our buy yesterday.



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US Presidential Election Strategy comes once every 4 years. Just over on 6-Nov-12 Tuesday afternoon.

	% of time market is up over next four years
Dow is up on day after election	54%
Dow is down on day after election	73%

Indeed Dow is down -333 pt after election from Tuesday afternoon.

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From MarketWatch - Mark Hulbert   

I am afraid I may have encouraged investors to expect that a big down day after the election would reverse itself as early as the next day. Such a turn of events would be very welcome, of course, given the Dow’s drop on Wednesday of more than 300 points. See Market Snapshot for details of the Wednesday selloff .

Unfortunately, though, the reversal to which I referred in my post-election column is over the longer term: between what the market does on the day after the election and its direction over the full four years of the subsequent presidential term.

That reversal does not apply to what happens on the day after the day after the election.

Election 2012
• Barack Obama wins another four years
• Obama victory sets up the next battle 
• Five things the Republicans must do now
• Time for Obama to show leadership on taxes
• Three global tasks for the second term
• Democratic wins may thwart grand bargain
• Three post-election concerns for investors
• Obama: The best is yet to come for America
• Romney urges an end to political bickering

Consider the 15 elections since 1900 in which the Dow Jones Industrial Average DJIA -0.94%  dropped on the day after. In eight of those cases, the market rose on the next day — the second trading day after the election — while it fell in seven. That’s about as close to a coin flip as you can get.

I suppose diehard optimists could detect some silver lining in these results: A big down day after the election doesn’t necessarily lead to even more downside the subsequent day. Still, it’s a stretch.

A far better idea is to focus on all the same fundamental and technical factors on which we would focus any other day.