Market Outlook for the week

Worse than expected corporate earnings from several of the big U.S players started to dampen the recent bully rally. This is evident in last Thurs & Fri sharp close down on our local market. More mixed earnings results from the U.S, combined with reports of the spreading credit problem in the mortgage and corporate lending markets contributed to very sharp declines across all major indexes. The Dow Jones Industrial average experienced its worst week in five years and several of the other indexes have fallen below their long-term moving averages for the first time in several months. However, U.S GDP rose at a better than expected pace which indicates that the housing problem may not be that serious after all.

Market expect to open lower in early part of the week but should see some climb towards the end of the week. Trade with caution. Recommend hold on stocks.

8 Secrets for Success (Part 1)

1. Take 100% Responsibility for Your Life – In a societywhere people blame everything from their parents to the governmentfor failure, successful people are those who don't buy into thismentality or succumb to the "victim" thinking succeed. To blame something or somebody outside yourself is saying they have control of your life and not you. Someone else's opinion of you doesn't have to become your reality.

2. Live Your Life On Purpose - What separates motivationalthinkers from the unsuccessful is that they believe they'redoing what they were put here to do. Just living is just getting through the week with the least problems. But when you live your life on purpose, your main concern is doing the job right. For the entrepreneur this means finding a cause you believe in andbuilding your business around it. Like for Wendy, her purpose is to touch and inspire at least one million people's lives before leaving this world.

3. Be Willing to Pay the Price - Be willing to pay the pricefor your dreams. Wanting a big house, a luxury car, and a milliondollars in the bank is all very nice, and everyone wants thesethings – but are you willing to pay the price to get them? This is one of the major differences between the successful andunsuccessful.

4. Stay Focused – Every day we're bombarded with hundredsof tasks, phone calls, messages, and everyone competing for ourtime. Focusing requires giving up something in the presentbecause you are investing your time in something that will payoff big-time down the road. Jack Canfield and Mark Hanson wereturned down by 30 publishers when they submitted the first"Chicken Soup for the Soul" book. Instead of giving up, they stayed focused on their goal and did four or five interviews per day for radio, TV, and newspapers, for five days a week for a whole year. Eventually, a small publisher decided to take a chance on their book, and of course now it's a best-sellerthat has spawned an entire series that have sold more than 10 million copies.



Catch the other 4 secrets in Part 2...

Stock Outlook #7: 6 U.S stocks for TODAY

1. Aetna (NYSE:AET - News) announces quarterly earnings on Thursday morning, watch for $0.80 EPS.

2. Beazer Homes (NYSE:BZH - News) should announce -$0.46 EPS before the market opens on Thursday morning.

3. Analysts will be watching for Exxon Mobil (NYSE:XOM - News) to report $1.94 EPS on Thursday.

4. Ford (NYSE:F - News) hopes to announce -$0.40 EPS tomorrow morning.

5. Wendy's (NYSE:WEN - News). Report out on Thur morning. WEN is looking for $0.33 EPS.

6. XM Satellite (NasdaqGS:XMSR - News) both report on Thursday morning; XMSR expects -$0.44 EPS.

Good Luck All !

For Option Traders: Butterfly spread

One good strategy to use is Butterflyspread. One profits when the underlying moves towards the short strike or remains in a reasonable trading range until expiration. A traditional butterfly is a simple, three-legged option spread. It is the simultaneous sale of two at-the money near month calls or puts and the purchase of one call or put at the next higher and lower strikes, in the same expiration, in the same underlying. The skewed butterfly is also a three legged spread but the strikes are widened in order to embed a short vertical spread inside of the butterfly. This is done in order to reduce the cost and create a net credit. This trade has more risk but a higher probability of success and greater potential maximum profits.

Example 1: (Balanced Butterfly)

XYZ index is trading at $100 and it's mid Dec.
We will sell two Jan 100 calls and buy 1 Jan 95 call and 1 Jan 105 call for $.90 debit.
The maximum risk is $.90, and the maximum potential profit is $4.10.
The max give up (slippage) over fair value should be .20 for self-directed clients, .10 cents for TOS auto-trade clients.

Example 2: (Unbalanced Butterfly)
XYZ index is trading at $100 and it's mid Dec.
We will sell two Jan 103 calls and buy 1 Jan 102 call and 1 Jan 105 call for .40 credit.
The maximum risk $1.60, and the maximum potential profit is $2.00. We hope to buy back the 103/105 vertical back for a small debit (i.e. a .20 debit) prior to closing the entire position to alleviate margin risk.
The max give up (slippage) over fair value should be .20 for self-directed clients, .10 cents for TOS auto-trade clients.

Top 50 Performers 1H07

Below is a compiled list of the Top 50 Performers for the 1st half of this year. Hopefully this report can help you conjure up trading ideas for the second half. Do remember that past performance is not an indication of future performance. Always trade with care. Good Luck!

8 Secrets for Success (Part 2)

Continue from Part 1...

5. Become An Expert in Your Field - One striking factor allsuccessful people have in common is how seriously they taketheir profession. They strive to be the best at what they do,and do almost anything to improve. If someone followed youaround all day with a video camera at your business, would itbe a tape you'd be proud of or embarrassed about? Make thedecision today to work at being the best in your field. How?By finding out what the "best" in your field are doing, and dowhat they do.

6. Write Out a Plan for Achieving Your Goals - Write out anaction plan/map for how you're going to achieve your goals. Trying to reach your goals without a plan is like trying todrive from Los Angeles to Chicago without a map. A goal thatisn't written down is merely a wish or fantasy.


7. Never Give Up - Never, never, never give up. When you'refully committed to achieving your goal, giving up is not anoption. You must be willing do whatever it takes to make ithappen. The power of perseverance is an awesome force. Think of the inchworm – if it pondered the length of the tripfrom start to finish before it started, it probably would nevermove. To a worm's point-of-view, the garden path must looklike a trip to Mars. Never give up! Keep on taking steps towardsyour goal and pretty soon you're there.

8. Don't Delay - Nobody knows how much time they have leftto accomplish their dreams, and we must remember that we don'thave forever. The clock is ticking, and sooner or later yournumber comes up and you're gone. Successful achievers knowthis too, but they don't view it as a "negative". Achievers use it to "spur them on". They go after what they want as energetically and as passionately as possible, for as long asthey have.

Upcoming Result Annoucement

Warren Buffett speaks

Words from the legend...

Read and think before you invest
When a 17-year-old who was attending his 10th consecutive Berkshire annual meeting asked how to become a better investor, Buffett offered some simple but golden advice. Read everything on investing you can get your hands on and fill up your mind with various competing thoughts. After doing that, it's time to get started, as investing on paper and dealing with real money is like "reading a romance novel and doing something else."

Better to invest in businesses tough for competitors to enter
Asked about his interest in investing in Taiwanese high-tech companies, Buffett remarked that "change is wonderful, but not necessarily for investments." In terms of predicting how a business will perform, he said it's much easier to look at consumer behavior and businesses that have big barriers to entry

8 easy ways to save $$

People always have the stigma that saving $$ requires a lot of time & effort. But is this true? Or are you just not disciplined enough? Many a times, we all know how to save $$, it's just that we need a little reminding. Below are 8 easy saving tips that take less than a minute to implement.

1. Make multiple portions of dinner. Box up leftovers for tomorrow’s lunch, and freeze portions to eat later.

2. Unplug the electrical items you are not using (TV, computer, microwave, cell phone chargers, etc.).

3. Decide what you want to eat before opening the refrigerator door. It takes energy to keep the temperature cool if the door is standing open.

4. Pick store-brand items at the grocery store instead of the expensive name brands.

5. Don’t order soda or alcohol when you go out to eat. Drink water instead.

6. Clean the dust from your light bulbs – they’ll last longer.

7. Fill your freezer; it uses less electricity to keep it cold. If you don’t have a lot of frozen foods, freeze some water bottles.

8. Turn off the water in the sink while brushing your teeth and washing your hands.

My 1st rule to becoming rich is to know how to save. Imagine you earn $10,000 a month, spend $9000 and save $1000. Your friend earns $5000 a month (half of yours!!), spends $2500 and saves $2500. Who has the last laugh now?

Market Outlook

Markets emerged stronger last week & Dow is now approaching the 14,000 mark. Initially a triple top formation was lurking, however with Thursday's positive push in prices, this was negated. Consolidation period may be over and the recent record highs points that the market is still bullish and will continue to push towards positive territory this week.

Managing your risks...

Simply put, risk management is a two-step process - determining what risks exist in an investment and then handling those risks in a way best-suited to your investment objectives. Risk management occurs everywhere in the financial world. It occurs when an investor buys low-risk government bonds over more risky corporate debt, when a fund manager hedges their currency exposure with currency derivatives and when a bank performs a credit check on an individual before issuing them a personal line of credit.

U.S Market

Despite the mid-week holiday, the bulls managed to rally together and send the major indexes back toward their respective May highs. Friday's stronger-than-expected employment numbers helped fuel the move. Can Nasdaq move any higher? Interesting...

Emergency Funds

Now that the market has been good for us, have we been too complacent? Did u set aside/use up your emergency funds? Do you even have it in e first place? You OUGHT TO.

Emergency funds are meant to improve financial security for it acts as a buffer and can be used in times of crisis such as illness, loss of job or a major expense. This fund should ideally be at least 6 months of your current salary, depending on each individual's risk tolerance. For those on the conservative side, the funds may be more.

Is the market OVERbought?

With the recent run up in prices so hard & fast, one would expect the market to be overbought and a pullback is possible. Honestly, a pullback is hard to anticipate. I have seen markets of the past continue to barrow through when they were considered to be overbought. Those whom have exited early could only watch at the sidelines. At this point in time, I can only say stick to your trading objective - has your tgt px been met? Is the ROI as set out to be?

My own personal view is the local market is running on its own steam of engine for now. Whatever that is happening around us seem only to either affect us slightly or none at all. Fundamentals seem intact. I suggest staying vested for a while longer.

For those who are more conservative, you may wish to consider safer investment vehicles. See previous post on BONDS.

How about safe investments like bonds?

by Larry Haverkamp

Bonds are a good investment for two reasons.

First, they carry less risk of default. A company that hits on hard times must pay off its bondholders first and stockholders last.

Second, bonds are less risky because of what economists call co-variance.
It is like sound waves created by two loud noises. It is possible to structure the waves so that when they meet, they cancel one another to produce silence. It is incredible but true.

In the same way, volatile stocks and bonds can be combined into a new portfolio to produce much less volatility than found in either the stocks or the bonds individually. It is the magic of diversification.

Stock Outlook #6: China XLX

04/07/07 4.30 pm: China XLX just broke double top. Now @1.32. Expect more upside.

04/07/07 7.40 pm: Today closed @1.34

05/07/07 10 am : Now@ 1.37

05/07/07 12.19pm: Now @1.39. Up 0.07. Your call.

The Art of Fundamental Anaylsis

There are many different types of Investors & Traders whom all have very different trading styles. Today I focus on long-term investing, which is basically holding onto the stocks that you have bought and in time to come, they may rise in price. This very much depends on your anaylsis of the company in which you wish to invest. How each & everyone of us evaluate the worth of a company various and below are some of the aspects that I consider.



1. Sales - Growing much faster than anuual inflation

2. EPS - Gradually increasing & accelerating

3. PM - Rising higher than industrial average

4. ROE - Higher than industrial & mkt average

5. Debt ratio - Low

6. P/E - Gradually Increasing



There are still other factors to look at, so make start making more informed investment decisions from today!

Stock Outlook #5: SBUX

The U.S Market has been quite bearish for several stocks recently. It's a good time to review some of them. SBUX is under the radar alert.

Bearish Divergence spotted. Watch out if it breaks above the 20D MA.