Stock Trading Opportunities Under DoubleTop and Candlestick Gaps (Update)

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Update:  25 December 2018

The dreadful 1/2 day trading on Christmas Eve has seen DOW index wiped off around 650 points or 3% from 22, 445. The index now stood at around 21,800. The nasty Christmas Eve fall covered up another 2 of the candlestick gaps, namely Nrs 10 & 11 as shown in the attached chart. 

(Doubleclick the chart to enlarge)

This 21,800 level is about 800 points from 21,000 or just slightly more than 1,300 from 20,500, which is 2 times the height of the Double Top Channel. According to conventional wisdom in technical charting groups, 20,500 to 21,000 would be the likely range for DOW to make a good rebounce to retest the resistances and the highs again.


Update: 22 December 2018

Out of the 15 candlestick gaps create after Trump announced his candidacy for President to the date DOW completed the Double Top, 4 candlestick gaps, namely Nr. 12,13,14 &15 as shown in this attached chart has been covered. There are still 11 more candlestick gaps left to be covered. (Double Click Chart to Enlarge)

Update:  20 December 2018

An Excel sheet was built to determine just exactly how many candlestick gaps were created between the time Trump announced his candidacy for Presidency (around early 2016)  to the present date.  We were surprised to get the following results:-

	Date	Gap low	Gap high	Gap size
1	Feb-12-16	15,974	16,012	38
2	Jun-28-16	17,410	17,456	46
3	Jun-29-16	17,705	17,712	7
4	Nov-04-16	17,987	17,995	8
5	Nov-21-16	18,961	18,963	2
6	Feb-02-17	19,923	19,964	41
7	Feb-10-17	20,298	20,323	25
8	May-19-17	20,857	20,860	3
9	Jul-11-17	21,442	21,468	26
10	Sep-08-17	21,847	21,928	81
11	Sep-11-17	22,067	22,087	20
12	Sep-29-17	22,406	22,416	10
13	Oct-02-17	22,559	22,563	4
14	Oct-17-17	23,002	23,087	85
15	Oct-19-17	23,167	23,202	35

There were a total of 15 candlestick gaps created over one and half years,  between Feb 2016 to Oct 2017.  The candlestick gap size ranges between 2 points to 85 points.  None of these are run-away gaps and therefore,  they are likely to be covered up sooner or later.

(double click for enlarge picture)

It is to be noted that gap-15 created on Oct-17-2017 has just been covered up by yesterday's market fall where DOW lost about 350 points or 1.51%.  The fall also broke the support at 23,500 and complete the forming of the double top pattern which often signify the start of the bear market.  DOW's next target will be around 21,000.

8 December 2018

There are lot of posts in the Net  written about DoubleTop and Candlestick Gaps stock trading patterns.  These patterns traditionally offer trading opportunities where one can determine how the stock would react in the coming days or months.  

Presently,  DOW has created 4 candlestick gaps and about to form a Double Top after May 2017 as shown attached.  This article will discuss how one could seize the opportunity to trade the stocks and earn or save some money in stock tradings.

What is a DoubleTop?

DoubleTop is a trading pattern formed in the chart where prices of the stocks or indexes make two peaks over a period of at least 2 months with a usual price difference of less than 5% as shown in the above chart.   

The occurrence of DoubleTop pattern shows that the traders are not willing to trade above  the highest level attained as they do not  have confidence that the price will continue to go higher than that "highest level".   The next step these traders will take is to liquidate their position,  waiting for opportunity to sell their holdings into the strength of the market.

What is a Candlestick Gap?

Candlestick gap is another trading pattern that registered the willingness of the traders to push the price higher in the coming days or weeks or even years when there is a  good news.  For example,  if there is a significant event such as a company restructuring that attracts 10 or 20 times the trading volumes,  the market wisdom is to expect the price to hold above the gap price for at least 2 or more years.  This candlestick gap is often termed as “runaway” gaps.   There are also other types of candlestick gap patterns.

What happened in DOW recently?

DOW has created a total of about 4 candlestick gaps after May 2017 although there are also other candlestick gaps created before that.

The first (Gap 1 shown in chart)  was on 19 May 2017 where the market was told about good economic reports of declining jobless rate and also strong profit growth in  Wal-Mart Store and many other US companies having businesses overseas.

Then Janet,  the Chair of Fed,  reported that the US economy was strong enough to absorb gradual rate increases over the next few years in mid July 2017.  This propelled the stock to make all time high to close 21,532 with another candlestick gap (gap 2)  created.

After that,  some similar and  significant events also happened about the economic growth in the other candlestick gaps when stock price jumped to make historical high.  However, none of the 4 candlestick gaps have attracted significant changes in trading volume,  which means these candlesticks are just "ordinary" candlestick gaps which would be “covered” up within a period of less than 2 years.

As for the DoubleTop formation,  Apple announced on 30 Jan 2018 that it was cutting production of iPhone X by half from 40 million units to 20 million units.  This surprise announcement put a “lid” on the stock prices and the market remained stagnant for the next 9 months.  In-between,  US-China Trade War spooked the market.  This latest DoubleTop formation will be completed when  DOW falls below 23,500 in the coming weeks as indicated in the following chart.

Where do we expect DOW to go Next?

Should DOW fall below 23,500,   completing the DoubleTop formation,  the traditional market wisdom is to expect DOW to  fall to about 21,000,  which would officiate DOW entering the  Bear Market territories,  ending the 9-year bull market which started from March 2009.    DOW will also cover up all the 4 candlestick gaps described above.  

Whether DOW will continue to fall to cover the other candlestick gaps created before May 2018 is anybody's guess at the moment. 

Disclaimer:  This article is for information and  educational purposes.   Readers are advised to  conduct their own research and study to make their  own investment decisions.

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Other similar article :  http://skyjuiceiswater.blogspot.com/search/label/stock

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How to Clean and Restore Ceramic Water Filter Medias?

24 December 2018

Most water filter medias nowadays are the disposable type.  The manufacturers often recommend to  to replace the filter media once every 6 to 9 months.  There are also special types of water filter that use ceramic as a filter media.  They are either in dome, dish or cylindrical shape.    

For these kind of filter medias,  the manufacturers often suggest to sandpaper the surface of the media with sand paper or rough sponge once it is clogged with dirt.

However,  after some operations, one would find that this cleaning method will no longer work especially in gravity flowing water filter like this type.    Water just refused to flow properly.

Why?

Water filter,  especially the ceramic filter,  has tiny little micropores to trap dirts and microorganisms of larger than 0.3 microns,  Micro living organism such as living microorganism,  fungi, microprobes or single cell living Eukaryotes are always present in water.

These microorganism can clog up the micropores of the ceramic filter media rendering it useless as water filter material unless they are be removed regularly.  Some of these microorganism will also release air that can sometimes be trapped in the micropores of the filter,  reducing the flow of water.

How to Remove them?

1.  Back washing or Priming the filter

If it is mostly air that is being trapped in the pores,  one could prime the ceramic filter using a soft rubber washer as shown in this video for the Berkey Filters.    However,  this method will need careful control of the water pressure or some ceramic filter can easily crack under such pressure.   Also,  this method has little or no effect in getting rid of living microorganisms.  

>

2.  Boiling the Filter

This method involves filling up the filter media with water and then water boil the filter under simmering heat.  

Step by Step

Description	Action	Remarks
1.   Filling the filter with water	1.  Put the filter under a tap and fill it up with water 2. use a chop stick or similar to “poke” the outlet hole until all the air inside the filter are released.	Fill the filter with full water
2.   Placing inside a pot	Place the filter upside down (i.e. with the outlet facing up) in a small pot and fill the pot with water,  making sure the filter is only ½ to 3/4 immersed in water
3.  Boil the water	Under simmering heat,  bring water to  boil for about 3-5 minutes.   Using a small straw to pick up some boiling water from the pot  and transfer the boiling water slowing into the outlet hole of the filter to ensure the water is always full inside the filter	The topping up of the boiling water inside the filter media will ensure there will be  a water pressure to force the microorganisms eventually out of the micropores under  gravity.

Precautions

1.  Always make sure the filter is half or 3/4 immersed in hot water and never allow hot water to touch the  plastic part of the filter.  This is because the boiling water can damage and distort the shape of the plastic;

2.  Never lift the filter from boiling water by holding the base of the plastic as the base can be easily dislocated from the filter.  This is because the boiling water that heats up the ceramic may soften the hot glue that is used to hold the plastic base to the filter;

3.  Handle the hot water with care.  If needed be,  use an electric fan to cool the pot and the filter media together before removing the filter from the pot.

Results 

This filter shown in the video has not much water flow before the boiling water treatment.   Now it is flowing about 75 drops of water per minute.

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Why the Present Stock Market Correction Can be Catastrophic ?

22 December 2018

Nowadays,  many websites that predict stock market trend are pointing towards one direction i.e. the present stock market will go down and the correction will be quite serious.  However,    none has a good answer just how serious it will be and why it will be so?   This article intends to throw some lights to explain why.

How? 

Just by using trading volume in NYSE.

Why?

We all know that trading volume is important when we analyse the stock market.   If there is an up market,  there must be up trading volume to support it;  otherwise,  this market will not last very long.  Similarly,  if there is down market,  the down trading volume should also reflect the same.

What if not much up and down volumes?

This will mean there isn't much trading volume to support the market.  Market will soon “collapse”,  whether it is going up or going down.

How to get the information?

If one care to take a look at any historical data or chart of any stock exchange,  one should be able to see volume.   It is always plotted as a bar chart at the bottom as shown.  

This volume bar chart that shows the total trade volume will not tell how much of the volume was  buying up and how much was buying down the market.   

Fortunately,  freestockchart.com has already prepared such an up and down volumes and plotted them as  NYSE UP Volume Index and NYSE Down Volume Index.   For example,  the following chart is a "NYSE Up Volume Index" chart.   However,  this chart  is not very useful.

If we hide the daily data and use the chart's 20-day MA to plot from year 1966 to date,  one could immediate see a pattern began to form as shown attached

IT IS A SURPRISE TO SEE THE PRESENT RALLY AFTER 2010 IN NYSE HAS NO SUPPORTING UP TRADING VOLUME!!!

This is also true for the down trading volume

 

What Do All these Mean?

1.  The retail investors have not much  confident in the stock market after year 2010 and after the market picked up in March 2009; 

2.  One could see that the trading volume spiked up to 4,500 billions in the 20-day, indicating many had taken the opportunity to sell into the strength of the 2009 market before leaving the market;

3.  The market picked up most trading volume after 2002 when the trading volume increased to a level above the NYA index.  This is mainly because of the explosive use of the Internet facilities to increase the trading accounts.

Gallup,  the organisation that polls and provides statistical results has this following chart to show.  The chart shows the US Adult traders increased from 58% in around year 2000 to a peak of 65% in 2008.  Thereafter,  many left the market and the US Adult traders dropped to 52% in 2016.   This Gallup’s chart supports the reason why the market has diminishing volumes after 2008/2009.  

Why Market Still Keep Going Up?

Mr.  Ben Bernanke who had “engineered” the Quantitative Easing (QE) in 2008/09  must have the correct answer when he “flooded” the market with liquidity that was available only to the big players such as Banks,  Institutions and other big financial users.  These few players,  having “loaded” with excess liquidity,  was probably given the “permission” to  also “flood” the stock market.  One thing they could have done was to push up the stock prices without pushing up the trading volumes. 

What will happen next?

Your guess is probably better than mine.

What we should do next?

Watch carefully how Fed reacts in its “liquidity tightening” exercise and how Fed reduces its balance sheet.  As Fed reduces its balance sheet,  it will also “pull” money from the market and “destroy” them.  This will “clip the wings” of the Banks,  Institutions and other big financial users.  It would bring the stock market to its knee.

Therefore, it is always good to pay attention to the trading volume and analyse why there is an abnormal increase or reduction  in the trading volume.  Also,  one should pay good attention to track the margin loans that investors (including banks and institutions ?)  borrowed to prop up the market.     
Wolf Street has just reported that about $1.3 Trillion “Leverage Loans” increased since 2014 might just  come “Unglued”.

Disclaimer:  This article is for information and  educational purposes.   Readers are advised to  conduct their own research and study to make their  own investment decisions.

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How to Clean Air Conditioning Evaporator Unit Properly

20 December 2018

There are a lot of articles written about how to clean air conditioning evaporator units.   Many advised  to use chemical foam;  some preferred to use the cleaning chemicals specially blended for air conditioning washing.   There are merits and demerits depending on how each method can remove the “dirt”.  This article will describe a method that will thoroughly clean the air conditioning evaporator. 

Where is this Evaporating Coil located?

The coil is always located indoors for split unit air conditioners.  It is always hidden inside the air grille box or cover and always behind the air filter as shown

When to do Chemical Cleaning?

The air conditioning unit will tell us with the following telltale signs:-

1)  The air conditioner is no longer as cold and;

2)  The fan speed needs to be turned high before one can feel any cold air blowing,  plus

3)  The air conditioner is making a louder air splashing noise and lastly;

4)  The compressor will turn off sooner before the set room temperature is reached (only for air conditioning unit that has anti-freezing control for the evaporating coil)

Why Compressor Cuts Off Sooner?

The air conditioner that has anti-freezing control will have  a thermal sensor attached to the returning refrigeration pipe.  If the coil is dirty,  the evaporator coil temperature will get lower and will eventually freeze up unless the temperature change is picked up by this thermal sensor which will automatically cut off the compressor operation.

What are the Traditional Methods?

a)  Foam Cleaning 

One would spray foam onto the coil and wait for about 10 to 15 minutes for the foam to work its way into the coil. After that, spray washing the coil with clean water or just leave for the condensate water to "drain"  the foam into the outlet drain.   This method is fast but does not allow the fan blades to be cleaned

b)  Chemical Spraying

One would just spray the chemical onto the coil and wait for about 10 to 15 minutes for the chemical to work into the coil,  then spray washing the chemical.  This method can be used to clean the fan blades.

Both methods are fast but they are not cleaning the coil thoroughly.  For proper cleaning,  one should clean the air condition evaporator unit  using “Chemical Bathing” method which is recommended to be done at least once every 10 years.

What is Chemical Bathing Method?

It is a cleaning method that pours chemical water over the coil to clean the coil thoroughly.  This method will involve some dismantling including the draining tray if one wants to conserve the chemical water for repeated cleaning;   otherwise,  one could just let chemical water drain out into the outlet drain.     

Preparation: 

 Besides having the necessary things such as a ladder,  paint or cleaning brushes,  cleaning rags and other preparation work such as switching off power supply etc,  one should have the following

Description	Action	Remark (Double-click to enlarge)
1.   Chemical Cleaning Fluid	Available easily from Horme Store or any air conditioning hardware stores @ about SGD$15/= per 5 litres or gallon
2.  Plastic basin
3.  Plastic tumbler or mug
4.  Cotton buds
5.  Hand Gloves		To prevent hand and fingers from prolonged soaking in the chemical water

Step by Step 

using Panasonic Inverter Air Conditioner as an example

Description	Action	Remark (Double-click to enlarge)
1.   Preparation work	1.  Switch off the power as safety precaution 2.  Remove the filter if necessary 3.  To make the chemical water,  mix one cup of chemical with about 5 cups of clean water in the plastic basic
2.  Dismantling the air grille cover	1.  Remove the plastic caps that covered up the 2 screws and remove the screws as shown; 2.  Lift to open the horizontal air vane to clear the grille cover; 3.  Hold both sides of the grille cover and pull it forward toward yourself 4.  If the cover could not be dislocated and removed easily,  try releasing the 3 plastic catch that holds the top of the grille cover as shown
3.  Dismantling the draining tray	The draining tray and the air discharge grille is one complete unit. To dismantle 1.  Pull the air discharge grille downward to loosen  the tray unit from its seats 2.  Remove the drain hose that is connected to the draining tray
4.   Coil Surface Cleaning	1. Dip paint brush in chemical water and brush the fins in the same direction as and along the fins; 2.  Collect the chemical water at the bottom of the coil using the basin 3.  Repeat action until the fins are all cleaned and shining on the surface.
5.  Doing Chemical Bath	1.  Use the plastic mug to pour the chemical water from the top of the coil and collect the water at the bottom of the coil using the basin 2.  Repeat for the rest of the fin and coil;	Note:  A air or water pressure pump would be helpful to push the chemical water through the fins but it is not really necessary unless the coil is so stuck with dirt that cannot be cleaned by pouring water over the fins
6.  Water Rinsing	1.  Repeat step 5 but using clean water instead of chemical water 2.  Change the water as and when necessary for proper cleaning	The chemical water needs to be rinsed "thoroughly" so that it will not be left to “attack” the flimsy fins
7.   Fan Blade Cleaning	1.  Dip the cotton bud in chemical water and clean the blade leaf by leaf and blade by blade until all the dirt are removed Note:  One could use chemical spray to soften the dirt before removing them either using water and follow up the cleaning by using cotton buds.	Important:  Never apply any pressure to the blade as a bend in the fan blade will put the wheel off balance,  creating unnecessary noises and vibrations during operation  The alternative is to dismantle the cross flow fan by removing the screw as shown above and removing the fan bearing on the other end.  It would be necessary to dismantle the control board and also dislocate and lift up the evaporator to provide space to remove the cross flow fan.
8.  Completion and Assembly	1.  Reverse the dismantling procedure to fit all components back in place 2.  Switch on the air conditioner after placing a piece of cloth or plastic to catch the  dirt “flying” out from the fan blades.	If the coil has been properly cleaned,  one should notice that the air conditioner’s compressor will never stop operating until the set room temperature has been reached.

Result

Unfortunately,   there was no picture capturing the result of the cleaning but this picture did show up the shine of the lower part of the coil under the ceiling light.   The picture was intended to show the temporary shelve put up to ease the cleaning operation of the fan blade.