How to use McClellan Summation Index to improve your stock trading skills?

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The Danger of Margin Trades

27 December 2021

Investopedia said McClellan Summation Index (MCSI) is a long-term version of the McClellan Oscillator, which is a market breadth indicator based on stock advances and declines.  But what does that really mean to a layman or a beginner in stock trading?

Some said the stock has speed and momentum.  It may be easier for a layman to understand if we were to imagine MCSI or McClellan Oscillator is measuring the momentum of a stock.  Therefore,  if the stock momentum is strong,  the stock prices can go very far;  if not,  it will stop moving forward and might even fall soon after.  This article will discuss how we could use this MCSI index to understand the stock movement in the market.

What is the use of MCSI? 

Simply said,  MCSI is just a tool often used by Technical Analysts to predict the stock movements in the market. The stock market always consists of many different kinds of stocks and many different types of players.  About 80% of the players are just small players;  only the rest of the 20% are the big players.  But,  this 20% will always be the ones that move the market. In other words,  using MCSI,  one can roughly tell if the big players are involved and if the market indexes will be going up or going down.

What is this MCSI?

For those who are interested in the details, etc,  please visit Investopedia.  Meanwhile,  we only need to know that they use the numbers of stocks moving up and moving down to work out the MCSI.  The MCSI will "jump" when there is lots of stock moving up in the day and vice versa.

How Does it Work?

The following example shows the MCSI for DOW plotting in parallel to S&P.   The MCSI is shown in the red/blue line with the scale on the right.  The S&P is shown in blue line with the scale on the left

The chart might be seen to be a bit confusing and intimidating but there are only 7 interesting points that one would need to know.  They are marked as shown in the chart. 

a)  Point 1

This shows that the S&P index was moving in line with MCSI.   Most likely the big players were in the market pushing up the S&P index.

b)  Point 2

The S&P was still moving up but many big players had decided to quit after seeing the market had started to lose momentum. Technical Analysts will say they see a "divergence" between the MCSI and the S&P. 

c)  Point 3

The S&P hit a minor bottom and the big players resumed their plays with MCSI going above the last high.  The buyup momentum was quite big and aroused many smaller players to join and continue to push the market up even though the big player had left the market.

d)  Point 4

This last push to another high is obviously going without the help of the big players as there is no momentum at all in the buying up.

e)  Point 5

Point 3 is repeated here.  One could see some big players joined in at one stage when the market hit the bottom.  But they decided to quit soon after,  leaving the market to the smaller players again,  propping up the market.

f)  Point 6

The market has hit the major bottom. 

g)  Point 7

The market has hit the major top.

How to tell stock movement in 2022?

The stock movement is obviously badly hit by the Covid-19 Pandemic.  Covid-19 has caused the market to slump in early 2020. The MCSI stopped short at around 1,000;  thereafter,  the market has an even play with S$P going up in line with MCSI.   The big players then left the market around April 21,  leaving the smaller ones pushing up the market.  Again,  we see a "divergence" between the MCSI and the S&P.   We are now expecting to see bearish market moves in the coming days or weeks.

However,  we might be disappointed this time to expect a crash in the market because MCSI has never been pushed into the major top region or above 1,400.  One can therefore envisage that the big players might need a little more time to accumulate enough "bullets'  to "send" the market to another major bottom.   

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.

What is the unemployment rate in China?

25 December 2021

Video Summary

Before 2018,   China was having an almost full employment rate.  The unemployment rate was under 4%.  Then came U.S. President DonaldTrump,  slamming tariffs and other trade barriers on China in 2018 sending China's unemployment rate to 5% or more.   The rate came down to about 5% after Biden took over the office in January 2021.  

What the Critics Said?

The Critics are expecting more unemployment.  They were of the view that China has under-estimated joblessness.   They said China had not counted adequately the "149 million self-employed business owners and nearly 300 million migrant workers, who regularly travel from their rural hometowns to find employment in urban areas".  This 500 million is about 75% of the Chinese total workforce of about 800 million people.  The economists were claiming "The downward pressure on China’s economy has increased significantly, and the employment situation has continued to deteriorate,”   But how bad is the actual unemployment?.  

How Bad?

It is believed that nobody can really tell for sure. The official media has propagated about a very good outlook and a very promising future for the Chinese people.  It is as if unemployment is always challenging but never a problem in China.  For example,  this propaganda claimed that the 2021 employment is steady and inching better with many targets completed.

The Xinhua News Agent,  the official newspaper claimed that Shanghai has only 144,000 unemployment for the 1st 9 months.  They intend to make Shanghai have an unemployment rate lower than the national figure of 5.5%.  

How we could verify?

SCMP in that article questioning China's unemployment rate has given a hint.  It said China has a Social Security Regulation (SSR),  requiring employers to make contributions to the insurance schemes for each and every employee. And the Human Resources and Social Security Bureau (HRSSB) (人力资源和社会保障局) will always keep a registry and payout unemployment insurance to the worker.   Therefore,  it is possible to roughly gauge and judge the unemployment rate for each and every city where one can find such reports. 

For example, Shanghai's HRSSB has  this annual report for 2020

The report claimed that for the 1st quarter (1季度）2021,  there were about  472,500 jobless claims.   The projection based on this figure for the whole of 2021 will be roughly about 1.80 million jobless claims.   

According to Xinhua News,   Shanghai has an active workforce of around 11 million,  this 1.08 million is about 1.8/11=16.4%.  In other words,  Shanghai could have much more than 18% unemployment in 2021 if we take into accounts the following:

1.  Not many are keen to claim insurance unless they have no choice.  This is because most Chinese would not like to have a record in the Bureau.  It will make them difficult to find a good job in the future;

2.  Many employers in the private sector tried to avoid paying the high insurance contribution whenever they can;

3.  Most Chinese are afraid to claim insurance for fear of losing their "face".   

What is so Alarming?

Shanghai's 1st quarter report of jobless claim numbers turned out to be 472,500 which is 157,000 or 50% more than the whole year of 2020.  The report has gone viral has attracted an outcry among the netizens.  

But the authorities were muted about the outcry.  They made no clarification except to announce much lower jobless claim numbers in the 2nd (98,000) and 3rd quarters (184,500) as shown in the following graph.  The 2nd and 3rd quarter figure brought the jobless claim figure to about 650,000 for the last 3 quarters. 

The 4th and final quarterly report is not due until early 2022.   If the jobless figure is about the same as the 3rd quarter of 2021,  it will bring down the earlier estimated unemployment rate from 16% to roughly about 7.5%.  But this 7.5% is still far higher than those figures reported by the official newspapers.

Conclusion

To understand the statistics and the economic figure better,  one would often have to find other means and not rely only on those reported in the official media.  The official bad figures are often downplayed by the  Politicians.  

Although jobless claims can be used to estimate the unemployment rate,   it might not give any meaningful result if there is manipulation made purposely to lower the number of claims.  

Attachment:

1.  Shanghai Human Resources and Social Security Bureau (HRSSB) (人力资源和社会保障局) 1st Quarter Report 2021

2.  Shanghai Human Resources and Social Security Bureau (HRSSB) (人力资源和社会保障局) 2nd Quarter Report 2021

3.  Shanghai Human Resources and Social Security Bureau (HRSSB) (人力资源和社会保障局) 1st-3rd Quarter Report 2021

How Expensive is Singapore's Electricity Price?

25 December 2021

Singapore has deregulated its electricity market.  Its people are buying electricity from the electricity market.  The price will vary according to the electricity plans chosen;  however,  most plans will centre around and be slightly lower than the regulated price.  The defaulted power supply retailer is SP Group.     

Singapore's regulated rate will change once every 3 months or quarterly.   It is worked out based on the past market price using a complex formula which not many people cannot understand.  Here is  a chart from SP Group indicating the prices for various quarters since 2020

How is it compared to other countries?

1)  Among the popular countries

 

Source:  Cable.co.uk

2)  Among Most Expensive Countries

3)  Among the ASEAN Countries

4)  Among Most Popular Countries

Other Related Articles

1.  Why the Electricity Prices & WholeSale Electricity Rates are so high?

What are the Causes of Present Inflation?

23 December 2021

According to a study done by Dennis Bonam,  a Scientist from Netherland,   there was never a case of inflation caused by any kind of Pandemic for the past 700 years since the year 1313.  Most past pandemics always occurred just after the rise of the inflation hike as shown red in the attached map

In the attempt to explain the present inflation which occurred recently,   the Scientist said the present inflation could have been caused by the changes in the fiscal and monetary policies implemented by various countries to prop up their economies.  

Where are the Evidences?

The following chart clearly shows that the Netherland Scientist is not wrong because the monetary policy in the US has made an obvious  "jump" in the US's M2 money supply.  This money that has flowed into the community is suspected to have caused the present inflation in the US and to some extent, the EU areas.  

What are the Areas causing the inflation?

The Analysts in Investopedia have singled out 2 areas i.e Energy & Food.  Investopedia said the US motorists are paying 6.1% more at the gas pump in October and fuel oil prices soaring 12.3%.  The energy rise could drive up transport costs and this would in terms cause the food price to go up in the US.   

But the EU people are not as lucky,  their natural price rose 5 times in the last 6 months as shown in the following chart.  

This rise in natural gas has caused their electricity price to go at about the same proportion because most of their power generation uses natural gas.   The Asian regions are not spared.  This is because the Asians are getting the natural supply from the same sources as the Europeans.

One can therefore say that the inflation in the US might be "sparked" by the pandemic but one cannot say exactly the same for the EU and the Asian regions.  The monetary tapering and interest rate cutting might have a lesser effect on them.

What causes the Natural Gas to surge? 

Russia, one of Europe's biggest natural gas providers, has been accused of intentionally withholding supplies. But President Putin of Russia has denied Russia being the cause.  He blamed the European countries for not doing their homework to increase their storage capacity. 

So far,  no one has discussed China being responsible although China has banned the import of Australian coal in October 2020.  They are now drawing much more natural gas supply from Russian and the US.  Today, they are the largest importer of natural gas in the World.  

This article has deliberated quite a lot about how and who could be responsible for the demand and supply problem in the European areas.

In Conclusion

The present pandemic could have "sparked" the inflation in the US causing the energy and food prices to rise;  however,  one could not say the same for the cause of inflation in the EU and Asian regions.  It is envisaged that this inflation problem happening in EU and Asian regions will not be get resolved unless some countries like China can reduce their demands or Russia and the US can increase the supply of natural gas.

Advanced Digital Electricity or Smart Meters can save Money?

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1) Update: 23 December 2021:- Worth taking up such a plan now?

21 December 2021

So your electricity market has been deregulated and you can take up an electricity plan to buy electricity from the market.   Have you ever considered taking up an electricity plan that can save money by using electricity wisely?  This article will tell you how.  

How?

Step 1:  Change the conventional mechanical electricity meter to the Advanced Digital Electricity Meter.  Different countries name this meter with different names.  Some call it a Smart Meter;  in Singapore,  they call it Advanced Metering Infrastructure(AMI) for some reasons.

There might be an installation cost of a nominal amount.   Some Power companies or retailers might charge also a small monthly fee for the use of digital lines to transmit and record the usage of the electricity.  

Step 2:   Take up an electricity plan from an electricity retailer and specifically request to "buy" electricity measured in terms of time intervals such as every half an hour.  This is because most electricity plans are fixed-rate plans or tariff discount plans.  They do not have such time-interval measurements.    So far,  there are one or two retailers in Singapore that can provide such a plan.   It is the Singapore Power's Wholesale electricity plan or SPWS and the Keppel's Knight plan.   

How to use Electricity Smartly?

It is always easier said than done.  Simply say,  it is how we can change our habits of using electricity by avoiding using electricity when the price is high.    

How Does it work? 

In the electricity market,  the Generating companies generate and sell electricity to the market in terms of a time period which is usually 1/2 an hour.   

The generating companies will always have varying generation operating costs.  They would sell electricity at a high rate during the "peak hours" when everyone is using the electricity.  Therefore,  if one can avoid using electricity during these "peak hours",   one will be able to save money.

Why I must change my mechanical meter?

The mechanical meters are just measuring how much one has used electricity,  It cannot tell when the amount of electricity was used.  There is no way for the electricity retailer to work out electricity usage in terms of the time intervals. They can only work out one's electricity usage based on a load profile provided by the regulatory authority. 

How much can I save?

If one can avoid using high-power appliances during "peak"  hours,  one will be able to save 30 to 40%  of the electricity bills as shown in the following table.    

How to check how much was used?

The electricity metering companies will usually provide some means for consumers to check their electricity usage.  In Singapore,  one can check electricity consumption through a phone app.  

In other countries,  they might provide some other tools such as the "in-home display unit"

Where to find more information about the meter?

The Grid company or electricity metering company will always have the information where one can find more;  for example, this is a pdf presented by Singapore's SP Power.   Here is a good video from CNA.

One can also find information about the smart meter from this Wikipedia.

How do we go about saving money?

Before taking up such a plan to save money,  one should do some detailed planning to find out how much one could save. To do that,  one could an Excel sheet and the electricity price information given by the supply authorities as shown below to work out a strategic plan as to when is the best time to use what kind of appliances.

One can also use electric timers to switch on and off freezers and refrigerators,  preventing them from starting frequently during peak hours.   One could even go to the extreme of exploring various other options such as using high-power rechargeable battery packs and auto-switching equipment in order to use electricity only during "off-peak" hours.   

Dry runs

Although it is not too difficult to switch electricity retailers or switch to a new retail electricity plan,  one might want to do a dry run before taking the electricity plan.  One can either request for the Advanced Digital Electricity meter to be installed to carry out the dry run.  The alternative is to install self-installed energy monitors that are available commercially at around SGD50/=.

Summary

There is no way we can change how they charge the electricity but we can control the way we use electricity.  We can replace our mechanical electricity meter with an advanced digital meter and take up an electricity plan that will allow us to use the cheaper electricity during "off-peak" hours.   

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Update:  23 December 2021

Is it really worth taking up such plan?

Presently,  there is a natural gas supply problem happening in Europe.  This problem has caused electricity prices in European and Asian countries to go sky-high.   The rate between Wholesale electricity price and another price such as the regulated price has widened,  making it not worth the while to take up a Wholesale plan that one can make use of an Advanced Metering system to save money.  The details have been discussed in these two articles

a)  Why the WholeSale Electricity Rate is so high?  
b)  Why this Global Energy Price Hike?

Energy Saving Auto-Switching Lighting System

15 December 2021

Some people do not have the habit of switching off the lights off in bathrooms,  toilets,  staircases,  corridors,  hallways, or in areas such as inside cabinets or locker rooms.   Also,  the elderly have poor eyesight;  they are prone to falling down after knocking themselves against the walls or poles especially when they are probing in the dark during early hours.  This article wants to share a home lighting system that these people can use at home,  not only to save energy but also to protect the elderly.

Auto-Switching Lighting System?

These are lighting systems that will switch on automatically when someone is approaching the light fittings.  

The "key" of the lighting system is the sensor that will sense the presence of some moving objects. There are generally 2 types of sensors available in the market for the auto-lighting system.   One of them uses Pyroelectric InfraRed Sensors or Passive InfraRed Sensors (PIR) & the other uses Radar Motion Sensors.  For those who are interested to know more about how motion sensors work,  please read here.

What is available in the Market?

There are plenty of different kinds,  types, and makes of auto-switch light fittings available in today's market.  They are all made from LED running either on battery or mains operated. The latter will need an inverter driver to convert the ac supply to dc supply.   

Generally, they fall into the following category:

This project is more interested in using the auto-switch LED lighting system that has a USB charging port.  

Why?  

One can use such a lighting system for wiring up the whole apartment using a cheap and simple wiring system that can be hidden from view and is less dangerous for the novices.   It can save buying a lot of rechargeable batteries and the inconvenience of charging the batteries at regular intervals;  also,  one can innovate to control the lighting system such as making the lighting system only available during dark hours.  

How?

The following is a schematic diagram showing how the wiring system can be set up using the cheap and thin 2-wire flat cable that can be hidden under the carpet,  behind the joins, and alongside the edge of walls or fixed to the wall without elaborated wiring accessories or otherwise normally required under the National wiring codes.  All one needs to observe is to run the cabling system separately from the normal mains cables.   This would not be a problem if the existing mains cables are of the concealed type which is usually encased in metal conduits for added mechanical protection.

Can Give Examples?

Take for example the auto lighting for the staircase,  there is usually a space underneath the staircase where most would convert it to the storeroom.   This is the best place to install the timer and the 5-volt power supply from which wiring will start to go into the bedroom and toilet etc.  

For the staircase lighting,  some might try fancy ideas such as using strings of LED lights or installing lights at every step of the staircase.  This is really not necessary.   It is just a waste of money.  

Usually,  2 nos of 1.5 Watts 10x LED lights as shown attached as the following will be sufficient to illuminate the staircase depending on the flight of the staircase. 

One could also use other types provided they have a USB socket for 5 volt supply.   

If the light fitting is complete with lithium batteries,  one might have to find one that has good and reliable lithium batteries or circuitries that will allow over-charging.  This is because some poor-quality lithium batteries can be a fire hazard when they are overcharged for a prolonged period using non-approved chargers.  The alternative is to have the built-in rechargeable Lithium batteries removed.  

What are the Required Accessories?

Other than the electric solder and wires & usual tools like screwdriver etc,  one might need the following:-

What if I want lights to be on all the time?

Different manufacturers have different designs for these LED lightings.  Some come with extra switching facilities allowing the lights to be adjusted if one wanted longer light-on interval or permanently on or off.  If one really doesn't want a pitch dark room after the auto-light is off;  such as in the toilets or bathrooms,  one might want to install an additional small LED lamp.  either off the shelves or construct one from parts and connect it to the circuit. 

 

Is Omicron more Transmissible But less Severe Than Delta?

Jump to 

1) Update: 15 December 2021: Detecting Omicron 
2) Update: 23 December 2021: Omicron, lesser hospitalization
3) Update: 29 December 2021: Omicron in GauTeng,  SA 

8 August 2018

The preliminary hospital data released by the South African (SA) Medical Research Council (SAMRC) appears to suggest that thus far.  This article intends to keep track of the development of Omicron.

What has been found?

This chart released by SAMRC gives us a glimpse of what we say about Omicron as far as transmissivity  & severeness are concerned.

The chart is showing us the following picture.  It tells us Omicron is about 20% more transmissible but  6 times less severe in terms of death at the present moment.

Updated Chart (To be updated regularly)

The attached is superimposing the new cases and death charts taken from Our-World-in-Data.  It is for the whole of  SA and it is also showing that Omicron is more transmissible but less severe than the other variants.  Until further notice, this chart will be updated regularly or when there are many changes. 

The following chart is the situation in SA & Botswana where Omicron is the predominant virus to date.  Omicron's new cases in SA have risen and are about to break their last record.  The death rate still remains muted.

What Can We Expect?

Many are of the view that these preliminary findings cannot represent the real power of Omicron because Omicron is a new variant.   It might mutate & further develop into a more fearful variant in the future.   There is also a time lag between the death and the infection figures.  In other words,  we might expect Omicron to have more deaths at later dates.

While this concern is likely,  the other variants are telling us the time lag between death and infection is usually about 10 to 20 days.  So far,  Omicron has been around for almost 9 weeks or 63 days.  We don't think there will be much change unless Omicron mutates further at a later date into a more vicious variant. 

What to expect for the 2-Dose Vaccinated?

Interestingly,  SAMRC also provided breakdown figures for the vaccinated and unvaccinated for Omicron infection.  

So far,  SA has a vaccination of about 30% which means 1/3 of the population is vaccinated whereas the other 2/3  is unvaccinated.   By using this vaccination ratio,  we could roughly estimate the effectiveness of the vaccines in SA to be about 50% as shown in the following workouts.

The 50% vaccine effectiveness is not enough to keep Omicron at bay.

Again,  the vaccine effectiveness is worked out based on the limited data.  It cannot represent the actual and real result;  however,  it does reflect that the SA vaccine,  which is predominately 2-dose Pfizer,  has lower vaccine effectiveness against Omicron.  These are also the findings of the most recent Pfizer laboratory work.  

What are the Pfizer Laboratory Findings?

Pfizer in its latest press announcement on December 08, 2021, has the following important claims

1)  The Pfizer's booster shot can induce antibodies that can neutralize Omicron to match the level comparable to other variants;

2)  The existing Pfizer 2-Dose may not be able to protect against Omicron.   It has been found to have a 25-fold reduction in the neutralization titers.

What is this 25-fold Reduction?

This is jargon in immunology.  It is a measurement used to indicate the fold-increase or reduction in the levels of neutralization of antibodies.   Here is a pictorial representation of how they work out the 25-fold increase/reduction.

There is a relationship between vaccine effectiveness and fold-reduction but at the present time,  there is no direct conversion available for working out the Covid vaccine effectiveness using the fold level reduction in antibodies.

What to Expect Now?

It has been found that Omicron is a heavily mutated variant.  It has been identified to have 30 changes to its spike protein whereas Delta has only 13 changes.    The scientists to date do not have many clues about how Omicron has acquired so many mutation changes and the speculation is that Omicron appears to be a much vicious variant compared to its predecessors.

The US expert,  Dr. Anthoney Fauci, pointed to the evidence about Omicron being more transmissible but less severe.  But he expected more evidence and data to come before he can reach a definitive conclusion.    Because Omicron is more transmissible,  it has been identified as a candidate "likely to mutate in places where vaccination is low and transmission is high,"    

However,  many experts including those in WHO are keeping track of Omicron closely as they are saying this Omicron could be a 'turning point" of the present pandemic because its behavior is much different from the rest of the variants.   This Professor of Epidemiology,  Prof Ralf Reintjes,  from Hamburg University was of the view that "Omicron could mark a positive turning point in this pandemic".  Let's watch what he was trying to tell us in this video.

Just to recap.  The experts are warning us that this Omicron is very transmissible but at the moment,   it is less severe than the rest of the variants.   However,  we are asked not to be premature optimism & expectation about Omicron.  

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Update: 15 December 2021

Detecting Omicron

The presence of Omicron can be detected using some brands of Antigen Rapid Test (ART) or LFT.  One can also detect Omicron by using PCR tests.  However,  ART or LFT can only tell if one is infected and it cannot tell by which type of virus.   Only the PCR test can tell the difference.    

In the past,  the laboratory will have to do genome sequencing to detect the difference.   This genome sequencing could cost as much as USD1000/= per sample because the detecting agent is quite expensive.   Fortunately,   Omicron shares a testing pattern quite similar to Alpha which has almost extinct and some manufacturers can come up with PCR testing kits that can detect Omicron fairly quickly.   So far,  the following brands have claimed that their PCR testing kits can detect the Omicron variants.

1.  Thermo Fisher Scientific, Abbott, Qiagen, Cue Health and Co-Diagnostics (US)

2.  Roche (Germany)

3.  Acumen (Singapore)

4.  IIT Delhi (India)

FDA said the following PCR test kit will return false-negative results.

Applied DNA Sciences, Meridian Bioscience, and Tide Laboratories 

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Update: 23 December 2021

South Africa is presently having the highest proportion (96%) of Omicron patients in the World.  Its National Institute for Communicable Diseases (NICD) has a daily surveillance report published on this website.    It has a network called "DATCOV-Gen" where studies about Covid hospitalization details are often reported.   One of its most recent studies published in  BMJ,  an internationally renowned medical journal, is shown here.  

The study report concluded that those suffering from Omicron are likely to have lower odds of being admitted to hospitals as compared to non-omicron patients.  The odds ratio (AOR) was estimated to be 0.2 @ 95% confidence interval (CI) 0.1-0.3).    In other words,  those suffering from Omicron would have an 80% lesser chance of being admitted to a hospital for treatment.

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Update: 29 December 2021

The infection rate in Gauteng,  SA has receded by 75% from 630 new cases per mil to about 120 cases per mil.   The hospitalisation rate came down by about 30% and death rates appear to be muted as shown in this chart worked out by Dr. Ridhwaan Suliman