Sunday, May 31, 2009

KL Composite Index Still Strong. More Rooms For The Index To Move Up ?

Frankly if we look at the Malaysia share market, many counters especially the third liners are showing more tiredness in terms of trying to break their recently high created two weeks ago. The blue chips are climbing even higher with the KL Composite making a new high. This time around I believe that many players who have an earlier "Short" position or in the process of "Shorting" the FKLI (KL Composite Futures) would have lost lots of money.

At these moments some even still looking at the KL Composite Index will have a correction. The truth thing is they will happen but when it will happen ? I think this is a million ringgit question because if we all know when the share market is going for a real correction then many of them would have profit it from the FKLI (futures).

Right now I can't really know where our market is heading to ? All I can say is, be a trend follower not a trend predictor. It is quite hard to determine whether current the uptrend is going to end ?

World equity markets especially the Asian region are performing very well with the Japan, Nikkei 225, Hong Kong, Hang Seng Index and the Singapore, Straits Times Index are creating new high. Same as the Malaysia, KL Composite Index also creating new high. It seems that nothing can stop them from moving forward, not even the Swine Flu, Nuclear Test in North Korea or a potential up-coming war in the Korean region. "ASIAN BOLEH"

The KL Composite Index already rebounded nearly to 38.2 % Fibonacci Retracement and the major hurdle will be around 1,067 points to 1,077 points. This will be the next resistance level for the KL Composite Index to cross over but I'm doubt about it as this will be the major hurdle for the KL Composite Index. Any attempt to cross over will depend on how well the KL Composite Index will rebuild their position right at these moments.

Thursday, May 28, 2009

The Share Market Still Needs More Confirmation From Dow Jones ?

I'm back from China. To my surprised when I used the Internet in China, I was shocked. The China's government is doing a very good job in controlling their Internet user. I have tried many places and many times to enter into the "Blogspot" website but it didn't work. During my 8 days in China I cannot update my blog but I still can monitor the movement of the KL Composite Index and the share prices movement.

For me this is the right way on how the China's government controls their users. As we can notice that not everyone were pleased with their own government administration. Like we can see in Malaysia, many of us are against the Najib's government. They can simply condemn the governments and this really jeopardized the country image.

Back to the KL Composite Index. As we can see for the past one week, the so call "Catching a falling knife" didn't materialize. The index climb event stronger with the help from Dow Jones Industrial Average last week. As we can see the KL Composite Index and most of the counters right now are moving in a correction mode or I should call it a consolidation mode. Are they preparing for the next move - up or down ?

It is quite hard to trace where the KL Composite Index likely to go. Last week during my trip in China, I was having a "short" position in FKLI (futures) at 1,013 point and I enjoy when the index went strait down to 994 point. But all the sudden the index make a comeback after three days of profit taking and I have to cover back or "long" at 1,029.50 point. It is unbelievable the way the index moves.

These few days also, my e-mail was flooded with all kind of negative news regarding about the movement of the Dow Jones Industrial Average (DJIA). Some of them even mention that the DJIA is heading to the south and is preparing to go for a pure correction but it didn't happen.

After I have monitor the share market movement and the performance of the world equity markets for the past one week, I have no comments on the world equity market performance as the indexes are breaking new high. They look very positive at these moments. All in all, their movements have to depend on the BIG BOSS performance - DJIA.

Frankly right at these moments, I can't find my confidence level but I still playing along with the trend. The DJIA needs to break the 8600 points and the Double Top in order to have a confirmation uptrend or else it might turn to the other way round. When this article was been prepared, the DJIA stood at 8,444.00 points.

Sunday, May 17, 2009

Sharp Decline For KL Composite Index This Week ?

Well my findings on what I'm really worried about have arrived. This time we can see that the Dow Jones Industrial Average was the main cause that leads the share market to fall. Last Sunday I did posted some of my finding stated that the KL Composite Index will have a crucial week (refer HERE) and the index started to went down to confirm that the current trend was over. The index didn't manage to break the higher level of 1,037.81 points.

As I use to hear that "Trend Will Repeat By Itself" and it really happen according to my finding. It might not be exactly the same but at least the similarity of the chart is very close. (please refer HERE 2007 February chart) Because of this finding, my position for last week trade now stand at zero ..... with no position in equity market at these moments.

Right now we might be asking whether there would be a major correction ? If the major correction really set in, be well prepare and use the technique "CATCHING A FALLING KNIFE". The reward will be huge but we must remember that "TIMING" is very important. If we catch it earlier and the trend still move downwards then we might not seeing any profit at all. Not everyone can catch a falling knife.

One thing for sure from this current uptrend rally, I really learn a few more technique and rules in reading the movement of the KL Composite Index as well :

  1. Always be a trend follower and not a trend predictor
  2. Never try to judge that the share market is going for a correction when the indicators didn't show it at all.
  3. Follow the indicators couple with the performance of the world equity market to lead yourself in making a right decision.
  4. Always lookout for higher high, lower high in terms of the share prices that can confirm that the current trend is still an uptrend.
  5. When the market move, just ride on with it. The sentiment will tell us when to sell when there are lots of weaknesses appear in one week. During that period we still have enough time to unload some of the shares.
No doubt the "first" phase of the uptrend follow exactly the same as the February 2007 chart, we cannot assume or anticipate that the KL Composite is going to experiencing a huge fall. The "second" phase of the current downfall will depend on the world equity market movement especially the Dow Jones Industrial Average. DJIA movement will determine whether our corrections will be completed in few days or weeks.

I will not be around from today onwards as I have to fly to Beijing for my holiday trip over there tonight. But I will try my best to keep everyone update any of my ideas or my finding on the movement of the Malaysia share market.

Saturday, May 16, 2009

Stocks Still Face Deflationary Collapse: Prechter

NEW YORK (Reuters) - Longtime technical analyst Robert Prechter, who forecast the 1987 stock market crash, predicted this week that U.S. equities may plunge to half their lows hit in March as a deflationary depression bites.

Oil and U.S. Treasury bonds are also locked in long term bear markets, while corporate bond prices will plunge precipitously by next year as broad economy, banking system and company earnings sustain more damage from a financial crisis that's akin to the Great Depression, he said.

The U.S. S&P 500 stock index's .SPX rebound by nearly 40 percent since it sagged to a 12-year closing low of 676 points on March 9 is not sustainable, Prechter said in an interview with Reuters.

"It's not the start of a new bull market," said Prechter, chief executive at research company Elliott Wave International in Gainesville, Georgia. "Our models are (showing) right now that it is a much bigger bear market than most people realize, something along the lines of 1929-1932," he told Reuters in a wide ranging interview. "It's a very rare event," he added.

"I think the next leg down will be at least as severe if not more severe than what we just experienced. So you want to stay on the side of safety," he said. As in his 2002 book "Conquer the Crash," which warned of the dangers of a U.S. debt bubble and deflationary depression, Prechter continues to advocate safer cash proxies such as Treasury bills.


Riskier assets such as commodities, corporate bonds, and stocks which are currently anticipating that the severe global economic downturn may be bottoming, are likely to have short lived intense rallies, but within an inexorable long-term decline that may last another seven years, he said. As banks continue to accumulate losses and corporate earnings fall, "the difficulties will probably last through about 2016," he said. "There will be plenty of rallies along the way."

Oil may rally further from current levels just below USD 60 per barrel but the upside will be capped at about USD 80 per barrel as the commodity is locked in a long-term bear market, he said. In July, U.S. crude oil hit a record peak above USD 147 per barrel and was just above USD 57 per barrel around noon on Thursday.

"Deflation is coming, it's going to lead to a depression. We're not at the bottom yet," Prechter said. "I think we are going to have bouts of deflation separated by recoveries." Prechter also painted a bleak picture for commodities like silver and is largely unenthusiastic about gold, believing the precious metal made a major peak when it rose above USD 1,000 last year.

While gold may have already topped at above USD 1,000 an ounce in March 2008, Treasury bond prices are likely to fall in a long term bear market, with huge government debt issuance being the main catalyst. The benchmark U.S. 10-year Treasury note yield, which moves inversely to its price, hit a five-decade low of 2.04 percent in mid-December. "People got very enamored with bonds and very enamored with gold and I don't like to be invested in markets that are over subscribed," Prechter said.

"The Treasury (Department) has taken on so much bad debt" at a time tax receipts are falling, that "there will be a slow, but very steady change in the way people will view the U.S. government," said Prechter. As a result, investors in Treasury notes and bonds will ultimately demand higher yields, he said. The U.S. central bank will not be able to control the government bond market and prevent yields from rising, regardless of how much money the Fed uses to buy Treasuries, he added.

Next year, U.S. corporate bond prices will probably fall below their extreme price lows of December during the market panic of 2008 when investors fled riskier assets, he said. "Corporates in terms of price have the big wave down coming. This has been a prequel," Prechter said. "Many corporations who (now) say we can borrow more money and take more risks: those are the ones who will get in trouble," he said. "Many municipalities will default," he added.

Courtesy of Mr. Jesper Lee (CIMB)

Friday, May 15, 2009

KL Composite Index Corrections Set In. How Long The Corrections ?

Yesterday for the first time our Malaysia share market really show the bearish sign of going down with the index close lower in tandem with the Dow Jones Industrial Average performance. Usually the KL Composite Index will show some early sign that the share market is going to move down when the whole share market especially the third liners, penny shares, the Second Board shares and the Mesdaq shares are moving in the final phase.

Whether we can argue about this statement that the share market is going to move down, we will see for the next few days. Current trend is telling us that the share market is preparing their way for corrections. To know how long the correction would be, it depends whether this correction will be a huge one or not ?

It also will depend on how the world equity market performance with the Dow Jones Industrial Average acting as BIG BOSS. If the KL Composite Index experiencing huge fall then the correction will be over very fast but if the correction move slowly towards south then it will take some time. Just have to wait when time has arrive to determine when the correction will be over ? Or there is no correction at all ?????????? We just have to guest ........ My suggestions : wait for some solid indicators before any decision can be made.

Dow Jones Industrial Average has been moving for almost two months. It would not be surprised if the DJIA is going for a correction at this moment. For almost two month's up cycle movement, a one day correction is not enough to settle the whole matters. We must monitor their movement everyday to determine whether they are really going for correction ?

Maybe they need few more days to correct themselves in order to have a stronger movement or maybe they have just ended their up cycle movement because usually May was a month to sell before the investors or the fund managers go for long holiday in June and July. SUMMER TIME.

Wednesday, May 13, 2009

Dow Jones In Dangerous Zone ?

This morning I have updated the Dow Jones Industrial Average chart, the Nasdaq chart and the S&P 500 chart. Parabolic SAR indicators show sign of selling. So we will be watching how they are going to move tonight.

Based on the futures market data, we will be seeing a negative opening for DJIA. Tomorrow will be crucial for the KL Composite Index if the Dow Jones Industrial Average close lower.

Today the performance and the momentum of the KL Composite Index not really encouraging. The index is showing more sign to go down compare the ability to go up. Maybe the KL Composite Index just needs some stimulus surprised to bring the index for healthy corrections.

Watch Out For Dow Jones Industrial Average Performance !

I have stop for two days for not posting any article here. My intention is to let my readers to survey and analyst the content of the article that I have posted two days ago. Yesterday the KL Composite Index still trying in the last one hour trying to move and close higher but the sentiment is getting weaker and weaker. It is quite dangerous at these moments.

Based on the chart that I have posted, today's trading will be the 43rd days. That would be the same duration of time as previously done during February 2007 up-trend before a major correction set in. Now the question is, what would be the sources that going to bring down our share market and go for a correction ?

A check on the Dow Jones Industrial and the Nasdaq Index are showing more sign of weakness and even the Nasdaq Index already showing sign of selling with the Parabolic SAR call for sell in the last three days. Remember to read this article too "Is It Time to Sell in May and Come Back Another Day?"

Dow Jones Industrial Average this morning closing will determine whether our share market still have enough strength to go on ? But I'm really doubt about it as the indicators telling me something fishy is going to happen to DJIA in these few days. When I wrote this article, the DJIA was down about -40 points. If DJIA manage to close with little losses then it will be alright for a while...

I'm suspecting that the DJIA will bring the whole world equity market down. Just beware for anything that can happen overnight. Who knows ? Take this as a measure to determine whether the world equity market is going to follow DJIA track ?

Sunday, May 10, 2009

This Week Will Be A Crucial Week For KL Composite Index ?

Well today I would like to share what I have really found last two weeks. My statement here will be short and sharp. I will not going to elaborate what is really going to happen in the first place whether the share market will go up or down. Using this research, I hope that it can really guide us and give us a clear picture where our KL Composite Index is heading to.

On your right (Chart 1) was a historical data back in year of 2007. During that time the share market was crazy. The feeling that I have during that time is the same as now. The share market keep on going up until their final week before the share market collapse. During that time all the speculative counters went up two digits gains for 4 or 5 days during the final week.

1) As you can see from the low register at 1,049.83 points (click the chart to enlarge), the KL Composite took about 43 days to complete its trend before collapsing all the way down.

2) During the up-cycle, the index climbs about 235.00 points from the low recorded 1049.83 points to the highest at 1,285.15 points. This 235.oo points upward will act as a measurement to compare to Chart 2 below.

3) Point 1, 2, 3 shows a mild correction and Point 4 shown where the share market have ended its uptrend. During these 43 days of powerful up-cycle the share market take a pause when the share market reacted to world equity markets downturn. During that time the world equity markets have started to move down a bit before experiencing a collapse from the Dow Jones Industrial Average.

On your right (Chart 2) is the latest updated chart for KL Composite Index until 08.05.2009. This time the share market also reacting crazy, unstoppable. We can take Chart 1 and Chart 2 to compare each other and make an assumption where the market would be heading to.

1) As we can see from the low register 836.51 points, the KL Composite Index already moves up about 40 days until Friday close. Based on the calculation, we still have about 3 days to 5 days to complete the cycle based on Chart 1. That means it will be this week 11th May till 15th May 2009.

2) Possible target for the KL Composite Index to reach is around 1,030.00 points to 1,075.00 points. At 1,075.00 points using Fibonacci Retracement, the reading would be at 38.2 %. If we use the low recorded at 836.51 points (Chart 2) and add about 235 points (estimate surge during 2007 Chart 1), we will be getting a reading of about 1,071.00 points (plus, minus 20 points).

3) Point 1, 2, and 3 is to show us that there is a similarity move between the Chart 1 and Chart 2. In order for the share market to take a pause, the KL Composite Index needs to take a break. Right at these moments the world equity markets are booming up which is, it is quite impossible for the KL Composite Index to go down. "Swine Flu" and "Stress Test" were not able to bring down the world equity markets because the world equity markets were in the Bulls run.

But something has happen last Friday. The US Dollar completely broke down, with the US Dollar collapsing to about 82.50. The US Dollar also breaks the 200 days Simple Moving Average which means that the Bears might start to rule over the Dollar. Read this article "Imminent Global Stock Market Crash to Support U.S. Dollar". Dated 9 May, 2009.

Basically it is up to us to make the judgement whether the share market will have the strength to go up this week and another week or so. Maybe the correction is just around the corner but no one know when it will happen.

Current share market movement suggested that we must be a trend follower not a trend preditor. Or else we might be losing out from this biggest run-up opportunity that occur once in a while. Somehow there isn't any bad news to bring down the share market but if the US Dollar still cannot be supported then something might happen to the Dow Jones Industrial Average.

This article is just for my own use and for record purposes only and it cannot be treat or use as an article to determine our buying or selling activities in the share market. What I have found here will be a good picture for us to determine our decision in investing in the share market at these moments.

Friday, May 8, 2009

KL Composite Index Might Going For Correction ?

Watch out for the overall market today. It might turn to Bearish note. The momentum for the overall share market in KL Composite Index are decreasing. It is not a right time to long any of the shares at these moments. The Bears that I have mention will be out anytime from now. Who knows ? I think the bears are going to take over the bulls.

Based on my chart calculation the D-Day will be today or the next day. This is just one of my opinion and it solely based on my research. This cannot be consider as it will be right. (Still stick with my decision few days ago - read HERE).

Sorry about the date of resumption of trading for Ramunia. Ramunia resumption of trading will be this morning Friday. Watch closely whether the share price of Ramunia will go up or go down ? If the prices go down then it will be very bad for the KL Composite Index and overall speculation counters. Sit tight, we might be seeing some special show from Ramunia Holdings Berhad today.

Announcement form Bursa Malaysia Website.

RAMUNIA HOLDINGS BERHAD (“RAMUNIA” or “the Company”)- Receipt of Offer

We refer to the announcement made on 4 May 2009 wherein the Company received an offer letter from Sime Darby Engineering Sdn Bhd (“SDE”), an indirect wholly-owned subsidiary of Sime Darby Berhad, to acquire the business and undertaking (including the assets and liabilities, whether in whole or in part, to be determined following a due diligence inquiry) of Ramunia and its subsidiaries (“Offer”) for a total provisional purchase consideration of RM232.0 million, subject to adjustment under the terms of the Offer.

The Board of Directors of Ramunia (“Board”) wishes to announce that the Board has on even date ACCEPTED the Offer subject to the execution of a definitive sale and purchase agreement (“SPA”), which shall contain the terms and conditions to be mutually agreed between Ramunia and SDE. The SPA is to be executed on or before 21 May 2009 (or such other period as mutually agreed in writing by SDE and Ramunia). A further announcement will be made setting out the salient terms upon the execution of the SPA.

This announcement is dated 7 May 2009.

Thursday, May 7, 2009

The Bears Are Waiting At The Back Stage .... Waiting To Appear ?

Yesterday Bearish signal cancel after the index managed to climb event higher. The Bulls are still in charge and were riding together with some of the blue chips, third liners, a bit of Second Board counters and the most important, the Mesdaq counters also moving. Is the correction is just around the corner ? Most of the cheap shares were moving. People are keep on buying as they don't want to lose or miss out this opportunity to ride on the strong Bulls.

Based on my analysis, I will stay away from the share market for a while as the bulls is quite fears. This morning I will still playing around with my favorite share but maybe for day trade or we call it contra. The Bears are hovering at the back of the stage and waiting for the right time to strike any moment. Maybe sometime around next week.

I will still stick to my decision about my finding on what will happen to the KL Composite Index next week as I don't want to be get caught by this bullish run. There will be a RED light that will signal the Bulls to stop. Trading at these moments are just like gambling your profit money. You will be surprised if all the sudden the Bears come out of no where.

This morning the share market will try to digest some of the bad news from Ramunia listing. It is a good news when someone is taking over the company but it is a bad news when sometime the price that they offer was too low and they were offering it at unreasonable price. Basically the expectation listing price for Ramunia will be down (read HERE).

Wednesday, May 6, 2009

Bearish Sign Appear On KL Compsite Index ?

Bearish sign appear again. This time in Japanese Candlestick terms we call it Bearish Counterattack. We need to monitor closely as the market might be moving for a correction. Just for a pre-caution measure only, any attempt to increase our further buying activities will not be encourage.

Please read the terms for the Bearish Counterattack Patterns.

Market may gap up sharply as it opens but it closes unchanged from the prior session’s close during an uptrend. Such a pattern is called Bearish Counterattack Pattern, which is a pattern that reflects a balance between the bulls and the bears.

Recognition Criteria:

1. Market is characterized by uptrend.
2. We see a long white candlestick in the first day.
3. Then we see a long black candlestick, which has a body that is also higher than the previous trend on the second day.
4. The close of both days is same or almost same.
5. Both of the candlesticks are long but second day candlestick may be shorter than the first.


The Bearish Counterattack Pattern is a "top reversal pattern" suggesting a stall in uptrend. The first candlestick, a long white one, shows that the bullish momentum is going on. The next day opens higher with a gap but then the bears pull prices down to the prior day’s close. So the initial optimism on the second day’s opening now turns into concern of the longs.

Important Factors:

The Bearish Counterattack Pattern is similar to the Bearish Dark Cloud Cover Pattern. The Dark Cloud Cover has the same two-candlestick pattern. The main difference between the two is the fact that the bearish counterattack line does not usually move into the prior session’s white real body. It just gets back to prior session’s close. The Bearish Dark Cloud Cover Pattern’s second line pushes well into the white real body. So the Dark Cloud Cover Pattern is a more important top reversal signal than the Bearish Counterattack Pattern.

A confirmation on third day is required to be sure that the uptrend has reversed. This confirmation may be in the form a black candlestick, a large gap down or a lower close on the third day.

Tuesday, May 5, 2009

We Have One More Week To Plays In KL Composite Index ?

On Sunday night, I have found a huge discovery on the possibility movement of the KL Composite Index. At this moment I’m not going to post any of the discoveries as it will jeopardize the players thinking and strategies on their involvement in the share market right now.

It is just that I think I may have found roughly where the KL Composite would be heading to. As to my expectation form yesterday movement, the KL Composite Index rally from the beginning of the bell and close at its high. The index went up +18.62 point to close higher at 1,009.36 points.

Based on my calculation, this week the share market will move very high and based on the reading that I have, the KL Composite will likely reach at around 1,025.00 to about 1,045 points. Basically this trend will not last long.

Maybe next week we might be seeing some profit taking with the share market start to crash. I don’t how true my reading is but I will show a little bit (see the picture on your right) what would really happen if this finding do take place before I post a clearer picture of it.

I don’t to be negative because yesterday I’m buying quite lots but the reading telling me that we have a week to play before the share market will correct it self or maybe I would to say it is “A CRASH ”. I would like to be a trend follower and not a trend predictor. But sometimes we need to be careful what will happen next ?

At these moments, I couldn’t think of what will be the news that is going to bring the share market down or maybe the share market is just going for a very big correction or the "Stress Tests" reports ? Indicators from the world equity market just started to make some recovery after recently going for a correction and it is heading all the way up. With their indexes recently break through their resistance level, the world equity market are riding on a strong bulls with them.

With the world equity markets so strong, all I could say now is, we just need to follow and ride on the bandwagon until they stop and then get out from the bandwagon when the bandwagon start to ride all the way down from the moutain.

Sunday, May 3, 2009

Will Monday The KL Composite Close Higher Than 996.60 Points ?

These two days I have been attending a course to enhance my skill and knowledge more about trading in the share market. I did gain something from that course. Although I know few of the technical analysis and the candlestick reading, still I need to attend in order to guide me and understand more about certain rules ....

During my first two days attending the course, there were about 30 participants attending the course. Many of us are start asking the same question. What would be the next course for KL Composite Index ? What would happen to Dow Jones Industrial Average next week ? These questions are just like a million ringgit question.

If you got it right then you will be making lots of money but if you get it wrong, then everything will turn out like a burning paper. Frankly no one knows the answer, many of them are using charts and tools to anticipate where would be the next level for the KL Composite Index and DJIA.

In my point of view, Monday will be an important level for the KL Composite Index to decide. If the KL Composite Index manages to close above 996.60 points and making new high, the possibility that the trend will continue is very high. Recently we know that the world equity markets are moving up with an anticipation that the DJIA will perform for the next two days beginning from last Thursday and Friday but it didn't. On charts wise most of the world indexes look quite beautiful with many of them are showing positive sign after going for correction or been consolidated for few weeks.

With this sign, they are showing more sign to move even higher and for the Dow Jones Industrial Average, the Friday closing did bring some jeers as it managed to cross the 8,200 points and close above it. But there is one disadvantage when the DJIA crosses its breakout, the volume traded didn't support the breakout and it is likely that the DJIA might not stand at that level for long.

Next week on Thursday the "Stress Tests" report from the banks will be out and the outcome will definitely not be as good as we can think of. A report that should be announce on coming Monday have been postpone towards next Thursday. A delay in the reports will means that the new is not encouraging. So next week DJIA movement will be limited or we can say that they might be moving into a range trading until Thursday "Stress Tests" report come out.

Friday, May 1, 2009

KL Composite Index Still Bullish.

Well it was a surprised again. The index shot up. This time the index behaviour was very fierce. I didn’t expect it would happen in the way the index shot that fast. It seem that the correction only take about two days only. Can we call it as the correction was over and a new bulls run has just started ?

It is quite hard to understand the index sudden movement as I would like to share my thought about the KL Composite Index movement. Actually the share market should have corrected another few more days before any significant move can be made. What really happen yesterday, the Malaysian share market went so high in tandem with Asian region equity market huge surged.

Many of anticipated that the Dow Jones Industrial Average will perform after the market closed early morning today but it didn’t. Based on the chart wise the world equity markets have take a turn up after been consolidated for about two to three weeks. Will next week will be a good week to accumulate and start a new platform to speculate in the share market ?

Basically this one of the answer that I’m still searching for it ? Based on the world equity market –“ Yes “ we can start to accumulate and speculate but based on the correction that we have gone through it is still not enough. I would not speculate how the movement will be but the sign of the bull is still hovering around. Anything can happen at these moments but the atmosphere now is very bullish.