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.