KL Composite Index Has Rebounded. Next Stage ?

Well I have learnt something new on the movement of our KL Composite Index couple with the shares prices movement. The index has rebounded in a very nice way. Frankly I never saw this kind of situation where by the share move up for 4 days until Friday since the rebound started exactly on Tuesday evening.

Well this time around I wasn't able to catch The Falling Knife because I'm expecting the share prices to go down some more on Wednesday but it didn't happen. When the Dow Jones Industrial Average was down about -200 points on Tuesday, I was a bit hesitating whether the share market is going to rebound. Maybe I have made a mistake in terms of my calculation.

This time around if we take a look on the way the share market rebounded on Tuesday and Wednesday, the market movement was a bit slow if we want to compare it on Thursday and Friday movement. If I want to compare it to previous trend of sharp downturn, the movement and the momentum is totally different. Previously the share market rebounded very fast, they can went up with double digits gains but this time around they are moving in a slow momentum.

So now the share markets have already rebounded, it is time for us to sell for those who have brought the shares few days ago? We might be seeing some profit taking activities ahead after the share market have rebounded for 4 days. The next course of the market movement will likely to follow with the awaiting announcement from our Prime Minister aka Finance Minister, Datuk Seri Najib Tun Razak next week on our stimulus economic news.

Micheal Joseph Jackson. 1958 - 2009

Michael Joseph Jackson. "King of Pop" August 29, 1958 – June 25, 2009

Catching A Falling " KNIFE "

The clock has start ticking. It is time to watch when the share market is going to rebound. For sure this week we might be seeing a huge rebound occur on the KL Composite Index. It will not happen today (23.06.2009), it might happen maybe towards end of this week.

As we can see, whether we can make a huge return by applying a technique that we use to call - Catch A Falling Knife or Never Catch A Falling Knife ? It is not an easy task to predict where the low would be but it is not difficult also to spot when the market is going to rebound.

Basically the share market has fallen for quite some days with UEMLand still leading the way to bring the entire market went down with them. Even though in the morning session at one time the index manage to climb up from -17 points to -7 points because of the stronger close at Hang Seng Index (up about 450 points for morning session) still the index went down -13.53 point at 1,045.97 points when the share market close yesterday after the Hang Seng went down in the evening.

Right now I'm still monitoring where the bottom would be perform. It might happen in these few days. A careful approach is needed in order to gain at maximum or else if we buy it too early then we might not have an opportunity to make a huge gain but if we buy it too late then we might losing the opportunity that will not always appear every year.

More Selling Pressure Ahead On Speculation Counters ?

This week will be an exciting week to look at. We might be seeing some sharp drop in share prices if everything goes accordingly. The KL Composite Index still look strong enough but whether the index still can sustain the next week selling activities, it would be another question.

Most of the indicators are showing more bearish sign with the world equities market also showing bearish sign. Keep an eye on how the Dow Jones Industrial Average will react these few days because their movements will determine the next course of the world markets are heading to.

With more selling pressure from our market leader UEMLand, it is quite impossible for most of the speculation counters to maintain at their current level. If the selling activities of UEMLand still continue then we might be seeing more selling pressure on overall shares prices especially those speculation counters like Jaks, Mulpha, Ecm, Mrcb, Tebrau, Scomi, Kinsteel and etc..........

KL Composite Index Breaks The UPPER Trendlines.

KL Composite Index already break its UPPER Trendlines. A breakout from Diagonal Triangle. So be careful how to trade cautiously in this few days. Today the market performance were not good at all. More selling than buying, so maybe a big correction has arrived. Just be careful.

I was not around today because I was in Manado, North Sulawesi, Indonesia for 3 days 2 nights.

Updated at 4.15 am. Dow Jones Industrial Average and the world equities markets are not performing well. They seems to be heading south pole rather than north pole. If the world equity market performance are bad then it will harm the local KL Composite Index.

If I'm not wrong, my advice right now is to use the best strategies - stay out from the share market at these moments. Wait until there is a confirmation that the share market is stabilize. Let the share market adjusting its correction before any attempt to accumulate but one thing for sure that the DJIA still play an important role to determine where the world equities markets are heading to.

Dow Jones Industrial Average Crucial. BEWARE.

Looking at the share market movement, it had been quite sometimes we didn't saw such a panic selling during the last one hour of trade. Whether this would be profit taking or correction, it is quite hard to determine because today only the first day the share prices start to decline severely. As we can see, the share markets are long overdue for correction and judging from the Asian equity performance yesterday, it seems that they are really moving into correction mode.

I use to follow every comment from the share market blogger, it is getting lesser and lesser that people are commenting that the share markets are heading for correction. Actually it is a good sign when most of the blogger turn to bullish mode or positive feeling. Than only the share markets can started to come down.

When everyone was bearish the share markets would turn to bullish. Right now I have zero position in the share market. (no more shares in my hand). Waiting for opportunity to collect at lower prices before any rebounds set in.

As we can see that, this time around the share prices fall were totally different from previous falls. Previously the share prices drop slowly bit by bit but this time around the share prices retreat very fast just in the last hour of trading before the market closed. Based on the chart wise, many counters were closed with very negative or bearish candlestick patterns. Can we say that the correction had arrived?

But one thing I really don't understand why our KL Composite Index didn't perform accordingly. Most of the time the index didn't show the true picture of the overall market performance if we want to compare with Singapore - Straits Times Industrial or the Hong Kong - Hang Seng Index. This is one of the bad things when our index always supported during the final minutes.

Dow Jones performance look very tricky and the index performance show more weaknesses rather than strength. When this article been prepared the Dow Jones Industrial Average was down -200 points at 8,599 points. It has been so long we never saw that the DJIA down more than 200 points.

Maybe the time has arrived for pure correction. We must wait and see whether DJIA can maintain the 8,600 points level. It is very important for the DJIA to close with small losses or else it would turn to very negative picture for the world equity market.

WHO: Swine Flu Pandemic Has Begun, 1st In 41 Years

WHO (World Health Organization) raise the pandemic warning level from phase 5 to 6 for H1N1 virus— its highest alert — after holding an emergency meeting with its flu experts.

Whether this will be the threat to the current on going Bull market, we must monitor how the share market is going to react with the latest development. This is quite a serious case as the flu already reaching 74 countries who had reported 28,774 cases of swine flu, including 144 deaths but it seems that this flu is not really alarming to people health compare to SARS. Still can find some medical for treatment.

I was wondering whether this new level of warning will shake the world market performance at these moments. Current world equities market performance are still in the bull run and any bad news will bring more harm to the share market as the current world equities market are due for pure correction.

But this would also depend whether this H1N1 would have any impact on the Dow Jones Industrial Average in these few days of trading. Right now the DJIA performance still look healthy but if we check for the last three trading days, more signs of a tired market are illustrated in the 3 consecutive daily stars in the Dow, whereby the closing prices were 5-10 pts away from their opening price on Friday, Monday and Tuesday.

Such sign of indecision occurring at the top of a +35% market suggest increased vulnerability to a retreat. Wednesday's trading session is already providing the negative confirmation after such protracted indecision making in equities. That was happened on Wednesday, so we need to monitor for DJIA Thursday closing. No matter how the Dow Jones is going to perform, as long as the index manage to climb higher, chances that the current world equities markets will survive for a while.

When this article was posted the DJIA was up +110 points at 8,849 points.

KL COMPOSITE INDEX Still Stay Inside The Diagonal Triangle.

Bravo to the KL Composite Index. The index closed at 1,082.97, UP 11.18 points. No doubt the index is still creating new high but the index still stay inside the Diagonal Triangle Patterns. It means that even the KL Composite Index making a new high but the index is still not out from the danger zone yet.

At these moments the sentiments still look very good, a careful approach need to be implemented as the KL Composite Index is moving towards 1,100 barriers. Yesterday there were so many counter posted some handsome gains and some even posted darling gains.

The sentiment right now look very strong with no indication that the market is heading for correction in near terms or maybe there will be no correction at all? Maybe some profit taking. If we really take a look at the chart, the index is moving in a tight range. I really have no idea whether the share market still have enough strength to move on after they keep on pushing the index higher and higher.

Right now we must be well prepare and watch closely how the Dow Jones Industrial Average is going to perform in order to keep the world equity market going up or sustainable. If the Dow Jones breaks the 8,600 points then it would be a BYE-BYE for the world equity market.

When this article was posted the DJIA was down about -65 point at 8,698 points.

KL Composite Index - Diagonal Triangle Patterns ?

Well I have tried to play in this share market but it is not easy to make some good profit in this share market. The gap of profit was so thin. If you are not careful enough, you might even turn to a loss. So right now we must try to excess what would really happen to the KL Composite Index.

Based on the chart, we need to be very cautious. It seems that the KL Composite Index is performing a Diagonal Triangle Patterns. In order to cancel this pattern, the KL Composite Index need to go higher or it might go the other way round. As we can see many analysts in Malaysia have called that the Malaysia share market is already overbought and it is overdue for correction but it didn't happen since the bull started to take charge in March. Maybe the time has arrive ................. ? At these moments we don't know yet whether the time has arrive as the sentiment still look good.

Based on the world equity market performance until Tuesday closing (09.06.2009), it seems that the corrections have started. But I'm not sure whether it would be a correction or it is just a profit taking. The Straits Times Index (Singapore) and the Hang Seng Index (Hong Kong) have taken a pause these few days and the Dow Jones Industrial Average still look manageable if the index still able to stay above 8,600 points.

Here are some of the detail about Diagonal Triangle Patterns.

A diagonal triangle is a motive pattern yet not an impulse, as it has one or two corrective characteristics. Diagonal triangles substitute for impulses at specific locations in the wave structure. As with impulses, no reactionary subwave fully retraces the preceding actionary subwave, and the third subwave is never the shortest.

However, diagonal triangles are the only five-wave structures in the direction of the main trend within which wave four almost always moves into the price territory of (i.e., overlaps) wave one. On rare occasions, a diagonal triangle may end in a truncation, although in our experience such truncations occur only by the slimmest of margins.

Ending Diagonal

An ending diagonal is a special type of wave that occurs primarily in the fifth wave position at times when the preceding move has gone "too far too fast," as Elliott put it. A very small percentage of ending diagonals appear in the C wave position of A-B-C formations. In double or triple threes, they appear only as the final "C" wave. In all cases, they are found at the termination points of larger patterns, indicating exhaustion of the larger movement.

Ending diagonals take a wedge shape within two converging lines, with each subwave, including waves 1, 3 and 5, subdividing into a "three," which is otherwise a corrective wave phenomenon. The ending diagonal is illustrated at above diagram shown in its typical position in larger impulse waves.

Can The KL Composite Index Still Perform ?

A Fibonacci Retracement of 38.2% has taken its toll. The KL Composite Index as been expected has taken a mild correction. Whether this will be a mild correction, it would depend on how the KL Composite Index reacts to the world equity performance especially the Hang Seng Index or the Dow Jones Industrial Average. Judge from the futures (FKLI) index performance yesterday, we might seeing some correction ahead.

If we take a look at some of the speculation counters, they look more tiring if we want to compare to the overall market performance. No doubt they still can perform but many of them can’t even break their previously high recorded few weeks back. Maybe the share market just needs to take a break.

Yesterday some of Asian equity markets close with few bad indicators according to Candlestick reading. So it is very important to monitor it closely as we can see lately most of the Asian equity market are moving just like rocket especially the Hong Kong equity market and the Singapore equity market. Most of their share prices already reaching their last year prices (August/September 2008) before the global financial crisis strike.

So from my point of view, I would rather say that the overall Asian equity markets have little space to move on or maybe they have just ended their rally? At these moments it is quite hard to determine whether the share market rally is over or not because the Dow Jones Industrial Average still have more rooms to move on. As long the DJIA didn’t break the 8,600 points level, the overall Asian equity market might be heading for some corrections.

KL Composite Index Touches Its Critical Level. Any Correction ?

Well this morning the index touches the major resistance level. The index touches the 1,072.07 points, so it is advisable to monitor closely whether the index have the capabilities to build it strength to cross over that level (1,067 points to 1,077 points). Maybe the index will be hovering around a little bit low from that level then trying to build it base before any attempt to move higher.

This will be a crucial time as the index already went up about 38 %. The market will not likely to fall drastically or tumble because the sentiment was very strong. A small correction was likely to happen after the index run up for so many days. But you will never know what would happen to this market after yesterday our BIG BOSS - the Dow Jones Industrial Average break its resistance level of 8,600 points.

Right now we need to monitor closely as our KL Composite Index reaches its hurdle. It maybe good or it maybe bad as well. But base on the current trend and the share prices, it is still look very healthy.