Dow Jones Is Moving Into Negative Zone. KLCI - "Catch A Falling Knife"

Finally the Dow Jones Industrial Average have show its colour. For the past three trading days the Dow Jones have drop more than 1,000 points. From the high created in May, the Dow Jones have drop around 10 percent.

 

It seems that this is just a beginning of a correction or maybe a downtrend. What I really don't like is the Dow Jones index still way below the SMA 200 days. An indicator stated that whether this index is moving downwards in few month to come unless the index manage to stage a comeback and stay above the SMA 200 days. 

 

 

For the FBMKLCI the next target would be 1,526.26 point created on 18/02/2012. Today the index have drop another 30 points this morning (around 1,545 point). At these moments it is very hard to determine where the index is heading to. Last Friday performance, the KLCI managed to pull back from a sharp drop of 20 points in the morning and close just down -2.74 point.

 

It did show some strength as the KLCI is really oversold but the "Ringgit" is experiencing another sharp fall today. Now the ringgit is traded around RM4.24 for 1 USD. Not really a good sign for the KLCI. Anyway we must believe that there is no such thing that the index will be heading straight to the south without gaining some technical rebound.

 

Now is a game of: "Catch A Falling Knife". 

FBMKLCI Got Potential To Rebound?

Judging from the total points the KLCI has drop, technical rebound was just around the corner. From the last peak of 1,730 (05/08/2015) till today the KLCI has drop about 170 points. Based on yesterday closing we still didn't see any technical reversal pattern that is taking place.

 

Today closing will be very important to determine whether the FBMKLCI will have a technical reversal in the making. For the first target of rebound if do happen will be around 1,595 point.

 

Overall market sentiments still bearish. As long as our Prime Minister still managing the country, the economy won't be good and we might have prolong issue concerning the currency.

UMWOG Looks Attractive With Current Price of RM 1.05 - RM 1.10

UMWOG now at it lowest. At the price of RM 1.05 - RM 1.10, it is a good price to enter for a rebound? Since the month of July the price have drop sharply from a around RM 1.70 till RM 1.05 - RM 1.10

 

FBMKLCI has drop more than 100 points in 5 days. There might be a rebound around the corner but "Catching a Falling Knife" is not easy and quite dangerous as well.

 

 

Beware Of The Dow Jones Industrial Average.

Simple Moving Average indicators 20 days, 50 days, 100 days and 200 days are moving very close to each other. An unhealthy sign as its appear that the Dow Jones is weakening. Whether the Dow Jones is moving into a correction or the beginning of a bear market we still have to wait for more signal to define the outcome.

On Malaysia KLCI indicators, the index will have greater chances to move lower due to uncertainties in geo political situation and the value of the ringgit at 17 years low.

Strong support at 1,672 point. A break below 1,672 points will eventually bring the market even lower before a rebound can appear. Basically from weekly indicators, the reading also not very promising. Just be careful.

 

Dow Jones Maybe Heading For Big Correction???

Based on the chart and indicators reading, the Dow Jones Industrial Average might be heading for "Big Correction". After few months of speculation, it seems that the Federal Reserve is going to raise the interest-rate in near term.

 

If we examined the chart the DJIA is creating "Lower High" and "Lower Low". This is really a bad sign and the index also stay below SMA of 20 days, 50 days, 100 days and 200 days. Well prepare for this slaughter. It might be around 10 to 12 percent correction in the process towards 16,300 points (plus minus).

 

What will happen to Malaysia KLCI index? Right now it is a bit hard to know where our index is heading to due to uncertainties geo political situation surrounding the country. With the world oil prices tumbling and also the ringgit, I didn't see any good outcome in the near term.

 

 

Based on the chart if the KLCI managed to cross and stay above 1,736 point, we might have a chance that the index might try to climb towards 1,780 point (200 days SMA) but if we take a closer look, it seems the KLCI is moving side way.

 

With the DJIA showing more weaknesses, we have to be careful because any sharp drop on the Dow Jones, we might see the KLCI will follow through and move towards south.