The US markets are still uncertain as most investors would be waiting patiently for the outcome of tonight's FOMC meeting. Will cut 25 or 50 basis points? If the FED cut too much or don't cut at all, then the markets could tank straight away. If they cut 25 basis points, the market could ease slowly. If they cut 50, then the markets could run up a couple of days before it reverses its course (actually once the dollar starts to depreciate sharply). So, we will all have to wait and see. The dollar index is now trading below the crucial 80.00 pts mark. If it continues to stay below it for the next few weeks, the dollar could tank very soon.
The KLCI has actually started to decline and the close below 1,284 yesterday triggered a sell signal. I have a 'sell' signal on one of my indicator, the 10-MA indicator. Unload now if you have yet to do so.
The STI also had a reversal pattern on its daily chart. The index closed below its opening for the past 4 trading days. This usually shows that the bears are stronger than the bulls. Although prices has yet to fall, get ready for a (possible) plunge soon. Its Stochastics indicators are overbought while its RSI failed to break the 60-pts mark. In bear markets, rallies usually ends when the RSI fails to breach the 60-pts mark. STI actually turned after hitting the 60-pts mark and starting to ease. Are we going to see more downside? Yes, I believe so. Sell now.
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