Happy New Year!!!

Cheers to all!!! Happy New Year and hopefully, 2008 would be a fruitful one!

Market-wise, 2008 should be a good year, at least in the 1st half, based on technical analysis. The US markets (Dow and S&P) and European markets (Dax and FTSE) are forming a 4th wave consolidation triangle. There should be a final 5th wave in the coming weeks, probably in starting the middle of Jan. This should be a very good and tradeable bull rally.

As for Asia, the 5th wave has likely started. The 3rd of the 5th wave is expected to be very bullish. This 3rd would likely coincide with the breakout of the triangles of US and Europe.

So, a strong rally should take place sometime in Jan/Feb... Investors may want to continue to buy on dips... Stay with the uptrend...

Merry Christmas!!

Merry Christmas and Happy Holidays to all!! :)

Tech Stocks - look out for it!!! It appears that the tide is starting to turn. All the subprime issues and recession concerns in the US is starting to have little or no impact on the stock market. The recovery story could be on the way. This could be the start of a new rally into 2008!!

KLCI and STI also has been holding well.. Both support at 1,380 and 3,300 respectively held on very well indeed. Start looking for laggards.. the 1st round of rally is usually led by the blue chips! The the second liners would rally before finally the penny stocks.

The 1st half of 2008 is expected to be very very good!!! BE FOREWARNED!!! :D

Happy Trading into the new year!

Back at work!

Wow... it has been quite a break.. anyway, back to the markets...

The US markets.. hmm.. it fell into place just like what I mentioned back in Nov... It reached the 13,600-13,750 levels before easing. It could now continue to ease to 12,800-12,900, which is the good support for the BULLS. There are 2 scenarios for the Dow and S&P. It seems to be forming a triangle now but a sideways rectangular pattern could also take place. Both are continuation patterns. Hence, the BULL is still intact as long as the Dow stays above the August and Nov lows i.e. 12,500-12,600. Keep a sharp eye on those levels. Last night, the US markets rebounded slightly. Continue to expect a little more downside from here...

STI... is finding some support around current levels, the Nov lows. Indicators still point to lower levels from here.. probably finding its footing around the 3,200 support.. similarly, as long as the index stays above that level, the BULL is still very much alive..

KLCI... 1,380 is the current support level.. should hold here for a couple of days... then it all depends on external factors.. technically, it has yet to see a turnaround sign... so, expect selling pressure to persist for now... however, there are some pretty good looking stocks on the charts... Silver (7136) could run soon.. however, keep a stop at RM0.90 or slightly below.. another stock is MPHB.. stop should be at RM1.95.. Both have more than decent chance of rising in the coming months despite the gloomy immediate outlook for the index.. trade cautiously is still the main idea here...

On a break!

I am going on a break for a couple of weeks. I will try to leave a rough outlook of the markets ahead.

Dow - approx 13,600-13,750 critical resistance level. Chances are, it would likely ease after reaching that level. It could fall back to test 13,000 or lower. This is due to the Dow Theory Sell signal.

STI - could rally straight from here. We could see a decoupling from the US in 2008. But (to be on the conservative side), I would take a same view for now. Meaning that STI could retrace a bit after hitting 3,650-3,700. Only after the retracement is over, then it should rally all the way into 2008.

KLCI - take a similar view. Bullish on the longer term. Pullback after hitting 1,405-1,410. Then it should rally hard into new highs of 1,490-1,560 next into 1Q 2008.

Asean strategy - Buy into dips. Look out for the lower liners coz they are going to be the star this time round!! Remember 1993-1994. :)

Here we go!!!

There was a slight doubt about the BULL when the Dow fell below its 12,845 level and suggested a Dow Theory Sell signal. However, it has rebounded sharp for the past couple of days. Wall St posted the biggest two-day rally in five years, led by financial shares, after Federal
Reserve Vice Chairman Donald Kohn buttressed expectations for another interest rate cut. The Dow rallied 331pts while S&P500 added 40pts. European shares also rallied the most in 4 1/2 years.

Two days ago, I posted that there could be a possible bottom for the STI. And I believe that this rally on Wall St could kick start the new rally in stocks over in Spore. Investors looking for fundamental stock ought to look at the property and construction sector. Stocks like Tat Hong for construction and Hobee, Capitaland, and Wing Tai for property. Sesdaq counters also look attractive now. Alantac is interesting now.

Malaysian stocks to look at - the foreign Call warrants look very attractive. HSI-C1, SInopec-Cs, and CNOOC-C1.. These are looking attractive even though they expire soon. The underlying shares listed in HK looks very interesting too. Hence, any movement in the underlying would probably lead to higher price here in the Call Warrants.

Currrent levels are good levels to get in - trading wise. Buy now..

Selling to end?

The S&P500 could be doing a 3-3-5 flat Corrective Wave 4. I think the selling would likely end soon. Yesterday's fall could be close to the end and the only risk to this count is that volume is not sufficient. In other words, there is no selling climax yesterday. Nevertheless, I am stick to my view that the US market could bottom out soon. Give it a couple or more days. Dow could find support around 12,600 while S&P holding above its LT uptrend support. A break below would likely signal the start of a weaker trend in the short term.

Could STI downfall coming to an end? There is a strong possibility that the low is around the corner. Whenever the RSI fell below its 30 pts mark or in the oversold region, the STI usually found a ST bottom. Could this round be the same? I believe so coz it is also holding above its 62% Fibo levels of 3,322. Maintain buy on weakness.

For KLCI, there is no change in view. It should track regional markets accordingly. Strong support is at 1,340 while resistance is at RM1,365.

Waiting for a turnaround signal

Wall St rebounded on Friday but on relatively low volume. Pls do not read too much into the bounce. I am still waiting for any signs of a turnaround in the US markets. That should lift global markets. (In the immediate term) There could be a possible positive rebound on the US Dollar which could in turn be positive for the US stocks. Again, the Dow looks like a huge sideways formation trading between 12,500 and 14,100. Look for a turnaround the support levels of 12,800-12,845 and 12,500-12,600.

STI held its 62% Fibo level - 3,322 last week. A positive sign. Its RSI is also lingering in the oversold region. On the past 2 occasions, whenever the RSI fell below the 30pts mark, the index actually bottomed out. Could this be a bottom here? I think so. Again, this is only a risk analysis. Buying and selling will depend on your own risk tolerance. I believe that HG Metal looks interesting on the charts. It is now trading at S$0.49. Put a stop at S$0.42.

KLCI could find a bottom with the 100-day SMA (1,340) supporting the index. This level should keep the index afloat for now. Keep a look out on the call warrants. HSI-C1, C2, C3 looks interesting. CNOOC-C1 is also on the rise. Sinopec-C1 is another to look out for. Any rise in the index would see these call warrants rally hard.

To find its feet

Wall St was closed last night on Thanksgiving. Happy Thanksgiving!! Usually, Thanksgiving week, is bullish for equities but definitely not this year. Dow is now below its 12,845 level suggesting that the Dow Theory Sell signal is in. Just becareful. I still believe that a tradable rally is coming but it will probably a rebound in a bigger picture now that the Dow Theory Sell signal is in play.

STI should also find its bottom soon. The 61.8% fibo did not hold either. Possibly giving up all its gains since Aug if the index do not find its feet soon. The low then was 2,962, which is close to its 3,000 psychological support.

KLCI is also looking weak. It is holding just above its 100-day SMA at 1,340. More weakness to follow should this level give way. A wait and see approach is best for now.

The BULL is not dead yet, probably just delayed now that the Dow Theory Sell Signal is in play.

The bull to take a back seat?

The S&P500 gave up all its gains this year after last night's fall. Concerns of losses from mortgage defaults have spread throughout the economy sent stocks on Wall St plunging. American Express fell to its 14 month low after Morgan Stanley recommended investors to sell the stock. The Dow is now below its critical level of 12,840, which could mean the delay in the arrival of the BULL. The Dow Theory Sell signal seems to be in place. The last time it occured in 1999, the Dow fell about 30% from its high. It means that it has a long way to go - down. Nevertheless, if Dow recovers to regain the 12840 this week, then we might avoid this bearish scenario. Keeping the fingers crossed.

STI and KLCI would likely see further selling today on the back of Wall St's plunge. KLCI to find support at 1,340 (100day SMA). If the index stays above the this support, then the Bull upcoming run is still intact. For STI, the 3,322 support needs to hold in order for the BULL to continue in the next couple of weeks. The next support is at 3,180 followed by 3,000. With Dow in such a precarious position, it may be better to cut some losses first before getting in again sometime in the near future. Otherwise, investors could hold on until the end of the week to see if both the supports hold.

Has the bull started?

Well, it is still too early to confirm right now. Dow is still hanging just above the critical 12,845.87 level. I have used the 12,840 level as a last ditch support. Last night, the Wall St rebounded. Dow is now back above the 13,000 level. Nasdaq is likely to have 1 more leg down before it can turnaround. Nevertheless, 2008 is going to be another exceptional year.

For Asian markets, the money would likely flow out of US and into Asian markets be it property or equity. HSI and Shanghai is expected to be the leaders this time round. I have heard stories that HSI could even hit a high of 40,000. That did not surprised me at all as I think it is very much possible. So, get ready for the bull.

STI is also looking bullish in the long run. Though the short term mechanics are starting to show. Yesterday's bullish long white candle is supportive. The rebound from its 61.8% of 3,322 is a very good sign. Continue to accumulate on weakness. I like Broadway Industrial and Midsouth Holdings. Both stocks are looking good fundamentally and technically.

KLCI also fell to its next support at 1,360-1,365 after falling below the 1,380 level. Accmulate between these levels. I see smaller construction companies starting to move. Crest Builder is one, trading a 5x PE. It also broke out of its consolidation pattern. Salcon is also a single digit PE and a breakout could take place soon. According to Bloomberg, analyst has target prices for Salcon at RM1.70-1.80. Faber is also moving.

This week's outlook

According to Bloomberg news, U.S. stocks posted their first weekly gain this month after investors speculated that the worst of Wall Street's mortgage losses have been disclosed and Wal-Mart Stores Inc. boosted its earnings forecast. The S&P 500 added 0.4% this week to 1,458.74. The Dow Jones Industrial Average rose 1% to 13,176.79, and the Nasdaq Composite Index gained 0.4% to 2,637.24.

Homebuilders and banks may face further declines this week. Economists expect reports to show U.S. housing starts fell to a 14-year low in October, signaling the real-estate slump will
continue to weigh on growth. Is this going to be the final leg down before the BULL arrives? Maybe. It all depends on Dow's performance this week. Can it hold its support at 12,840-12,878?

STI is back down to its 50% Fibo support at 3,434. Its 62% Fibo is at 3,322. The strategy for the Spore market is to nibble between these levels. Longer term, I am looking at 4,022 at least.

KLCI should find support around the 1,366-1,380. Similarly, the strategy is to pick up good stocks between these levels. Longer term, I am looking at 1,490.

Magnum (3735) - Privatisation - True or False?

Both Multi-Purpose Holdings (MPHB) and Magnum Corporation (Magnum) replied (in Bursa Malaysia website) that both companies - "constantly review options to increase shareholder value. In pursuit of this objective, MPHB and Magnum will continue to evaluate all opportunities which may be available." - when queried by Bursa over a media report on expectations of Magnum being taken private by MPHB. They also added that an appropriate announcement will be made should there be any definitive corporate development.

Airasia - News 2

In the Star today, AirAsia said the popular period of travel was January and March while the top-selling destinations including Kota Kinabalu, Kuching, Langkawi, Shenzen, Bali and Bangkok.
AirAsia offered 400,000 specially-priced tickets and has successfully led to a surge in bookings. AirAsia-X tickets to the Gold Coast in Australia are also being snapped up. The travel period was fixed from Jan 8 to April 30, but tickets must be booked before Nov 25.

Time for a holiday? Yes, it is good to take a break from the markets once in a while. Come back recharged and I believe is the way to go!! :)

Enjoy your Holidays!!

To test critical level

Wall Street falls for the 2nd day in a row last night after the sharp rebound on Tuesday night. Dow lost another 121pts while the Nasdaq lost 26pts. This 'should' be the final leg down for the Dow. This final leg could send the Dow lower towards the 12,900 level again or slightly lower. Only a break (and close) below 12,840 would signal a (rare) Dow Theory Sell signal which last happened in 1999. If the level is not breached, then there is a very good chance that this downtrend is over. And the bull run should start then, which could rally all the way into 2008. So, be prepared and keep a sharp eye on the 12,840.

STI should continue to find support above the 3,434 level, which is the 50% Fibonacci retracement level, followed by 3,322, its 62% Fibo level. Investors should start to buy between those levels.

For the KLCI, the index continued to find support above the 1,380 level. Yesterday's inside day suggest indecision among investors. However, I believe that the uptrend rally is bout to take place, possibly next week. Investors should start buying whenever the index eases towards the 1,370-1,380 level.

Just keep an eye on the Dow. If Dow breaks the critical level, then my count could be wrong. If Dow holds steady, then I believe that the low is in and a rally could take place next. Having said all that, even if the Dow breaks the critical level, I still believe that the BIG Bull would come, probably delayed by a couple to 6 months. :) So, let'e hope it doesn't.

Same quote:- Do not miss this BULL RUN!!! It is going to be BIG!! Very BIG!!! :)

Dow retraces

Dow fell 76pts after surging 319pts the previous day. Hence a minor correction is not unexpected. Nevertheless, I think there will be a small pullback from here to complete this downtrend, may be another fall to 12,900-13,000 region (or thereabouts). Investors should get ready for the upcoming Bull run. I do not know what is the catalyst for this upcoming bull run, but I believe it is still going to happen. We are in a Major Bull Cycle which is 'expected' to end in 2008/2009. So, there is still room on the upside.

STI should still find support at 3,434-3,500 levels. Investors should buy on dips. Similarly for the KLCI, the 1,370-1,380 would likely be a good level to get in. Do note that Synergy Drive is expected to be listed sometime in Nov (can't quite remember when - could be next week). It will be the largest capitalised stock on Bursa Malaysia. I believe this would likely give the Malaysian market the kick it needs to move on higher above the 1,400 level.

Lower to buy!!

Magnum (3735) - to be sold or privatised?

There is a rumour running in the market that Magnum (3735) is about to be taken private or likely be sold by its parent MPHB (3859) at a selling price of RM3.80. Magnum and MPHB ran up yesterday and is expected to continue to run today. Magnum also recently announced that the company wants to raise RM800mil cash to provide the group and its subsidiaries with additional funds to finance their working capital and for acquisitions.

Based on technical, MPHB looks the better bet. On a fundamental basis, MPHB would also be the likely winner as 'the sale' could boost the coffers of MPHB. MPHB could potentially return the excess cash to shareholders via a special dividend :). Since both analysis 'appears' to favour MPHB, it could be better to look into MPHB. For those who prefer to leverage, pls look into MPHB-WB.

Wall Street rebounds

The US markets rebounded sharply as expected. US stocks climbed the most in 2 months
after Wal-Mart Stores Inc.'s profit beat analysts' estimates and Goldman Sachs Group Inc. said it doesn't plan any significant writedowns on mortgage-related assets. Tech stocks like Apple also surged. Apple led the Nasdaq Composite Index to its biggest gain in four years after China Mobile Ltd. said it's in talks to sell the iPhone in China. Dow surged 319pts while Nasdaq 90.

STI touched its 50% fibonacci retracement at 3,434 yesterday and rebounded. This could be the low for STI. A new rally to new highs is likely to take place very soon.

KLCI support at 1,380 appears to be strong. Bulls seem to be buying strongly whenever the stock fell below the support.

I think these are good levels to get into S'pore and M'sia stocks. Even for the conservative investors. Do not miss this BULL run! It comes only once in a blue moon (well 13-14years to be exact). Happy trading!

Mah Sing (8583) - a new investor?

A consortium of Middle East, a Malaysian blue-chip institutional and individual investors are eyeing a strategic stake in Mah Sing Group, according to Business Times' sources. Partnering with the current major shareholders and management of Mah Sing will likely be the vehicle of choice for the investors' Southeast Asian expansion plans. The deal would likely be different to which Middle East investors recently bought into Putrajaya Perdana and Loh & Loh Corp. With this tie-up of the consortium of investors in Mah Sing (if it comes through), the company's ability to grow further locally, regionally and in the Middle East is set to be very good.

My 2 cents - it should be very positive for Mah Sing if this is true. They could even have a bigger share of the IDR if the potential investors turned out to be the same ones as the ones who plans to invest a big chunk in IDR. Even without that, the group's business has been very good in the past couple of years. It is rumoured that they are close to securing enblock sales of its properties, both commercial and residential.

Dow reaching target

Wall St continued to fall yesterday led by oil and metal producers. Worries that economic growth could slow due to rising oil and commodities prices. Tech stocks such as Google posted the worst 4-day slide in its history. E*Trade tumbled 59% after the company said that its earnings fell short of forecast. Citigroup went as far as saying that the company could go bankrupt. Apple also lost 7%.

Now with Dow close to the 12,900 level, there could be a potential minor rebound in the coming days. Nevertheless, selling pressure is still present in both Dow and Nasdaq. Now, we may have to wait and see if the market eases lower to retest the Aug low. If Dow breaches the Aug low, we could have a Dow Theory Sell signal, which is very rare.

STI's gap support held well. Yesterday's hammer candle is bullish but it needs further confirmation. Maintain a wait and see for the light pocketed investors while deep pocket investors should start to nibble. Gap support 3,470-3,520. Resistance at 3,600 followed by 3,660-3,688.

KLCI is also holding above its last week's support of 1,380. A break (and close) below the support would signal the start of an immediate term downtrend. Note: the longer term outlook is still very bullish. Aggressive investors should start to buy now just above the 1,380 support. Conservative ones should wait a while longer.

Wall St plunges further!

As I mentioned before, the US markets has not bottom and the final wave of selling was ready to kick in. It appears to be happening now. Where is the bottom? I am looking at12,900 levels for the Dow. However, should the index fall below the Aug lows, then we have a Dow Theory Sell signal. So be careful.. For now, stand aside. Wait for clearer signs before jumping in. The bulls should have sharpened their blades by now and just waiting for the right moment.

ST- more downside expected. Could be sharp but is expected to be short. Target 12,900 for now.
LT- Big bull is coming after this consolidation - no matter how sharp it is..

STI could find support at the gap of 3,460-3,520. LT uptrend is still intact.
KLCI to find support at 1,380 again. Looks the strongest among its regional peers.

Nevertheless, buyers in both markets ought to wait. Only investors with deep pockets can start to nibble and average lower should the market continue to fall. Be prepared for the next bull run!! It is going to be a good one but it would likely be the last. The next bull could take place 14yrs down.

"You've been warned!!" :)

Sellers to the fore!!

Wall Street continued on its downward pullback as expected :). This time it was the Nasdaq that fell sharply after outperforming the Dow and S&P in the past month or so. Nasdaq took another day of pummeling after Cisco fell 9.5% due to the fall in demand for its products from its top25 customers. The late nibbling in banking and financial stocks lifted the Dow from its lows. Dow ended 33pts lower while S&P500 was down 0.85pts. Nasdaq lost 1.9%.

STI should continue to ease due to its weakness in Wednesday's closing. The 3,660 support is unlikely to hold out today. The next support is at 3,550 thereabouts.

For the KLCI, Wednesday's strong close is baffling to me. Based on the charts alone, the uptrend is still very much intact. However, I believe weakness in the regional markets will keep a lid on its rise. I think there could be a correction or at least a pullback in line with its regional peers. I am looking to see if the 1,380 support breaks this time round. Upside resistance is at 1,440.

Airasia - News

In the Edge Financial Daily, Malaysia and Singapore are expected to sign a bilateral agreement by end November that will allow AirAsia and Tiger Airways to fly twice daily each between Kuala Lumpur and Singapore, said Malaysia’s Transport Minister.

Good for consumers and Airasia. Bad for MAS or SIA? Not really, coz it is only 2 flights a day - hence minimal impact. But it is a start. Oil prices should also keep a lid on the share price of MAS and SIA as well as Airasia.

Minor rebound to resume

Dow rebounded 117pts to 13,660 while S&P500 added 18 to 1,520. Dow appears to have formed a head & shoulder formation with a neckline at 13,450. A break below this level would definitely increace the chance of the index hitting the targeted 12,900 level.

STI and KLCI shld rebound further today. STI could test 3,700-3,722 level while KLCI could test 1,394-1,400 again. Nevertheless, investors ought to stay vigilant when trading in these volatile markets. Again the plantation and the smaller cappers would do well today.

A little reprieve

Dow recovered last night to end the day at 13,543, down 52pts while the broader S&P500 shed 7pts to 1,502. The Dow fell sharply throughout the day after Citigroup Inc. said it will report as much as $11 billion in additional writedowns. Financial stocks such as securities firms also dropped. Dow 'should' continue to ease to around 12,900 or at least that is what I expect.

STI held the 3,660 support yesterday but KLCI fell below the 1,388 support. However, the Hang Seng is expected to fall further in the coming days. Since HSI has been the leader in the current rise, a fall in HSI would likely affect both market here. It may try to rebound today after 3 days of selldowns. So, both the KLCI and STI could rebound today. Do note that the sellers appears to hv the edge in the short term. I expect more selling to take place in the coming days.

PJ Bumi (7163) - New investor

CIMB wrote based on the news in the Edge Weekly - A Saudi Arabian investor is making an entry into Second Boarder, PJ Bumi, in an exercise that will see the departure of its founder Tan Sri Ahmad Johan. According to sources, the Saudi Arabian company is buying into PJ Bumi to tap its waste and waste-water engineerging expertise, which it hopes to take back to the Middle East.

Technically, the stock is expected to rally further after breaking out of its LT sideways trend last Friday. Leave a stop at RM0.53 and the 6-month target is RM0.92 based on the height of its LT trading band.

Volatile markets ahead

Expect more volatility in the markets this week. Dow lost 97pts on Friday morning before recovering to close up 27pts. The Dow should continue to ease in the coming days this week. I am looking at about 12,900 for the Dow. The usual suspect - financial stocks would likely send the Dow lower as I expect more bad news related to the subprime thingy. The odds a market crash (i.e. a fall of about 10% or more) has increased. So, be careful.

Both the KLCI and STI would likely trade sideways for now until a breakout on either side. However, the onus in on the downside this week. KLCI is expected to trade within 1,388-1,425 while STI to trade between 3,660-3,850. Be careful when trading this week.

Wall St tumbles

Wall St fell sharply after banks fell the most in 5 years. The subprime worries has hit again. The Dow lost 362pts while the S&P500 gave up a hefty 40pts. The fall yesterday erased about $369 billion of market value from the benchmark for the American equities. We should continue to see more downside from here. Having said that, I do not expect a straight line drop but I think it would likely be very volatile. It could swing up another 150pts in between the fall again. (Well, I hope you guys get what I mean). I would likely be a yo-yo market with the larger picture trend is down. 12,900-13,000 could be the target for this downtrend.

KLCI yesterday closed near the low, which for the immediate time frame is bearish. So did the STI. Both could hv actually formed a rounded top but it needs confirmation. KLCI should ease to retest the 1,392 after failing to breach the 1,425 resistance. STI could head back to retest the strong support at 3,660-3,688. The upside resistance for STI is at 3,850.

Dow's outlook stays the same

After looking through the charts, I am still keeping to my call on Dow (see Weds 24 Oct note). We are currently in a wave 5 in a larger Wave C down. There is a possibility of a sharp fall on the Dow as one of my indicator is very bearish. How will it pan out? Wait and see :)

Once this fall is over, the bull should be back. This wave count would likely be wrong if the market continues to rally past its old high of 14,198. This would mean that the bull has already started and this down is a Wave 2 correction rather than Wave C. I feel that the former has a slight edge or a 55:45 ratio.

Will the Asian markets buck this downtrend? It is too early to say but I think it could. The KLCI has been lagging the regional market while the STI has yet to show any negative signs that a top is in. Both indices are still on a ST, MT and LT uptrend.

Today, more profit taking is expected. Nevertheless, the trend still has not change. Stay long but trade cautiously.

CI Holdings (2828) or its warrant (2828WA)

CI Holdings closed at its 4-year high today at RM1.12. This suggest that the stock's buying momentum is strong. I expect more upside from the stock tomorrow. Technically, the stock broke out of its reverse Head & Shoulder neckline resistance yesterday. The reverse H&S has a target of RM1.92. This is a long term target.

CIMB wrote about the stock today - called "Expect a Bubbly start." CIMB expects the stock to post a 67% rise in 1Q earnings year-on-year. If they do that, it would be their 5th consecutive quarterly profits after years of losses. This could be a turnaround story. CIMB has a BUY call with a target of RM1.42 based on a PE of 15x.

KLCI to rally further

KLCI is expected to rally further even after yesterday's gains. The positive close on Wall Street is also another 'positive'. There is a lot of upside potential in the small cappers or penny stocks. M3nergy is one of the stocks to look out for (see later note for more info). Again, I see MKLand (8893) or its warrant coming into play soon. There are signs of accumulation and it is a matter of time before the stock rallies. Also look at MPCorp and GPharos.

STI is also expected to continue to rise to retest its year high of 3,906. The Sesdaq could start to move soon... Look at lower liners like Alantac, Beng Kuang Marine and Health Management Int(HMI).

I may have to relook at the Dow's outlook and wave counts but I have yet to find the time.. Dow could be in Wave 4 corrective wave now. What I have written are only from very short term charts and hence the ST outlook.

Anyway, traders in KL and Spore should be in for a ST bullish time (ST- means a week or 2)
:) Happy trading!

New highs expected

Wall Street positive close last Friday is expected to lift both indices in today's trading. The STI should continue to rise to test its 3,906 high again soon. The KLCI, at its all time high of 1,398, is expected to continue to rise further as the momentum players continue to chase the index higher. KLCI could hit 1,410 soon today. The longer term target for the KLCI is 1,444-1,460. Construction, property and plantation stocks would shine. Lower liners would likely outperform its more mature peers this time round.

Both indices would likely be still affected by what happens on Wall St. Like what I mention last Wednesday, this rebound on the Dow is probably the sideways (or leg up) before 1 more leg downwards within a month or so. Then only the Bull market would likely kick in thereafter...

Dow rebounds but the view remains

Dow rebounded 109pts last night while the S&P500 added13pts to 13,676 and 1,520 respectively. The rebound is still within the range of my wave count. There is likely another leg down in a day or two - this is Wave 3. This is expected to be followed by a few (about 3-4) volatile days or sideways trading - this should form Wave 4. Followed by the last impulsive Wave 5 down to about the 50-62% correction level - 13,150-13,330. Then the Dow would continue to rally into 2008! This is the correction that I roughly expect to pan out. After this correction - the BULL returns!!! :))

STI should also roughly follow in the same lines. I am looking at 3,500-3,660 for the STI. It may be a wide range but I believe that these are good levels to get in - Heavy for the upcoming BULL run. 4,000 should not be a problem for the STI.

KLCI should break above the 1,392 after this correction. 1,392 is a ten year high - meaning that the bull trend is on its way. Correction should end in Oct or Nov. 100-day SMA should hold steady at 1,336. I am starting to 'hear' about a few stocks. I found these 3 stocks attractive, both technically and fundamentally (except for MKLAND) - CRESBLD, BAHVEST and MKLAND. Will write bout these soon.

I have put down the outlook for the next few weeks. I will not be able to update this blog in the next couple of days because I do not have access to the internet. :)

'Trade within your means' - SS

Mini rebound but more downside expected

Wall Street saw a minor recovery led by Apple and tech stocks. Dow closed 44pts higher after dropping 114pts in the morning. The consolidation for Dow is not over, I believe. This is just a minor correction after the previous day's sharp drop. There should be one more leg down based on the wave counts. This consolidation is expected to last until end of the month at least.

STI could rebound along with Wall Street's rebound. The index is expected to hold on to its 3,660 support today but similarly to Dow, I expect anther leg down. KLCI is also expected to rebound today probably to close the gap at 1,370. After that, another test of its 100-day SMA at 1,336.

Dow crashes on 20th Anniversary

Dow crashes on its 20th anniversary of Black Monday. Dow fell 2.6% of 366pts while the broader S&P500 fell almost 40pts. This reversal would likely be swift and maybe 'sharp'. Be prepared for more downside on Monday. On worse case scenario, (If this is wave 2) then it could fall another 1,400 pts back to the Aug low. On the best case scenario, the correction is over (Dow has fallen to its 38.2% Fibonacci retracement) but this is the least likely scenario. How far more, we may have to wait and see.. So refrain from buying just yet... the time will come to buy but not now!!

STI should continue to consolidate after breaking below its 3,780 support. 3500-3550 should be the next strong support. KLCI should also open 20pts lower as suggested by FKLI Futures.. KLCi support is at 1,335, its 100-day SMA. Refrain from buying now!!!

Black Monday - Oct 19, 1987

How can I forget such a date? It is what Wall Street called it exactly 20years ago. Hmm, I was probably still in school somewhere in the suburbs of KL. There are a lot of similarities here and in 1987.. Here is a summary what a famed Strategist wrote in Newsweek International July issue:-

1.1987 - markets has been rising for 5 years from an extended bear market (ended in 1982)
2007 - markets have also rose for 5-6year since dotcom bust
2.1987 - talk of trouble in the US savings and loan industry
2007 - Subprime-mortgage concerns
3.1987 - Speculative bubble in Japan
2007 - Speculative bubble in China??
4.1987 - surging oil prices - then to USD60 per barrel
2007 - surging oil price - now to USD100 per barrel??

Just be aware that - 'History tend to repeat itself'!!! Would Monday see a crash? I don't know but there is a good chance that a correction is coming - could start next Monday

Idaman (1112) - reprimanded by Bursa

Bursa Malaysia publicly reprimanded Idaman Unggul for breach of paragraph 9.16(1)(a) of Bursa Securities Listing Requirements ("LR"). Bursa Securities views the contravention seriously and cautions the company on its responsibility to maintain appropriate standards of corporate responsibility and accountability in order to achieve greater disclosure and transparency to its shareholders and the investing public. (Bursa Malaysia S/B).

oops... not a good news. Still, this stock is a lower to buy.. also see Idaman(1112) -new uptrend has begun. Keep in mind that stop loss must be adhered to... Remember, in these volatile days, it is better to keep risks at a minimum.

Sideways market

Wall Street was rather flat yesterday after Bank of America announced losses of $4bn from trading losses, defaults and loan writedowns. Tech shares kept the indices up. S&P500 was 1pt lower. The US markets would likely be sideways again tonight due to expiration of the options tonight.

STI is trading close to its support of 3,780-3,800. A break below would likely see a new consolidation period for the STI. Chinese S-shares would continue to be in the limelight today.

KLCI is also trading close to its support of 1,365-1,367. Local funds appears to be holding the index by nibbling on some of the key blue chips such as TM and Maybank. Tenaga is still under selling pressure. As predicted, construction stocks saw some profit taking yesterday after their recent strong run. A foreign broker also downgraded Gamuda to a Neutral yesterday. Penny stocks would again dominate - look out for PECD, MPCorp. Both ran already yesterday so be careful.

Personally, I remain a short term bear. I expect a pullback next week. Only after a pullback (depending on how far down - that I do not know yet!!), I would change my ST bearish view. If I am a long term player, I would be buying on the way down.

Idaman (1112) - disposal of insurance arm?

Idaman Unggul (1112) could announce soon (as early as this month) the disposal of its general insurance arm, Tahan Insurance Malaysia and the planned sale of its timber assets. The sale of the timber asset concession could be worth around RM300m, according to a source. (NST)

My 2 cents - could explain the recent surge in volume traded. Should this rumour be true than it would be beneficial to Idaman. Also, technically, the stock is on a new LT uptrend. See Idaman (1112) - new uptrend has begun.

Another down day ahead

Consolidation is expected to continue today in line with the fall on Wall Street. Dow lost another 72pts while S&P500 shed 10pts. For STI, we should be able to see more downside today after yesterday's breakdown from its double inside days. A fall below 3,780-3,800 would likely signal the start of a new ST consolidation. On the other hand, for KLCI, a fall below the 1,365-1,367 level would send the index into a ST pullback towards the 1,334 level. It maybe best to stand aside as the overall market is likely to be weak. Construction stocks which has been rallying for the past week could see some profit taking today. However, there maybe one or 2 penny stocks that would outperform.

Turnaround happening now?

At the point of writing (3.50pm Malaysia/Spore time), the market appears to be turning around. The dreaded reversal is taking place or at least close to happening. The 'trigger' for KLCI and STI are 1,365 and 3,780-3,800. A break below those level at 5.00pm today would likely confirm the ST downtrend has begun. As an investor, I would likely unload most if not all of my share holdings from now till 5.00pm. I would even go as far as 'shorting' if that was possible in the market (that is how bearish I am right now, short term at least).

So, ppl, Raya is over!! Get out now! :)

Be cautious this week

First of all, Selamat Hari Raya to all readers. :)

Ok now, back from the holidays, how would the markets perform? Dow last night fell 108pts on soaring oil prices and also more worries on the bad debt situation. "U.S. stocks fell the most in five weeks after Citigroup Inc. said defaults will plague the financial industry for the rest of the year" - (Bloomberg News). Consumer stocks are also starting to ease as some fund managers believe that the slowdown has just only started and has a way to go.

STI has had a double inside day which suggest indecision. The players do not know exactly where the market is heading. With overbought indicators, investors should move to a more risk-adverse stance on the market. Reduce some of your shareholdings would likely be the best option, I believe.

KLCI, closed yesterday due to the Raya Holidays, is expected to open flat. There might be some selling pressure on the Blues but penny stock would likely be actively traded. I think investors should start reducing some exposure to the market on rallies this week. If the market do not fall this week or next (i.e after neutralising the overbought indicators), investors could then get in again. Trade cautiously for now.

Profit taking on Wall Street

Last night Dow fell another 64pts to 14,015 while the S&P500 lost 8pts to 1,554 after Technology stocks fell. Tech stocks fell after JP Morgan issued a sell recommendation on Baidu.com, China's search engine. Google fell for the 1st time in 5 trading days while Apple lost the most in one month. Technically, Dow looks like it is about to turn downwards. Its MACD is also about to issue a ST sell signal. We may have to wait tonight to see if the sell signal takes place or not.

STI saw an inside day on the charts yesterday - which means that investors are undecided on the direction of the market. Nevertheless, with overbought RSI and Stocastics, I think a short term pullback is on the cards. Probably in the next week.

KLCI is at is 55-day high, which is bullish. However, the selling remains on the TMT. Indicators are still positive but also slightly overbought. The index may try to test the 1,392 level today but i foresee a lot of sellers would be waiting at those levels. Penny stocks saw a comeback yesterday afternoon with Mui Ind and BJ Corp leading the way. I continue to like penny stocks for now but I would continue to trade cautiously due to the overbought market.

It is time to be wary

Oww man... this is the second time that nothing came out...must be my office's internet :(

Dow turned down yesterday, closing 86pts lower. Regional markets should continue to ease a little. Yesterday, there is a bearish engulfing candle on the STI. It is a sign of a possible top for STI. It needs to close below the 3,800 to confirm the change in trend. Otherwise, it could continue to climb.

KLCI continues to climb higher but the big 3 of TMT is still under selling pressure. This could be fund managers are recomposing their portfolios, reducing the TMTs and adding counters like Sime, GHope (for Synergy Drive) and construction counters like Gamuda and IJM. Penny stocks would remain in the limelight but could be under a bit of selling pressure after strong gains lately.

Both the KLCI and STI are in overbought situations and may come under some selling pressure due to profit taking activities. Just be careful when trading as a pullback could take place soon (either this week or next). Besides, just keep in mind that Black Monday took place on October 17th 1987.

Dow at another record

Yesterday, US markets continue to climb into record levels for the second time this month which should be good for the regional markets. In yesterday's FED minutes, investors found comfort that the US economy is NOT heading for a recession. Dow closed 121pts higher to 14,164 while the broader S&P500 added 13pts to 1,565.

STI should hit new highs today with 3,945 the next target. KLCI will try to breach the 1,380 levels first then followed by 1,392 later. Penny stock would likely to be in the limelight. I have highlighted 2 stocks today which saw a bullish breakout on their charts. They are Idaman (1112) and Metacorp (8389). Also keep an eye on MESDAQ counters like YTLE (which also moved yesterday), AIM, Opcom and BAHVEST (but no volume).

Happy Trading!!!

Idaman (1112) - New uptrend has begun

Idaman (1112) seems to have started its MT uptrend. It has to confirm by breaking out above the RM0.40-0.42 level. This stock could double :) . As long as the stock stays above the RM0.24 level, the uptrend should still be intact. So, first target is RM0.40-0.42.

Metacorp (8389) - Hop on!!

Metacorp (8389) rallied strongly in the afternoon session yesterday. It broke out of its 2-month consolidation triangle. I think it is a good time to jump in and join the bandwagon. Stop loss should be just below yesterday's low of RM0.52, maybe at RM0.51. First target is its year high of RM0.705. Should the stock continue to climb, i think it could even hit RM1.00 in the longer run.

Lower liners continue to shine today but...

Dow closed marginally lower but the Nasdaq continue to climb to 5-year highs. Regional markets saw a lot of volatility yesterday. Some profit taking activities coupled with bargain hunting send the HSI swinging wildly yesterday similar to the past 2 trading days. In Msia, the penny stocks continued to be actively traded. In Spore, more penny stocks are starting to see action after a few weeks in the doldrums.

Note of caution: The markets are now overbought. Investors ought to be wary of pullbacks. I believe that there could be a pullback sometime this week. The KLCI is already pulling back while the STI is still flat.

Multi-Con Systems (Spore) - Bullish breakout!!!

Multi-Con Systems also staged a bullish breakout yesterday. Trading volume was very good, suggesting that this breakout is genuine. There is still room on the upside here. Next target should be S$0.32-0.355. Downside risk - put a stop below the breakout level at S$0.24, maybe at S$0.23. Long term outlook looks good too. Something to hold for the longer term if investors choose to do so.

KUB Malaysia (6874) - Also a breakout

KUB also broke out of its triangle yesterday similar to KHSB. The technical readings are roughly the same. So it could rally from here as well. Upside target RM1.10. Stop at RM0.90. The risk/reward is not so good here compared to KHSB but still something to look at.

Kumpulan Hartanah Selangor (6246)

Kumpulan Hartanah Selangor (KHSB) looks like a breakout yesterday. Yesterday there was also a bullish engulfing candle as well. Its indicators looks bullish, suggesting that it could run from here. Resistance is pegged at RM1.20 levels. A break above this resistance would send the stock towards its year high of RM1.32. Stop loss should be put at RM0.94. Those who are willing to risk a bit more - should then put their stops at RM0.86 instead.

Just to note - the market looks a bit toppish. It could turnaround next week.

Penny stocks to shine

Dow was relatively flat yesterday. There were not much action over that side of the Pacific. Regional market should rebound today although i do not think that the rebound would be strong. Nevertheless, I see the smaller counters moving up higher playing catch-up. Look out for penny stocks in Malaysia and Spore.

Silver Bird (7136) - Fight on!!

The fight for control over Silver Bird (7136) continues with Tan Sri Vincent Tan adding more than double his stake. He now owns 14.4% compared to 6.2% last week. What is so attractive in Silver is still unknown to the public (me included). I believe that the MD Dato' Jackson Tan has just found an ally in the battle against Lembaga Tabung Haji. So, whoever wins the battle would likely offer an GO for the stock. There should be more upside for the stock from here. CIMB just upgraded the target price to RM1.00 from RM0.75, based on 2x P/BV.

A change in trend?

Well, it is still too early to tell but the signs are there. Dow ended the day down 79pts while S&P500 was 7pts lower. Tech shares led the fall with Intel and Advanced Micro Devices at the top of the list. Energy stocks also saw some losses. There are market talk about the recent rise on Wall Street were caused by short covering and not actual demand rising. So once short covering has ended, would the market still have the fuel to move on higher? I am begining to doubt my change of heart last week where I changed my bearish view to a bullish one. Things are not what they appear to be. The US markets could still be the Wave-B, which is sometimes referred to as a bull trap or bear trap. Well, in this case, a bull trap.

Both KLCI and STI corrected in the afternoon in line with what happened in Hong Kong. KLCI ended marginally higher for the day but STI ended 39pts lower, about 70pts from its intra-day high. Hong Kong's HSI, saw a swing of 1,600 pts intra-day. The way it ended the day suggest that this could be a buying climax. Is this the end of the Asian bull run? Yes and no. I think this would likely be the top for the next 2 months but for the longer term, the bull run is still very much intact. For now, I would suggest investors to stay cautious and do not take unnecessary risks!

Yes, Surewin, i think your friends are a smart bunch of investors. Just be cautious and keep to your cut loss points.

Dow off high

Most stocks in the US continued to rise despite the Dow closing 40pts lower. 7 stocks rose for every 5 stocks that declined. Financial shares climbed to its highest since July. There's a lot of optimism that the worst is over for the subprime debacle. However, I believe there is still need to be cautious here as the rally to new highs were on low or lower volume (compared to its July highs). The worst is not over yet.

STI opened higher yesterday but ended the day at its day's low. Is this a sign of tiredness? This, I cannot confirm as yet. I believe it is mere profit taking after the strong rally in the past week. Still I see a minor resistance at 3,850.

KLCI is heading towards the 1,392 high again. It could face some resistance here at 1,368 level. A pullback could take place today. Yesterday volume was encouraging but could it be a buying climax? Again, it is still too early to say. Just be vigilant when trading the markets at these volatile times.

AIRB (8516) - takover target?

The stock has risen a tad in the last 3 trading days before yesterday's slight pullback. The stock rose from RM1.00 to its current price of RM1.34. a 34% rise. There is a market rumour that the stock is being bought a by widely known Malaysian businessman, whose businesses include power, port, plantation, property and padi (rice). And do you know what is targeted takeover price? It is thought to be around the RM3.40 mark. That is a whopping 250% higher than the current price. I am a little skeptical bout the target but technically, it still looks good. I would not discount a run to the RM1.50-1.60 level in the coming days.

Malaysian Merchant Marine (7040)

In my humble opining, this stock has potential to rally hard in the coming days. The technical setup is looking good. . A breakout above RM0.57 would likely send the stock higher towards the RM0.67 level next. A test of its year high at RM0.795 cannot be discounted. At RM0.795, represents a 41% upside. Cut loss at RM0.47.

Dow at record high

Dow rallied strongly last night after investors speculated that the worse could be over for banks and other companies hurt by subprime mortgage losses. Dow added 192pts or 1.4% to a record high of 14,087.55 while S&P500 advanced 20pts or 1.3% to 1,547.04. There is a slight divergence between the broad market and the 30-stock Dow. Also, there is a negative divergence growing (since late last week) in the advance/decline ratio. A risk nevertheless..

STI continued to rally yesterday, reaching new all-time highs. Earlier, I was pretty bearish on the STI. Now that it is now about 2% high than its previous high of 3,688, I think the bull is back again at least for now. The broader market is slowly catching up but still lags behind. Also another negative divergence here. STI should continue on its rally today. Property counters would likely continue to lead. After China allowed more funds to flow out of China and into chinese stocks listed in SGX (S-Shares), stock with 'China' in it would likely see further upside from here. China Petrotech, China Sun Bio-chem, Beauty China, China XLX are some of the few that look good on the charts.

Similarly, for the KLCI I was rather bearish. Now that the index is above the 100-day SMA as well as above its 76% Fibo level, I believe that I could be wrong. I now do not see the KLCI falling back to the 1,141 level. If there is a turnaround in the coming weeks, it would likely be only a pullback (less than 10%) rather than a flat out correction (more than 10%). KLCI still lags the regional markets. Can we catch up? With Dow surging to new highs, there is a good chance that KLCI could follow suit.

More rate cuts expected

After new home sales fell 8.3% in August (its worst price plunge since 1970s), the market expects another rate cut in the pipeline. The US market ended at its highest since July. Dow was up 35pts while S&P500 added 6pts. A retest of the 14,000 mark again for the Dow seem likely now.

STI is at its new all time high. Should continue to see more upside today but gains would likely be capped by pre-weekend profit taking activities. Also note that, there is a slight divergence between the STI and the SESALL, the broad-based index for the Spore market.

The KLCI still lags the regional markets. It is now just trading slightly above the 76% Fibonacci retracement. Momentum indicators are starting to improving further. Yesterday's volume was decent enough to start a run. Could test 1,340-1,345 today. Also note, similar to Spore, the KLCI and FBM Emas index diverge slightly. However, the divergence is not as clear cut as Spore's.

Overall, I am not too convinced that the bull has started again but I could be wrong. It appears the index is approaching or already at its critical level. It the market continue to hold steady at current levels or higher, there is a very good chance that I am wrong in my forecast. I still expect the market to correct again, at least to about the 1,200 level.. BUT... only time will tell...

Strong close on Wall Street

Dow surged 99.5pts to end at 13,878 while S&P500 added 8pts to close at 1525. Wall Street was boosted by rumours that billionaire Warren Buffet is keen on taking up a stake in Bear Stearns. Is this the BIG one? I think not or I believe that this is not the BIGgie... The market breath is still weak and has formed a negative divergence. How much more upside? Only the market can tell... :)

STI and KLCI should continue to test their recent highs. STI to test 3,688 while KLCI to test 100-day SMA at 1,333. Happy Trading ppl but remain cautious!!

Another flat & boring day ahead!

Markets in the US were mostly flat yesterday. Dow was up 19pts while S&P500 lost 0.5pts. European markets were mostly lower though. Today's markets would likely be lacklustre as there are still no leads to lift the markets. STI should be slightly higher today possibly testing the 3,688 levels while KLCI would be testing the 1,320 level again.

Yawn!! Better go watch Chelsea play! Hahaha...

Silver Bird (7136) - Flying high

There seems to be new substantial shareholders every other day. Lembaga Tabung Haji (LTH) raised its stake to 21.6% after buying 4m Silver Bird (7136) shares on 17-19 Sep. Meanwhile, Sydney-based CVC Ltd emerged as a substantial shareholder in Silver Bird on 13 Sep with 12.8% folllowing a private placement and open-market purchases. Silver Bird's current substantial shareholders are LTH (21.6%), Dato' Tan Han Kook (19.1%), CVC (12.8%), Perkasa Normandy (9.3%) and Tan Sri Vincent Tan (6.2%). CVC and Perkasa Normandy are JV partners. Something is brewing here but I do not know what. CIMB reckons that LTH or anyone else could take it private at 1.5x P/BV at RM0.75.

Technically, the stock looks very interesting. The stock has broken out of its LT bullish wedge pattern. This is a very good signal that the stock has bottomed out and is now ready to rally higher over the course of a few months. Investors may want to buy nearer to the breakout level of RM0.475. In fact, anywhere close to the psychological RM0.50 is a good level to accumulate.

May have hit a wall

Wall Street retreated slightly last night as financials led the markets lower. Dow ended 61pts lower lower while S&P500 lost 8pts. Why would I say that the market may have hit a wall? Using the Gartley Pattern of correction, the Dow is poised for a correction soon. Is it really coming? I think so.

What about the rest of the markets especially the KLCI and STI? KLCI is starting to cover the gap at 1,316-1,320. There is still a minor chance that it can cover the 1,324-1,332 gap. But investors ought to sell into strength rather than buy (even though the sentiment feels bullish). STI is also the same. 3,688 is just a stone throw away. It may surpass it slightly to 3,700 but do not take it a buy signal yet. Right now, it may be best to stand aside and watch the market.

Close but not yet...

Well, US markets continue to climb higher above the 13,800 level. We could see the index retest the 14,000 level again this week. Do not be too bullish right now as the Dow approaches the 14,000 level again. It needs to break the 14,015 with strong volume before we can confirm that the August low was the end of Wave-4. Right now, trade with caution.

STI is expected to retest the 3,688 levels again. A break above the high with strong volume would likely suggest that Wave-5 is in progress. As for the KLCI, it looks a tad weaker. There are lots of resistance ahead - gap resistance at 1,316-1,320 and 1,324-1,332. The 100-day MA at 1,334 also would likely prove to be a critical resistance. A break above the 100-day MA, then I would likely change my negative view on the KLCI. For now, trade cautiously ppl.

Two days away from the computer

Wow!! 2 days being away from the computer and see what happened to the markets!! :)
The FED cut 50 basis points and global markets rallied strongly. Like I mentioned in my previous note, we may have to see if the dollar tanks. If the dollar tanks, then US markets may undergo a sharp correction. As of now, the US dollar has only eased a little since the cut. Investors may have to track the dollar carefully. For now, the US markets are expected to stay range-bound as funds digest the 50 basis points cut. For the Dow, a break to a new all time high suggest that this correction could be over. Howwever, it is still possible for its to break below the 12517 level. So, keep a look out for 14,021 and 12,517 for the Dow.

Regional market are expected to stay bouyant for another week at least. The momentum indicators are still buoyant. STI could possibly retest the old high 3,688 but some weakness is starting to show. KLCI looks positive for now (my indicators have turned positive again, suggesting to close out shorts) but it has lagged its counter parts across the region. So, I reckon the KLCI is just playing catch up. Upside strong resistance is at 1,330-1,335. Only after a break above the 1,335, I would then change my view from being bearish to bullish. Otherwise, I am still a bear, at least for the short-to-medium term.

Why am I still a bear? There is a lot of differences between the Feb correction and the current one. The most important issue is that the volume on this current 'rally' has been a lot weaker. Volume is the fuel for the bullish train. Without volume, the upward journey would not last. And besides, LT indicators have yet to turn bullish. I believe that the correction is not over. Only 2 weeks of correction after a rally of about 4.7years - very unlikely. So, be prepared for more downside volatility.

US Markets still uncertain

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.

US rallies summore

The US markets continues to rally last night. Dow added 133 to 13,424 while S&P500 added 12pts to 1,483. This was on the back of Countrywide Financial Corp. secured new credit lines and investors speculated that financing for businesses and takeovers is becoming more available. If so, then this wave-b up could possibly be an extended one. However, for Dow, this wave-b should not rally past 13,700. If it does, then my preferred count is incorrect. The alternative count is that the downtrend corrective Wave 4 is over and it could be on its way to a new uptrend Wave 5 is already underway. Until then, I still think that wave 4 correction is far from over.

KLCI has been lacklustre for the past couple of days. I expect it to remain so as there is a lack of catalyst to give it a kick in the @$$. However, for the STI, bullish sentiments are slowly coming back especially in the property counters. The index still needs to beat the 3,517 and 3,545 level before it can get out of this bearish woods. KLCI needs to beat 1,300 and 1,332 for it to turn bullish again. Until then, sell out and stay out!!

Cut or Don't Cut

Why am I saying that the Fed is in a dilemma? Come Sept18, the market expects the Fed to cut rates by 25 basis points with 2 more rate cuts thereafter. Now the big question - what if the Fed DO NOT cut rates? Simple - the market would likely fall sharply. If they cut rates by 25 or 50 basis points (within market expectations), chances are, the market would likely fall too but at a slower rate. Why? Buy on rumour, sell on fact! The markets have been rallying on expectations of a rate cut. I expect profit taking to set in should the Fed cut 25 or 50 basis pts of the rates.

So, where is the dilemma? The US Dollar!!! Fed cuts rates by more than 50basis, the US Dollar will plunge. The US dollar is starting to weaken against other major currencies as I write this mini piece. Would the Fed want a weak dollar when it is printing so much money. High debts would then become higher debts!!!

How does it affect the stock market? If the US dollar weakens, would fund managers wanna hold US stocks? In Euro terms, these stocks would be worth much less if US dollar depreciates. As US dollar weakens, then Fund managers would likely move the fund to other regions like Europe or Asia. Weak dollar drives away foreign investments. What would the Fed do next? Cut or Don't Cut?

Calm before the storm

There was little action over in the US. The Dow was a mere 16pts lower while S&P500 was unchanged. Everyone seems to be waiting for the FED to show their hand. Although expectations are for a 25basis pts cut in rates next week and another in October, I believe that it could all be priced in already. Unless, the FED does the unthinkable and cut rates by 50 basis pts or more, I do not see the stock markets rallying from here.

For KLCI and STI, what can I say? Another dull day ahead unless markets are worried by the quakes in Sumatra (yesterday) and Jakarta(this morning). I am not sure if there is a quake in Jakarta but some of my colleagues over there has decided to take cover after feeling the windows tremble.

I also received a Tsunami warning last night to stay away from beaches but was later withdrawn. I guess there will be no sun tanners on the beach today, huh? :)

Wall Street regains some of its losses

Dow surged 181pts while S&P500 was up almost 20pts. Both indices regained some of its losses since Sept 4. The Dow is now trading just below its 61.8% Fibonacci levels. If my wave count is correct, then the upside would likely be limited from here and it should start to turn downwards from here. I may have to revised my counts should Dow rallies to close another 50-80pts higher. For now, I am sticking to my call that Wave-C down leg has indeed begun and it should continue lower from here.

For KLCI, it could continue to stay range bound between 1,280-1,300 today even though it may open higher due to Dow. Spore's STI is still rising but the upside would likely be capped too. I do not expect it to breach 3,517 and 3,545. If it does, then I may need to revised the wave count for STI. Right now, maintain the sell on strength strategy.

More consolidation in store

There were little change over the pacific yesterday. The US markets closed relatively flat as investors still adjusting their portfolios after the scare over the state of the US economy. Semicon stocks helped keep the indices afloat after Intel increased revenue forecast from $9bn to $9.6bn. Dow ended 14pts higher while S&P500 lost 1.85pts.

KLCI and STI is expected to be rangebound today. Sell if u have not sold. Otherwise, stay away for this week at least :).

Summary of budget goodies

The Budget announced last Friday was good especially for the stocks and the economy. It was not really an election budget per se. Some of the goodies are:-

1. 1% corporated tax cut for 2009 to 25% is good for the market.
2. Lower transaction cost for internet trading - (cheaper trades and more convenient)
3. More broking licences to attract the middle east funds
4. Property - to allow monthly withdrawal from the EPF account for housing

The budget could help boost the Malaysian stock market but with the US suffering a scare in labour payrolls, I really doubt there is any upside left.

Tighten your seat belts!!

US Payrolls were down 4,000 but main street economists were expecting a rise of about 110,000. Wall Street had been awaiting the report all week as it sought to determine how well the economy was holding up under the weight of a faltering housing market, a rise in mortgage defaults and tightening availability of credit. That is a huge difference and Wall Street are saying that US economy could go into recession now. The talk on the Street is that FED could even cut rates before the scheduled Sep 18 FED meeting. Dow was 249pts lower while S&P500 lost 25pts. As I mentioned before last Thursday, Wave-C could have started. And now, it has indeed taking place. With the anniversary of the Sept 11 looming, volatility is also expected to be very high this week.

KLCI and STI should see strong selling from today onwards. Sell, Sell, Sell is still the way to go for both of these markets. Those who have sold their shareholdings up to last week would likely be laughing to the bank :) or at least would likely loose less. Stay away from the markets would be the best option for this week. Tighten your seat belts!!!

Goodies for potential property buyers

In the Star today, the newspaper reported that the budget could have goodies for the potential property buyers. A home for every Malaysian - that will be the main agenda for Budget 2008 that will be unveiled by the PM Datuk Seri Abdullah Ahmad Badawi at the Dewan Rakyat today.
A home-financing scheme is expected to be announced to allow wider house ownership. It is regarded as the Government's commitment to ease the housing burden of Malaysians, especially for the lower and middle-income groups. The home-financing scheme could possibly be made through monthly deductions through the EPF. There could be further cuts in stamp duties as well, which made up a substantial amount of expenses for buyers.

My 2 cents - These are real goodies especially for those who are potential first-time buyers (like me!! :) ). The move to allow deduction from EPF bodes well with the buyers as well as the developers. If it turns into reality, then property counters would see a boost in their coffers for the long run. Note that property counters for the past week have been rising steadily. I guess, long term players could start accumulating on weakness.

Budget day for Malaysia

With Dow climbing slightly last night, the KLCI is expected to open stronger today. However, there is still a possibility that there could be selling in the afternoon when the Budget 08 is being read. Today's range is expexted to between 1,2,88-1,305. Penny stocks would remain in play today but trade cautiously. The STI could also be range-bound today. Still the upside is not expected to be great. Capped at the 3,517-3,545 level.

The start of wave-C?

Wall Street fell after more concerns on the housing slump in the US. Dow fell 143pts while S&P500 lost 17pts. Both the indices turned when they hit their 61.8% Fibonacci retracements. If my wave count is right, which is wave-c is equal to 0.618x of wave-a, then this corrective wave-B is now over. Wave-C would likely have just started.

S&P500 hit a high of 1,496 (1,499 is 0.618x of the difference of 1,370 and 1,479) and then turned. 1,485 is the 61.8% Fibonacci retracement. A break below the 1,450-1,455 level would confirm that wave-C is on the way.

How bout the KLCI? KLCI also hit 1,296.44, its 61.8% Fibonacci retracement, yesterday. Like I mentioned before, the KLCI's upside would likely capped at 1,332 or its 0.618x its wave-a. 1,333 is also its 76.4% Fibonacci retracement. KLCI needs to break below 1,277 to confirm its downtrend has begun.

STI surpassed its 61.8% Fibonacci at 2,411. Its 76.4% is at 3,517. Still, the upside would likely be capped around the 3,545 level (also its 0.618x of wave-a).

Could this be the start of a new downtrend (Wave-C)? We will have to wait and see. :)

Another kicker today!

Dow Jones continued where it left off on Friday after the Labour celebrations. Dow closed 91pts higher while S&P500 added 15pts. So, this would be another kicker for both the indices today.

As I mentioned on Monday, this week could be an 'up' week. However, the upside would likely be capped. For KLCI, I am looking at about 1,332 as the cap. On the other side of the border, the STI would likely be capped around the 3,545 level. I am a believer that there is going to be another wave-C down. This wave-C has potential to be as bad as 1987. It may still be best to unload on rallies.

Note: It is starting to 'feel' bullish again. There are many 'positive' reports coming out of the main street. Signs of a bull trap (wave-B)? I believe so.

This week's strategy is...

With Wall Street closing higher on Friday, the markets around this region is expected to post more upside today. Dow closed 119pts higher while S&P500 jumped 16pts.

The KLCI would likely opened with a gap, possibly hitting the 1,300 level. Upside would be limited to the 1,332 level, its 0.618x of wave-a. As for the STI, it could rally to test 3,545, also its 0.618x of wave-a. This run would likely complete the corrective wave-B. Do note that, wave-B are usually a 'bull trap'. The whole market sentiment would likely be 'bullish' but the matter of fact is the smart money are unloading their stocks. We would wanna be on the 'smart' money's side. Hence, the strategy is still the same as last week's. Sell on strength.

Still corrective Wave-B

Wall Street rebounbed sharply after technology stocks such as Intel, Oracle and Dell surged after Seagate, the world's largest maker of hard-disk drives, boosted its profit and revenue forecast. Apple also rallied on speculation it will start selling new versions of the iPod soon. Dow rose 247pts while S&P500 added 31pts or 2.2%. Tech-heavy Nasdaq saw its biggest rally in a year, adding 63pts or 2.5%.

What does this means for both the STI and KLCI? Well, it means that I was wrong to judge yesterday's fall would be the start of a wave-C down. Instead, it is still in its corrective B-wave that could last for another week or 2. The KLCI could range trade between 1,250 and 1,300 while the STI could range trade between 3,200-3,450.

I am still a believer that there is a C-wave will take place soon. I also believe that it is only AFTER this C-wave that the market can rally again into 2008-09. So ppl, be wary of this 'rally' as B-waves are usually bull traps. Maintaining the sell on strength strategy.

Financials lead US stocks lower

Last night decline on Wall Street erased all of last week's gains. The Dow lost 280pts while the S&P500 shed 2.4% or 34pts. 487 of 500 counters on the S&P fell last night, led by the financial stocks such as Lehman Brothers, Citigroup and Bear Stearns Cos after Merrill Lynch & Co 'downgraded' from 'buy' to 'neutral'.

SELL - has been the call for last month or so.. with the exception of last week, where there were opportunities for a short trading buy. This week is no different. On Monday (Aug 20), I mentioned that the rebound could last 2-3weeks max. The 2-weeks period is up. Again, I said that the upside would be limited 2 days ago. Investors who sold on strength would be the one laughing to the bank. At least for the portfolio, there is nothing there but cash!

Both indices are now sitting at the top of a rollercoaster ride and the fall is coming. The fall is going to be quick and swift. KLCI - a fall could see it retest the 1,141 low followed by 1,100 while STI could even test a low of 2,700-2,760. Unload now and stand aside.

Wall Street falls on glut of unsold homes

Wall Street fell after a report showed the glut of unsold homes rose to a 16-year high for July. Dow fell 57pts while S&P 500 lost 13pts. Financial stocks continued to be the hit as analysts in the US continued to downgrade the banking stocks. It is feared that the mortgage defaults may hurt the earnings of the banks.

With most of the banks in both Spore and Malaysia coming clean on their 'involvement' in the US mortgage market, at least investors here can breathe a sigh of relief. Nevertheless, this 'plague' has yet to hit the Asian shores, and I believe that it may hit it sooner or later. It would likely have some kind of an impact but I do not know what yet. Will keep a keen eye on any signs.

For the indices today, we see minor consolidation on both the STI and KLCI. STI would likely trade between 3,350-3,440 while KLCI to trade between 1,268-1,285.

A bit more upside

Currently 2007 and Oct 1987 - Black Monday
Source: Bloomberg

With Wall Street's follow through rebound last Friday, we expect regional markets to see more upside today. However, I expect both the KLCI and STI's upside to be capped. KLCI's 61.8% Fibonacci at 1,297 is expected to keep a lid on any rise. I see sellers waiting to pounce around those levels. As for STI, I believe that the 3,404 or its 62% Fibonacci level should cap gains.

Looking ahead, I still see a sharp correction ahead. This correction could even be worse than the previous one we just endured. Remember Oct 1987? See the resemblance? The Dow is 'currently' on its rebound just before Black Monday! If the Dow trades in a similar pattern as Oct 1987, then this rebound could end in about 2 trading days!! History to repeat itself here 20 years later in 2007? Only time will tell...

Limited room on the upside

Wall Street was flat last night. Dow closed unchanged while the Nasdaq fell 11pts. Dow and the S&P 500 is trading close to its 50% Fibo retracement. A kick up to the 62% (1,484) for the S&P is not impossible but the upside is about 1.5%. Hence the limited upside compared to the risk of a reversal. It is time to be cautious again as we wait for the c-wave to kick in. Be prepared for another fall soon.

The KLCI and STI is not expected to buck the global trend. Similarly, for the KLCI, I am expecting today to be a generally dull day. Well, I see little upside for the index. A test of 1297 (62% Fibo) is also likely, but I expect more of a sideways trend between 1,272 and 1,288. I would be getting out of the stocks (at today's closing price) that I bought for the portfolio yesterday.

For STI, it was a touch and go for the index. It surpassed its 62% Fibo yesterday but reversed right after to close below it. Expect more of a sideways trend as well for the STI today. Range is likely between 3,340 and 3,410. Taking out both the stocks that I bought for the portfolio yesterday.

Time to shop

I believe that today could be a good day to get in. With Wall Street being flat, it looks like the Wave counts point to an a-b-c corrective wave. On my count, Wall Street is on its b-wave up before a major c-wave down. It is similar for the STI and KLCI.

What am I going to buy today? Hmm.. For Malaysia, I am going to add Timedotcom (5031) at RM0.98 and KUB (6874) at RM0.85 to the portfolio. Add 20,000 shares for each. Gonna a stop for Timedotcom at RM0.90 and RM0.80 for KUB.

For Singapore, I am going to add 5,000 shares of Hong Leong Asia at S$2.94 and 8,000 shares of Ho Bee Investments at S$1.82. Putting a stop at S$2.80 for HL Asia and S$1.75 for Ho Bee.

A slight pullback

I am expecting a slight pullback in both the STI and KLCI today after yesterday's steep rebound. Nevertheless, I think the rebound still has legs and could last up to the next 5-10 days.

Looking further, I believe that there is still room on the downside. The indices still needs to consolidate to rebuild lost momentum. So, be wary in September!!

Fed cuts rates!

FED cut rates last Friday and it caused a rebound on the US markets. Asian markets should mimic the price movement of the US markets today.

Asian markets posted a hammer candle last Friday, which suggest that the indices could rebound today. KLCI is expected to rebound to 1,234-1,267 while STI is expected to rebound to 3,280-3,400.

Is it time to buy? Yes, but only for the short term. Look for stocks that has been badly bashed down. Err, which stock hasn't? :) I am looking at MRCB (1651) and Land & General (L&G).
In Spore, I think the property counters could rebound. I like Armstrong and Beyonics.

For the portfolio, I am not going to do anything as I think we may have missed this rebound.
For those intending to buy, it is best to keep it short as the rebound is expected to be short term in nature. The rebound could last for 2-3 weeks max. So get in fast and get out even faster!!!

More downside to come

Working in these 'gloomy' days are still as exciting as it was during the 'brighter/bullish' days. It would be an act of god for anyone to predict where the bottom is going to be. I can give you a number today and the next minute the indices is already testing/hitting that number. KLCI = 1,200, that's where we are now. STI = 3,100, that's where we are too... so what now?

Working on a longer term chart, I find that my ex-boss' view could be right. Are we heading towards the 1,100 levels for the KLCI? Are we heading to 2,750-2,800 levels for STI? At the rate the markets are falling, everything could end in a month's time. :)

Time to buy again? Yes, but not today.

It is feeling like a crash, doesn't it?

Wall Street continues to be plagued by the concern of the worsening subprime market. S&P gave back all of its gains for the year while Dow is about to give it all back. Need I say more here?

While I was chatting with my ex-boss yesterday, he painted me a gloomy picture for the weeks ahead. His outlook for the STI and KLCI is a lot lower than what I thought it would be. And the worse think was I think he could be right. He is looking at STI falling to about 2,750 while KLCI falling to about 1,070-1,130. Later, I managed to run through some of my charts. The targets that he gave is indeed very 'possible'. Right now, I would continue to hold on to my targets at 3,100 for STI and 1,200 for KLCI.

So, people stay away from the market!!!

Wave 3 - to feel like a crash

Wall Street's slump continued as last night Dow lost another 207pts. Dow has fallen about 7% from its peak. Dow should continue to ease to the H&S target of 12,400 first but wave 3 could take it down to even 12,000. So be prepared for more downside.

STI and KLCI has also fallen about 10% or 7% respectively from their peaks. The downtrend is expected to continue. KLCI = 1,200 and STI = 3,100. So, maintain sell on strength.

Transmile - News

In the Starbiz today - there was a big block of Transmile shares that changed hands at RM12.90 each in an off-market married deal last Friday. It appears to have been an internal transaction conducted by its major shareholder, Pos Malaysia. The deal involved Pos Malaysia & Services Holdings Bhd (PSH) transferring its shares to Pos Malaysia Bhd (PMB) as part of the group's restructuring that involves a capital repayment and transfer of PSH's listing status to PMB.

My 2 cents - those who chased the stock yesterday could be 'p*$$*#g' in their pants now. There could be some profit taking today, and it may even fall back to where it started. My take, stay away from the stock for now. After the 'fraud' debacle, it would take ages to regain investors/funds' trust in management.

Minor rebound to continue today

STI and KLCI would likely continue on their rebound as Wall Street was flat last night. Stocks (with Fundamentals) that have been beaten down could see a stronger rebound. Nevertheless, the longer term trend is still down. Sell on rebounds is still the best trading option in my opinion. Well, there is a better 'general' option = take a holiday :).

Wave 2 - a Sideways

Wall Street rebounded strongly at the close after opening more than 1.5% lower. That may have been the temporary bottom for the US markets. Now I am looking a flat Wave 2. With wave 3 to kick in later, it is still best to sell on rebound. STI and KLCI should be able to rebound as well as both markets are holding above their strong support. STI needs to hold above the 3,300 support while KLCI needs to hold above the 1,285 levels. Maintain sell on strength strategy for now.

Kaboom!!!

Buyers had been warned repeatedly!!! Stay with the bears for now or take a holiday! Dow fell a whopping 387pts. Europe fell about 2% each. Needless to say, the Asian market will tumble today as well. This drop is only the beginning of a very deep fall in global markets. The fear is spreading and the selling is expected to accelerate this time round.

Just remember that fear is a much stronger emotion than greed. So markets tend to fall a lot faster compared to when it is climbing. It is just like rock climbing - it is a hard and difficult climb upwards to the peak but the time taken on the way down, it is almost always be a lot shorter.

KLCI & STI - bubbye for now!! If the 1,285 gives way, the KLCI would likely head back to 1,197 (its 38% Fibo). The 200-day SMA at 1,225 may offer little support. STI should see 3,100 (its 38% Fibo) next should 3,300 gives way!

Dow is now close to its 62% Fibo

Wall Street continued to rebound after FED left rates unchanged. However, I believe that this rebound is about to come to an end very soon. For Dow, it has rebounded closed its 62% Fibo at 13,678. There is also a possibility that Dow could surpass the 62% to the 76% at 13,807. Hence, I expect the Dow to rebound to between 13,678 and 13,807 before it turns down again. Buyers beware!!!

As for the KLCI, the rebound could stop close to 1,327 level, its 38% Fibo. It may be still best for investors to stay out to the market a for a bit. If investors want to do 'something', it is still best to SELL into strength. DO NOT BUY at this moment. It is time for a vacation.

STI is slightly better. It could rebound to 50% which is at 3,481 or where the support turned resistance is. Still best to sell into strength.

Wall Street rebounded

Wall Street rebounded strongly last night. Without a shadow of a doubt, the markets in Asia would rebound as well. Nevertheless, investors ought to take caution when chasing the market upwards as this would likely be a REBOUND only. This is a market for traders and not for investors. Investors should continue to unload their shares as the market rebounds.

KLCI - it failed to test the 1,275-1,285 support yesterday. With Wall Street rebounding, the KLCI should also tag along for the ride. I see resistance around the 1,325-1,334 level.

STI - Tested its 3,300-3,330 support yesterday. Should rebound from its support today. Most of its stock are currently trading just above their 200-day SMAs. The selling would start again as soon as the buyers are exhausted. It is also best to sell on strength here.

Bears are in charge

Wall Street crashed again last Friday. Dow and S&P rebounded to the 38% Fibo mark before the bears hit the sell button again. It looks like there is no respite there just yet.

As for KLCI and STI, expect more downside for today and tomorrow. I see strong support for KLCI at 1275-1285. There is a chance that it may even fall to 1,200 (38% Fibo) but we may have to see if the 1,275 support holds or not.

For STI, the strong support is now at 3,300-3,330. Should it head back to its 38% Fibo, then it could fall to 3,100.

Refrain from buying just yet. Funds with deep pocket could start nibbling but for retailers it maybe best to stay away for now. Take a holiday and come back in a few weeks :)

Airasia - News

In the Business Times, AirAsia will soon start refunding passengers for delayed flights. The airline hopes to implement this within the next two months. AirAsia also requested for low-cost terminals to be set up in Kuching and Penang. On top of that, Airasia also hopes to be able to start a second flight to Shenzen by October given the overwhelming demand.

My 2 cents - They should have started the 'refund' since they begun operations. The delays has been one of the main, if not the main 'nuisance' to its customers. This move should improve their credibility among its customers and potential customers. With half of Visit Malaysia 2007 (VM2007) already passed us by, their business has been brisk. This should be a good year for Airasia this year and next. A lot of brokers has been 'selling' Airasia as a buy these days. And I think there is still room on the upside for its share price. I definitely do not expect it to shoot up straight away in these market conditions but well, it should in the next 12 months or so.

East Coast Corridor - News

In the Business Times today, the govt announced that the East Coast Corridor's master plan is expected to be announced by year end. The plan will cover Kelantan, Terengganu and Pahang. Some stocks that will benefit - MTD Cap, MTD Infra and EPIC comes to mind.

Does this mean that election would be next year? haha... just my 2 cents

Markets would try to rebound again

Again, the markets around Asia would try to rebound, tagging along with the rebound on the Dow overnight. Like yesterday, I think the the Dow has rebounded about 38% Fibo and a another leg down would ensue soon. KLCI would retest 1,350 while STI would retest the 3,480. The markets are heading towards more consolidation over the next few weeks at least. There will be tonnes of opportunities once the market stabilises. There is no need to rush in to buy right now.

Get ready for more volatility

Yesterday we saw the regional markets take a beating as the bears charge in. There is a good chance that it may not be the end just yet. Today we may see a rebound due to Dow's positive upturn last night. Dow would likely rebound to 13,450-13,550 range before easing again. KLCI could retest the 1,350 levels again while STI could retest the 3,480-3,500 level again.

As for the portfolios, I am not doing anything right now until the market settles. For now, keep cash :)

Gap closed

The STI has closed its gap and has a very good chance that it would continue on its fall to retest the 3,480 support. The KLCI almost closed the gap (it only reached 1,374 yesterday while the gap resistance was at 1,376). With indicators still looking bearish, it is sufficient to say that it would likely ease back to retest the 1,350 support. Adding to the bearish tone is the fall on Wall Street. Stocks that has risen quite a bit in the past couple of days should see profit taking. Investors ought to take profits and stay out of the market for now.

Bulls to fight back but...

Today, we should see the bulls continue to fight back after the bulls had the upper hand yesterday. Wall Street rebounded but European markets were flat. The bull is expected to dominate proceedings in the next couple of days. Nevertheless, the bear lurks around the corner. I expect selling pressure to persist and capping any rise. Investors should continue to unload on rallies as I foresee a bleak 2-3 months at least.

Here is one of the reasons why I feel this bull market is coming to a temporary end (2-3months consolidation). In Malaysia, the stocks that ran the earliest such as Gamuda (5398), SP Setia(8664) and Tenaga(5347) are under a lot of pressure for the past couple of weeks. On the other hand, property stocks in Singapore have already made a reversal. So, with the leaders coming under pressure, it is only a matter of time before the rest could follow suit. Buyers beware!!

As for Jaks (4723), I could have made a lot more if I held on. But with the overall market turning sour, in the end, I believe it could still turn out to a good move.

Further correction is likely

After Friday's 208pts fall on the Dow, we expect regional indices to follow suit this week. There is a chance of a rebound taking place either today or tomorrow as intra-day indicators are severely oversold. Nevertheless, the rebound is not expected to be very strong and I expect further selling pressure to set in later in the week. Any rebound right now is a chance to take profits. Investors should not take on any more risks at this point in time and in fact, he or she should be reducing it to the minimum.

As for my portfolios, I am going to continue to keep cash right now. Buying is no-no right now.

It is the end... for now

Gl0bal markets plunged last night due to concern of the subprime market in the US and a slowdown in takeovers (due to credit tightening). Dow fell 311pts. FTSE 100 fell the most in 4-years. Brazil, Argentina, Turkey, Sweden and Mexico fell more than 3% each. Is this the start of a new downtrend? The answer is yes and no. :)

Yes - in the short term. I am looking at a correction of at least 10% and for at least 2-3 months. This would provide a good platform for the markets to rally into 2008. That is your 'no' answer. The Bull train is not 'dead'.. it just temporarily needs servicing. :)

Fortunately, for the portfolios, I have closed out all position and am now only holding cash. For those who intend to ride this correction out - please try NOT to. Sell it first as there is always a good chance for you to buy back the stocks at a lower level.

Is this the beginning of the end?

Regional markets are taking a beating as I write this... well, not really a beating but most of them are currently 1-2% down for the day. It all happened right after lunch time... Hmmm, wonder whats happening? Nevertheless, technically, I have already cautioned earlier that a sudden fall could take place soon. If Wall St falls further in the next few days, I think we can kiss this bullish uptrend goodbye for now. I expect a consolidation of about 2-5months. From then on, the bull would continue its way higher into 2008, even 2009 if we are lucky. Take profits now ppl!!!!

Singapore Portfolio - update

What can I say? It is disappointing to say the least. I have closed out all the positions based on yesterday's closing prices.

For today, similar to the KLCI, the STI could rebound slightly in line with the rebound on Wall Street. I will be looking to get in again should the index closes above the 3,650-3,665 level again.

Malaysian Portfolio - update

Like I said earlier, I am closing out all of my positions. Regional markets fell too after Wall Streets sharp fall. With Wall Street rebounding slightly yesterday, the KLCI could rebound too.

Nevertheless, the lower liners seems to be holding on well, ignoring what's happening in the external markets.

If the index breaks the 1,390 again, that would be the signal to get in again. For now, I am going to stand aside.

Time to keep cash - 100% cash

After yesterday's sharp fall, Dow Jones would likely have confirmed the start of its downtrend. Dow Jones fell 226pts to its 4-month low of 13,716 while Nasdaq lost 50pts last night to 2,639. European markets also fell sharply last night.

The KLCI closed at its all time high yesterday. However, we have cautioned investors about a sudden reversal yesterday as well. I am going to cut all position today as I do not believe that Asia can buck the global trend.

I am also going to take whatever losses for the Singapore stocks today. Am going to keep cash until the time is right to get in again... :(

A market for trading

I believe this market is for trading and trading only. We are almost at the end of this current rally as even the smallest and 'almost unheard of' stocks are also rallying. This was the case (for the Malaysian market) in the 2004 rally as well as the 2000 rally. Stocks in Spore are also potraying similar characteristics.

Both markets are also showing similar chart patterns. KLCI is trying hard to break out of its 1,390 while STI is trying to break 3,650. The breakout should happen this week. The breakout would likely be the last leg up for this round. We should see a stronger and longer consolidation thereafter. So people, be vigilant!!! :)

Another volatile week ahead

It looks like another volatile week for both the KLCI and STI. I expect Wall St to be cautious as the mortgage worries still lingers. I believe that a sudden drop is coming soon in the US. As whether Asia can weather this fall is still to be seen. So, just be wary that there is a strong possibility that the fall could take place soon. Be warn!!!!

The fear of a sharp falling taking place soon was one of the reasons that I decided to unload most of the stocks in the portfolios. Will be taking a more cautious approach in the coming weeks. Most of the stocks added would likely be trading buys.

Singapore Portfolio - update

Similarly, we unloaded quite a fair bit of stocks in the portfolio. The portfolio is still down which is rather disappointing. Still, there is room for improvement.

Malaysian Portfolio - update

I have added MK Land (8893) and Jaks (4723) as new stocks in the portfolio for trading purposes. We closed out quite a 'few' position last week. Will have to see how well they will perform this week.

Jaks Resources (4723)

Jaks (4723) also consolidated a long while now and it is starting to move again. I believe it is time to get in again. Buying 20,000 shares of Jaks(4723) at RM0.83 and put a stop at RM0.75. Its target is its old high of RM0.945 or higher.

MK Land (8893)

Think I am going into this stock as it has consolidated for a long while since it rallied in May/June. I am going to buy 12,000 shares of MK Land (8893) at RM1.10 for the Malaysian portfolio. Stop is RM0.94. Looking at its old high of about RM1.50 as a target.

Singapore Portfolio - update

There is little to be happy about the Singaporean portfolio. The portfolio lost about 2.4% overall. I need to really brush up on the Singapore market. The portfolio saw losses with the largest coming from Hi-P where our Stop Loss was hit.

Like I said earlier, this is now a trading market. Buy and holds have to be put aside for now. Will try to look for trading buys from now on.