Sunday, July 27, 2008

World Indexes

Looks like many exchanges are in rebound mode. How many of them will change into a bull market? How many will continue going down? Indicators are still mix.
World Longterm Midterm Shorterm
S&P500 Down Down Neutral (+)
DJI Down Down Down
NasdaqComp Down Down Neutral (+)
Nikkei 225 Down Down Neutral (+)
Kospi Down Down Neutral (+)
SSECI Down Down Neutral (+)
HSI Down Down Neutral (+)
TWII Down Down Neutral (+)
STI Down Down Neutral (+)
SENSEX Down Down Neutral (+)
FTSE Down Down Neutral (+)
DAX Down Down Neutral (+)

Friday, July 25, 2008

Stabilizing ?

Looks like the market has stabilized. The indicators are still mixed. From the daily chart, we could be heading to a dead-cat bounce. I will still wait at the sideline until the weekly signals say up.
Malaysia Longterm Midterm Shorterm
KLCI Down Down Neutral (+)
Finance Down Down Neutral (+)
Construction Down Down Neutral (+)
Plantation Down Down Down
Property Down Down Neutral (+)
Mesdaq Down Down Neutral (+)
2nd Board Down Down Neutral (+)

Anyway, let's have a good laugh with this video.

The serious message is when the crowd is against you, you can either follow them (trend trading) or go against them (contrarian investor). The important is not to run behind the crowd (i.e. you are the last person to follow the trend) or get trampled (catching a failling knife). Theory is easy. Practice is hard. You just got to practice practice practice until you get it right!

Tuesday, July 22, 2008

The Great American Nightmare

When I'm bullish, I'll tend to weight more on bullish articles. Conversely, when I'm bearish, I'll tend to pay more attention to the bearish news. How bad is the American economy, The Great American Nightmare is a good read. Shadow GDP, CPI, unemployment etc. If everything is doom, what can you do? The answer is in the article too.

Happy reading!

Friday, July 18, 2008

Suggestions for Bursa Malaysia

So, Bursa Malaysia's profit is down. What can I say? The market is not conductive for traders. We need to be able to make money when the market goes up or down. You need to implement an environment that encourages traders to be more active. Currently, many of your policies are not. You need to remember, with Internet, traders can trade any market in the world. The only thing stopping us is the time zone. You may ask why do you need to implement policies that favors traders? Because we dare to buy high and sell higher. Because we don't care the fundamental of any stock. We create activities that energize the market. Now, being a trader is not easy. Many of us starts from small. I can see that you and the brokerage industry got too greedy until you have kill the market itself. My suggestions are:
  1. Lower down brokerage fees: We need from small before going to big time. The current fee structure is too expensive for us. You want more fees or no fees at all?
  2. Free end-of-day data: Paying a year of subscription for new timers is too high. If we cannot learn the art of technical analysis, how are we going to trade?
  3. More sector indexes: Currently, there is no sector index for oil and gas, utilities, shipping, banks, brokerage, steel, retail etc. We need these to determine the hot sector for play. And made it free. Currently your FTSE-BM indexes are so hard to get. I have to manually download it from yahoo everyday.
  4. Allow put warrants: Yes, we want to play when the market goes down too. If you are scare of sell down on local stocks, then allow put warrants for foreign stock. What harm can we do on foreign stock?
So, either you innovate or perish. I don't understand how you all do business. So slow in providing new innovation. Do you have all yes man in your company?

Down Down Down

I have made a mistake on the weekly rating for the plantation sector last week. I should have put it as "down". The error was due to my mistake in interpreting the weekly EMA. Anyhow, all major sectors are down now. Where is the rebound? I don't know.
Malaysia Longterm Midterm Shorterm
KLCI Down Down Down
Finance Down Down Down
Construction Down Down Down
Plantation Down Down Down
Property Down Down Down
Mesdaq Down Down Down
2nd Board Down Down Down

Funny Video

Market still going down. Are you stress out? Then have some laugh. I'm sure it can release some of those stress.

Monday, July 14, 2008

Global Bull And Bear Markets

A list of markets around the world. 57% of the countries are in a bear phase.

Saturday, July 12, 2008

Still Bearish

I'm still bearish on KLSE. As the KLCI index indicates that the market was pretty oversold, that is why we had a bounce in the week. However, based on the reading of the charts, it tells me that this is only a dead-cat bounce. KLCI may attempt to reach 1200 but I strongly believe that it will test 1050 soon. The trend is still down. This is because the plantation index has just broken it's first uptrend line (there is another one at around 6600).

Malaysia Longterm Midterm Shorterm
KLCI Down Down Down
Finance Down Down Down
Construction Down Down Down
Plantation Down (-) Neutral Down
Property Down Down Down
Mesdaq Down Down Down
2nd Board Down Down Down

Well, I'm not an economist but this is what I understand based on what is happening in the US and how it will affect the rest of the world:
High oil and the subprime crisis have affected the auto, airline and financial sectors. People are loosing jobs. Consumption has shifted from high end to lower end. Luxury goods are suffering. Whole sale retailer are seeing more businesses due to limited amount of disposable income. High end retailers will be hit and more jobs will be lost. Consumption will shrink again affecting other sectors. Stock market will go down, reducing the people's wealth. So, the vicious cycle become worse. When the Americans, who lives on borrowed money stop consuming, it will hit the rest of the world. Can the Chinese and Indians replaced the reduced demand? Hey, aren't they the one getting more wealthy because of the Americans?

Anyway, look at the bright side. People will get healthier as they must use more human power to get around. Maybe the percentage of overweight people will be reduced as everyone is eating less (me included). We don't need to spend so much on our health care system because less people are getting sick. Hey, experts are even predicting less road accidents due to high oil! Corruption will be wipe out because nobody has anymore money to bribe. Government development will become more efficient as there is less money to waste. Social order will be disrupted at the beginning to flush out the bad things, but at the end of this crisis, we will come out better.

Tuesday, July 08, 2008

The consequence of bottom fish

This is a video of Jim Cramer's flip-flop on bank and homebuilders (property in Malaysian lingo). I guess he thought that he can bottom fish especially the banks. From my experience, a reversal can only be known using long term charts. Daily charts only gives you all sort of noise that makes you flip-flop and all confused.

No trust for oneself?

In this article, a survey was done in the US asset management industry. It is found that 46% of domestic fund manager did not invest at all in the fund that they manage! Ok, maybe the fund that the manage does not fit into their financial plan but why so high percentage? No confident in ones ability? Maybe play other peoples' money is more fun than playing own money. Hmm...I wonder if the same survey is done for Malaysian fund, what will be the percentage? A good thesis for any economics student. Any takers for this research topic?

I have one crazy idea, why don't we have a law that requires any analyst that issue a buy call must in fact buy the stock after the report is published. It is easy to say the word buy, but when your money is involved, do you dare to act on it?

Friday, July 04, 2008

Summer Meltdown

KLCI Yearly Chart

It is summertime in the northern hemisphere. Stock exchange around the world are melting down. Malaysian politics are full of confusion, but there is no confusion in our stock exchange, a break of 1000-1050 will mean a complete meltdown of our stock market! This week, the plantation sector has started to weaken. I thought that can earn some money from plantation counters. No chance now.
Malaysia Longterm Midterm Shorterm
KLCI Down Down Down
Finance Down Down Down
Construction Down Down Down
Plantation Neutral (-) Neutral Down (-)
Property Down Down Down
Mesdaq Down Down Down
2nd Board Down Down Down

Don't listen to analyst that says that it is time to buy because our stocks are cheap. It can go cheaper. We should wait for the analyst to buy first to stabilize the market, then only we follow. As small investor/trader (like me) only has small capital, we can't afford to make mistakes. The objective is not to make the highest return. The objective is to make the surest return.