Saturday, March 14, 2009

Downward Spiral

Looks like everything (stocks and politics) is going into a downward spiral again. Hopefully the recession does not turn into a severe one. The 2nd stimulus package has been announced. From my view, I think it is better not to have one. This is because the money is mostly going to be squandered away. The government will overpay for everything. Most probably the rakyat will be left with crumbs. It is better for the government to give food directly to family in need. Make sure that every poor child do not go hungry. Anyway, since the stimulus lack any other details, it's better for me not to comment too much. I only want to say that my perception of the government is so bad that I don't trust any cabinet minister or those in power.

Looking at KLCI chart, we are on the way of testing 800 and if it breaks, 600 will be the next potential target. The daily chart indicates an oversold condition. A rebound is expected but in a strong directional market, the rebound can be very brief and the oversold condition can persist for a very long time.

KLCI Weekly Chart

Looking at my sector analysis, only the plantation sector that is still holding:
Malaysia Longterm Midterm Shorterm
KLCI Down Down Down
Finance Down Down Down
Construction Down Down Down
Plantation Down Neutral Neutral
Property Down Down Down
Mesdaq Down Down Down
2nd Board Down Down Down

For the rest of the world, almost all experience a strong rebound:
World Longterm Midterm Shorterm
S&P500 Down Down Neutral (+)
DJI Down Down Neutral (+)
NasdaqComp Down Down Neutral (+)
Nikkei 225 Down Down Neutral (+)
Kospi Down Down Neutral (+)
SSECI Down Neutral Neutral
HSI Down Down Neutral (+)
TWII Down Neutral Up
STI Down Down Neutral (+)
SENSEX Down Down Neutral (+)
FTSE Down Down Neutral (+)
DAX Down Down Neutral (+)

Everyone is still looking for a bottom. My chart indicates that another downward test will be coming soon. If this happens, it may effectively bring KLCI under 800. Let is what Mr Market will do.

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