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Saturday, June 26, 2010

World Market Weekly Summary

US housing market is starting to continue its downward trajectory. How much fantasy value can the banks keep up with? Next in line will be China and Australia's housing market. If they bust, the government will try to bailout the banks again. No wonder the precious metal sector is hot. Are you in this sector?

World Monthly Weekly Daily
S&P500 Up Down Down (-)
DJI Up Down Down (-)
NasdaqComp Up Down Down (-)
Nikkei 225 Down Down Down (-)
Kospi Up Up Up
SSECI Down Down Down
HSI Down Neutral (+) Up (+)
TWII Neutral Down Neutral
STI Up Neutral (+) Up (+)
JKSE Up Up Up
SENSEX Up Up Up
AORD Down Down Neutral
NZX50 Down Down Down (-)
FTSE Neutral (-) Down Down (-)
DAX Up Up Neutral (-)
RTSI Up Down Neutral
Bovespa Up Neutral (+) Neutral

Bursa Malaysia Weekly Summary

KLCI Daily Chart

Impressive window dressing! Daily chart suggests that it will go down towards 1300. I suspect that this is the end of the road for KLCI before we start the next leg down. Let's see what happens when the correction sets in.

Malaysia Monthly Weekly Daily
FBM KLCI Up Up (+) Up (+)
Finance Up Up (+) Up (+)
Construction Up Up Up
Plantation Up Neutral (+) Neutral
Property Up Neutral (+) Up (+)

Wednesday, June 23, 2010

International Reserves of BNM

Date MYR (billion) USD (billion)
31-May-10 312.2 95.5
15-Jun-10 314.3 96.1

Source.

Tuesday, June 22, 2010

Fear the Boom and Bust

How about a 6 minute music video about economic theories? Hayek vs Keynes in Fear the Boom and Bust.

The Yuan Trap

Be careful what you wish for. American politicians are complaining that the Chinese government suppression of the Yuan is making Chinese exports more competitive.

When the Chinese government issues a statement that they will allow the Yuan to float, markets around the world rallies in the expectation that the Chinese will buy more due to cheaper imports, therefore, the rest of the world can sell more and save their own economies.

However, something else may happen instead. You see, the Chinese government has been buying the US Treasuries to suppressed the value of the Yuan (i.e. USD that goes in through import is cycled back or exported by buying Treasuries). If the government allows the Yuan to appreciated, that means the Chinese government do not need to buy as many Treasuries as they did last time. This means that the Treasuries may drop (i.e. interest rate goes up). Up to a certain point, higher interest rate will hit the home loans in US. When home buyers defaults, bank losses increases. Less lending will result. Business contracts, more retrencement will occur. No jobs means less consumption. US government will collect less tax. Therefore, more Treasuries will be sold which will suppressed the price (since China is not buying that much). This may be the death spiral that will plunge the whole world into a depression.

So, be careful what you wish for.

Monday, June 21, 2010

World Market Weekly Summary

Markets around the world continue to rebound except Shanghai. Shanghai is still facing pressure to go down. I thought that the Chinese is expected to save the world. But their stock market doesn't indicate so.

World Monthly Weekly Daily
S&P500 Up Down Neutral
DJI Up Down Neutral
NasdaqComp Up Down Neutral
Nikkei 225 Down Down Neutral (+)
Kospi Up Up (+) Up (+)
SSECI Down Down Down (-)
HSI Down Down Neutral
TWII Neutral Down Neutral
STI Up Down Neutral
JKSE Up Up Up (+)
SENSEX Up Up (+) Up (+)
AORD Down Down Neutral
NZX50 Down Down Neutral (+)
FTSE Up (+) Down Neutral
DAX Up Up Up (+)
RTSI Up Down Neutral
Bovespa Up (+) Down Neutral

Bursa Malaysia Weekly Summary

KLCI Daily Chart

Beware of the low volume push up. The way the index moves, it is telling me that this is just a rebound. Daily movement can go either way. No strong bull or bear movement.

Summary for the rest of the sectors:
Malaysia Monthly Weekly Daily
FBM KLCI Up Neutral Neutral
Finance Up Neutral Neutral
Construction Up Up (+) Up (+)
Plantation Up (+) Down Neutral
Property Up Down Neutral

Wednesday, June 16, 2010

Window Dressing Again

Beware of this rally, now is the time for the half year window dressing. The "smart" fund managers need to look good before they issue the quarterly report to their clients.

Coffee and Sugar

Coffee Futures Monthly Chart

Coffee futures ran riot this week. If this keeps going on, I think that I better store up my Aik Cheong coffee before the price goes up.


Sugar Futures Monthly Chart

For sugar, the futures price has collapsed. Well, I don't care much about sugar. I can take 1 year just to finish my 1kg of sugar. I don't understand why is there a shortage when sugar is cheap now? Who is hoarding sugar? I think that based on current situation, better hoard coffee.

Saturday, June 12, 2010

World Market Weekly Summary

It seems that the market is trying to find a new base. No strong trend for US. I think that China has found a temporary bottom. I think that the next selldown will start after the end of 2010 FIFA World Cup. What do you think?

World Monthly Weekly Daily
S&P500 Up (+) Down Neutral (+)
DJI Up (+) Down Neutral (+)
NasdaqComp Up Down Neutral (+)
Nikkei 225 Down Down Down (-)
Kospi Up Neutral Neutral
SSECI Down Down Neutral (+)
HSI Down Down Neutral
TWII Neutral Down Neutral
STI Up Down Neutral
JKSE Up Up (+) Neutral
SENSEX Up Neutral Neutral
AORD Down Down Neutral
NZX50 Down (-) Down Down
FTSE Neutral Down Neutral
DAX Up Up (+) Neutral
RTSI Up Down Neutral
Bovespa Neutral Down Neutral

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

KLCI has succeeded in covering the gap of 1290-1300. Unfortunately, in the process of covering this gap, a few gaps were made at 1270 and 1293-4. From the chart, it looks like KLCI is in consolidation mode. The consolidation range should be +/-20 points around 1300. No strong trend in either up/down direction. For trend followers like me, this is the time not to take in any new position. However, if one has an old position, then I believe that it is best to close it due to the worsening fundamentals.

Summary for the rest of the sector:
Malaysia Monthly Weekly Daily
FBM KLCI Up Neutral Neutral
Finance Up Neutral Neutral
Construction Up Neutral Neutral
Plantation Neutral (-) Down Neutral
Property Up (+) Down Neutral

Tuesday, June 08, 2010

Riding the dragon

Latest from Andy Xie: Riding the Dragon.

Poll: Peak Oil

Do you know what is peak oil about? Do you have an investment based on the believe that peak oil is going to happen or happening now? If peak oil is true, then our standard of living is going to drop. We will have less money allocated for entertainment. We will have to spend a larger portion of our income on food and transport. Inflation will be high. Economic growth will become weak.

Poll: Tell me whether you believe in peak oil or not. Please vote on the left panel of this blog.

Monday, June 07, 2010

International Reserves of BNM

Date MYR (billion) USD (billion)
14-May-10 314.2 96.1
31-May-10 312.2 95.5

Source.

Looks like the outflow coincides with the past 2 weeks selldown.

Saturday, June 05, 2010

World Market Weekly Summary

Even though Asian markets had a rebound, but the world is generally starting to break to the downside:

World Monthly Weekly Daily
S&P500 Neutral (-) Down Down
DJI Neutral (-) Down Down
NasdaqComp Up Down (-) Down
Nikkei 225 Down (-) Down Neutral (+)
Kospi Up Neutral (+) Neutral (+)
SSECI Down Down Down (-)
HSI Down (-) Down Neutral (+)
TWII Neutral (-) Down Neutral (+)
STI Up Down Neutral (+)
JKSE Up Neutral Neutral (+)
SENSEX Up Neutral (+) Neutral
AORD Down (-) Down Neutral
NZX50 Down (-) Down Down
FTSE Neutral (-) Down Neutral
DAX Up Neutral Neutral
RTSI Up Down Neutral (+)
Bovespa Neutral (-) Down Neutral

I saw another sign that things are worse than we know. The 1st sign was the ban of naked short selling by Germany. The 2nd one was when President Obama gave a speech to assure everyone that things are continuing to improve after the announcement of bad employment data. When politicians come out to calm our nerves, that means that we should run and hide.

Friday, June 04, 2010

Poll: Gold


The poll only attracts 20 votes. So it is not statistically valid. Anyhow, I'm surprised at the result. I didn't expect so many people has a gold position. I guess that we are all worried about money printing, inflation and government debt.

Bursa Malaysia Weekly Summary

KLCI Daily Chart

KLCI is still in rebound mode. Looking at the chart, I think that the best KLCI can go is just around 1310. This could be the left shoulder of a H&S formation. Unless there is a new theme, I don't think that KLCI can go any higher because the finance sector has hit the monthly overbought region and based on its historical chart, the bull is pretty over. However, the next selldown could be 6 months down the road. Based on the current movement, I cannot say when will the next selldown begins.

For those that is still holding a position, ask yourself what is your time frame. If you can wait for another 5 years for the next bull, then hold on. Additionally, ask yourself about your mental strength. Only a few can ride out the bear market. Good luck!

Malaysia Monthly Weekly Daily
FBM KLCI Up Neutral Neutral (+)
Finance Up Neutral Neutral (+)
Construction Up Neutral Neutral (+)
Plantation Up Down Neutral (+)
Property Neutral (-) Down Neutral (+)