Friday, March 11, 2011

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

A sell signal on the daily chart for KLCI. Looks like the index won't go up for at least another 1-2 months. No weekly sell signal yet. Not a time to buy. Better sell half until the weekly signal indicates whether the bull or the bear is in charge.

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

Monday, March 07, 2011

International Reserves of BNM

Date MYR (billion) USD (billion)
14-Feb-11 338.0 109.6
28-Feb-11 338.6 109.8


Saturday, March 05, 2011

China Watch

SSECI Weekly Chart

SSECI is now almost entering its 2 years consolidation period. If it can break above 3100, then it will be entering another bull phase. So, look out.

Best way to play is through the ETF listed in US: Direxion China Bull x3 (CZM).

Good luck!

Dollar Crash

DX Futures Weekly Chart

The press has not been talking about this yet (or they have, I don't know since I don't watch TV or read newspaper). The DX chart shows that the USD has just broken its support line. The dollar crisis is coming (again!). Uncle Ben will eventually face the fact that too much money printing will cheapen the value of the currency.

What will happen?

First you need to understand the basic: Money must generate yield (i.e. interest rate). Nobody can stand to see their money generate 0% return. This idea has been reinforced by money managers.

When one asset class is not generating any yield, investor will move the money into another asset class. Traditionally, the money will move into either bond or equity. That is why you have the inverse correlation between bond-equity. Equity goes up, bond goes down. Bond goes up, equity goes down. But that relationship is not valid now as we have another class to invest, commodities and precious metals. With the invention of ETF/ETN, it is now easier to invest in commodities an precious metals.

The next mania is happening now, right in front of our own eyes. This is your chance to get 1000% return (if you get it right and stay with the trend). Try not to underestimate the trend. Remember that when SSE was at 3000 and everyone calling it a bubble - which it eventually doubled to 6000?

Good luck!

Bursa Malaysia Weekly Summary

KLCI Weekly Chart

KLCI seems to have stabilized within the uptrend line. It did broke briefly which scares everyone, but now is up above the line again. As I said in my last post (3 weeks ago), there is no sign of a bear market yet. Based on yesterday's closing, KLCI should oscillate between 1500 - 1540 before making its next move. I don't know whether this is a bullish or a bearish move yet. If you need a prediction, then I will say to the upside because:
1. Do not underestimate the power of money printing.
2. MYR is still appreciating against USD.
3. Non-professional investors are all bearish about the market.

Point 3 is interesting because I heard of stories about people switching from equity unit trust to bond or investors liquidating because they read it somewhere that the market is failing. This is a sign, in my opinion, that the top has not been reach for the simple reason is that there is no euphoria. When the majority agrees on the same thing, the market will do the opposite because the power to move markets is controlled by the professionals hedge fund manager (not the typical unit trust manager).

So, I think that after the market has stabilized, KLCI will challenge 1600 again, this will suck in the innocents before the real selldown.

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

For the next few months, concentrate your money in inflation theme. Buy precious metals, O&G, agriculture because the USD is experiencing a slow crash (news has not reported it yet - no panic yet). The commodity play will enter into an euphoria state before we hit a recession/depression.

Good luck!