Weekly Summary

KLCI Weekly Chart

A few red flags: Reversal candle, RSI uptrend broken, bearish divergence in MACD. Trend is still up, but I think that a strong correction is coming. I'm gonna reduce some weak position. The problem is the volume has shrunk so much. I didn't reduce last week because of work commitment. Felt like working like an ox all the time. Still looking forward to the day I can shake my leg and still see money flowing into my pocket...

Malaysia	Monthly	Weekly	Daily	Note
FBM KLCI	Up	Up	Neutral (-)	Correction. No bottom yet.
Finance	Up	Up	Neutral (-)	Correction. No bottom yet.
Construction	Up	Up	Neutral (-)	Correction. No bottom yet.
Plantation	Up	Up	Neutral (-)	False break of downtrend. Correction.
Property	Up	Up	Neutral (-)	Potential double top.
FBM ACE	Up	Up	Neutral (-)	Potential H&S.

International Reserves of BNM

Slight increase at 14 Aug 2009. If you look at the amount in USD (blue line), looks like a head & shoulder formation. :p

New Bubble Threatens a V-Shaped Rebound

Are we in a bubble now? I don't feel any bubbles. Is China a bubble? Andy Xie says that New Bubble Threatens a V-Shaped Rebound. Anyhow, if it is a V-shaped recovery, does that means the leftside slope is the same hight as the rightside slope?

William Black

A good talk by William Black about the failure of regulators to regulate. This is something that we can surely learn.

SSECI

SSECI Daily Chart

This is scary! Look for support at around 2800. If not....

Based on weekly chart, there is still no bearish divergence yet. So, long term still up. Short term, to test your mental strength.

World Market

Nothing much happened. Every market has hit a top. I'm not sure whether this is THE top or just a temporary top.

World	Monthly	Weekly	Daily	Note
S&P500	Up	Up	Up	R=1.15k
DJI	Up	Up	Up	R=9.8k. Daily bearish divergence
NasdaqComp	Up	Up	Up	At R=1.95k-2k
Nikkei 225	Up	Up	Up	Next R=11k
Kospi	Up	Up	Up	Next R=1.6k. Overbought.
SSECI	Up	Up	Up	Next R=3.8k. Correction.
HSI	Up	Up	Up	R=21k, S=19k
TWII	Up	Up	Up	Toppish
STI	Up	Up	Up	At R=2.65k.
JKSE	Up	Up	Up	At R=2.5k, overbought
SENSEX	Up	Up	Up	Next R=17.5k
AORD	Up	Up	Up	R=4.6k Slightly overbought
NZX50	Up	Up	Up	R=3.2k Slightly overbought
FTSE	Up	Up	Up	R=5.1k
DAX	Up	Up	Neutral (-)	R=5.5k
Bovespa	Up	Up	Up	R=55.8k

Weekly Summary

KLCI Weekly Chart

Weekly chart show overbought (RSI). However, no bearish divergence yet but there is one in the daily chart. From the chart, you can see that there is no horizontal resistance until 1300. But I don't think it can move up without any correction (due to the overbought market).

Currently I'm just hanging on to my profitable position. If there is no big crash, I think that the lower liners will continue to play catch-up for the coming week.

Malaysia	Monthly	Weekly	Daily	Note
FBM KLCI	Up	Up	Up	Overbought. Daily bearish divergence
Finance	Up	Up	Up	Overbought.
Construction	Up	Up	Up	Overbought.
Plantation	Up	Up	Up	Overbought. Breakout from downtrend
Property	Up	Up	Up	Slightly overbought.
FBM ACE	Up	Up	Up	Will challenge the previous high

Fuzzy Numbers

If you follow the Western media (CNN, Bloomberg etc), you hear that they say the Chinese government is massaging the economic numbers, everything is a lie, the economy is not as rosy as they claim etc. Well, the US government is doing the same too!

Have a look at this video: Fuzzy Numbers

Reading List

Once in a while, I received an email on how to learn investment. So to avoid repeating, I list out the self-learning book list for Warren Buffett or Paul Tudor Jones wannabes. This is your reading assignment:

1. Reminiscences of a Stock Operator by Edwin Lefèvre
2. Trading for a Living: Psychology, Trading Tactics, Money Management by Alexander Elder
3. Market Trading Tactics: Beating the Odds Through Technical Analysis and Money Management by Daryl Guppy
4. Secrets to Winning Stocks: Change your Investing Destiny by Improving your Trading Method by Teoh Chang Yeow
   
5. Trend Following by Michael W. Covel
   
6. Trading Rules: Strategies for Success by William F. Eng
   
7. The Disciplined Trader: Developing Winning Attitudes by Mark Douglas
8. Inside the Investor's Brain by Richard L. Peterson
   
9. Common Stocks and Uncommon Profits and Other Writings by Philip A. Fisher
10. How To Make Money In Stocks: A Winning System in Good Times or Bad by William J. O'Neil
    

Before you start investing/trading in equity, commodity, forex or property, you need to begin by investing in yourself with knowledge. If you go out without a clue on the rules of the game, you will be going to get hurt badly.

The book list is long because I don't know which method suits you. You must find it out yourself. This may take a few bull/bear cycle before you find the one that suits you (hopefully before you blow yourself out)

Book number 1 is a must read. That is your textbook. The rest are elective subjects. Just make sure you learn techniques (technical analysis or fundamental analysis), money management (or risk management) and psychology.

Good luck!

Tgoffs

Tgoffs Weekly Chart

Broken the downtrend, corrected and now, looks like it is heading up again. Should challenge 1.70 soon.

Disclosure: I'm long in one of the warrant.

World Market

S&P 500 Weekly Chart

Looking at the S&P 500 weekly chart, the next major resistance is at 1100 to 1150. Will it continue to blast up or take a move with nerve wracking zigzag path?

Shanghai, HSI, TWII and Sensex may have hit a top. If they plan to go up, then most probably after a consolidation phase. Currently, it seems that it is the Western market's time to play catch up.

World	Monthly	Weekly	Daily	Note
S&P500	Up	Up	Up	R=1.15k
DJI	Up	Up	Up	R=9.8k
NasdaqComp	Up	Up	Up	At R=1.95k-2k
Nikkei 225	Up	Up	Up	Next R=11k
Kospi	Up	Up	Up	Next R=1.6k
SSECI	Up	Up	Up	Next R=3.8k.
HSI	Up	Up	Up	R=21k, S=19k
TWII	Up	Up	Up	Toppish
STI	Up	Up	Up	R=2.65k. Correction.
JKSE	Up	Up	Up	At R=2.35k, overbought
SENSEX	Up	Up	Up	Next R=17.5k
AORD	Up	Up	Up	Downtrend broken. R=4.6k
NZX50	Up	Up	Up	R=3.2k
FTSE	Up	Up	Up	R=5.1k
DAX	Up	Up	Up	R=5.5k
Bovespa	Up	Up	Up	R=55.8k

Weekly Summary

KLCI Weekly Chart

KLCI still going up but with a weaker momentum. So watch out!

Malaysia	Monthly	Weekly	Daily	Note
FBM KLCI	Up	Up	Up	Overbought.
Finance	Up	Up	Up	Overbought.
Construction	Up	Up	Up	Overbought.
Plantation	Up	Up	Up	Slightly overbought.
Property	Up	Up	Up	Slightly overbought.
FBM ACE	Up	Up	Up	Will challenge the previous high

International Reserves of BNM

Not much change at 31 Jul 2009.

Warrant Orgy

Mama mia! 10 warrants to be listed on 7 Aug 2009. Pay attention! First PUT warrant from AM! Yipeee!!! Now, if CIMB and OSK will also issue a PUT for every CALL, then KLSE will become a trader's heaven!

1. Sime-CH (4 Feb 2011, MYR8.15, 8 to 1, CW) from CIMB
   
2. Genm-CL (4 Feb 2011, MYR3.00, 4 to 1, CW) from CIMB
3. Gamuda-CI (4 Feb 2011, MYR3.12, 4 to 1, CW) from CIMB
4. Bursa-CO (4 Feb 2011, MYR7.70, 10 to 1, CW) from CIMB
5. Bursa-CN (5 Aug 2010, MYR7.20, 10 to 1, CW) from OSK
6. KNM-CB (5 Aug 2010, MYR0.85, 2 to 1, CW) from OSK
7. Commerz-CG (5 Aug 2010, MYR9.30, 15 to 1, CW) from OSK
8. Axiata-CC (5 Aug 2010, MYR2.75, 5 to 1, CW) from OSK
9. HKEX-CC (4 Feb 2011, HKD143.90, 125 to 1, CW) from AM
10. HKEX-HI (4 Feb 2011, HKD143.90, 125 to 1, PW) from AM

Now, I have to get busy to rewrite my Bursa Malaysia Warrant Calculator to take into account this PUT warrant. I feel so excited!

China Stock Market is a Ponzi Scheme

Andy Xie says that the China stock market is a big big ponzi scheme. At the end of he says:

In summary, the market frenzy now won’t last long. The correction may happen in the fourth quarter. There could be another wave of frenzy next year as China can still release more liquidity. When the dollar recovers, possibly in 2012, China’s property and stock market could experience collapses like during the Asian Financial Crisis.

Hmmm...you mean that it is still safe to go in now?

CPO Breakout

CPO Weekly Price

The last time I mentioned about the breakout (April 1, 2009), plantations stock did not react much, I sold my plantations CW when the price breaks down. Now, it seems that CPO is heading up again. I hope that plantations can move more this time.

How To Profit From ISA Protest

Every crisis is an opportunity! How to turn a profit from a protest instead of an allege loss:

1. Allow a peaceful protest between 12pm - 3pm: Under the hot sun, humans will lose a lot of water due to sweating, this loss needs to be replace. Traders can sell mineral water or 100Plus to quench the thirst of protestor.
2. Protesters need to travel to downtown KL, means of transport are the usual train, LRT, car, bus and motorcycle. Increase revenue from parking and toll (it seems that most roads leading to KL are tolled). Increase petrol sales will benefit Petronas. RapidKL buses will be full.
   
3. Sales of T-shirt, headband, scarf, button pins with anti-ISA wordings.
4. After the protest, everyone will be surely hungry (the walking and shouting will require a lot of energy). This is an opportunity to sell Ramli burger, pisang goreng, jagung bakar, ayam percik and all sort of food. Wah! Like a pasar malam now.

This is how a businessman thinks - positively. In my opinion, let them protest peacefully and get it done as fast as possible. I think that 2-3 hours of protest will satisfy the protestors. A lock down of the whole city for the whole day will definitely cause financial loss to everyone.

Sugar High

Sugar Weekly Chart

It is time the government float the price of sugar. Sugar and other commodities cannot be subsidized continuously because it will promote wastage. Too much sugar in your diet will mean greater chance of being obese. Being obese will lead to a lot of health problem. When people have health problem, they will mostly end up at government hospital. So, the government or more precisely, the tax payer is paying for subsidize sugar and health care.

Let sugar price adjust to international price. Higher price will cut down the consumption of sugar, less chance of obesity, less money needed for health care.

In my opinion, price control is a bad thing. It distorts supply and demand, and when the displacement gets too wide, a sudden adjustment will bring suffering to everyone because people need time to adapt to a new environment.

Anyhow, let us just hope that sugar will not break above 20.00.

Crude Oil Alert!

CL Daily Chart

Hmm....possible breakout from a triangle formation. Next resistance will be around USD79.00. If USD continues to slide down, expect oil to go up.

Anyhow, have you all heard of the peak oil theory? Go to the OilDrum to get information about peak oil. It seems that Malaysia's oil production peaked in 1997. That is why Petronas need to go out further to the sea to look for oil. Since Malaysia's public transport is in total chaos, I see many hardship for the people. Weak currency, corrupted and authoritarian government, low tech industry or industry that relies extensively on cheap energy and inefficient use of natural resource are all ingredients for a painful suffering to the society when the price of oil goes up.

I really believe that one should now prepare for the peak oil than rely on the government because the current government is too busy in power grapping or to enrich itself that it has any time to plan for the future of our generation.

DX Alert!

DX Daily Chart

Dollar Index is on the verge of another break down. Will it turn around and make a double bottom formation? Or will it break down towards 72s? I'm sure that the Russians and Chinese do not want to see their investment losses value but then again, if the world's smart investor and hedge funds try to get ahead of the Russians and Chinese, USD will be heading into a ugly decline.

Keep an eye of DX for the next possible crisis in forex.