The KLCI bull is confused. After watching the Dow rally by more than 10% last week, it is tempted to join the Dow rally. But the danger posed by the KLCI bears still remains. Should the KLCI or should it not join the Dow’s up wave?KLCI-FKLI Futures spread : Coincident but volatile indicator
The KLCI-FKLI Futures (Spot Month) spread is a coincident but extremely volatile indicator of where the KLCI will be heading. During the Dow’s rally last week, the spread has been alternating between positive and negative figures almost each day. Generally a positive spread denotes bullishness while a negative spread denotes bearishness. With the spread impersonating Jekyll-Hyde tendencies, it is obvious that the KLCI is still uncertain on whether to rejoin the Dow and global rally in equities.
The KLCI-FKLI Futures (Spot Month) spread is a coincident but extremely volatile indicator of where the KLCI will be heading. During the Dow’s rally last week, the spread has been alternating between positive and negative figures almost each day. Generally a positive spread denotes bullishness while a negative spread denotes bearishness. With the spread impersonating Jekyll-Hyde tendencies, it is obvious that the KLCI is still uncertain on whether to rejoin the Dow and global rally in equities.
KLCI-Dow Correlation : A Lagging indicatorThe KLCI-Dow correlation is a more stable but unfortunately extremely lagging indicator as it places huge mathematical emphasis on historical data on the interaction between the KLCI and the Dow. The KLCI-Dow Correlation continues to dip yesterday to 0.6051, showing a general reluctance of the KLCI in joining the Dow rally.
HAPPY TRADING & GOODLUCK2ALL
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