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The FBM KLCI Futures market turned into an abbatoir where bulls, cows and even calves were slaughtered wholesale, mercilessly.
Long traders were reined in and drag through one of the most bloody futures trading days since the introduction of the benchmark FBM KLCI Index.
In retro, there were earlier signs over the past few sessions when the FKLI months kept slipping regularly into discount over the underlying cash.
BT (this blog) had warned of such an impending and overdued correction with this article published on 22 Jan 2010 as per below >>>
The above chart is extracted from the mentioned article.
The crux of the chart title " NO MAN's LAND" clearly showed what goes around; comes around. Note the date of 04 Jan 2010 when the bulls punched through resistances like they were wet paper. There was little or no bear defenders. It looked then like unhabitated wasteland.
This time around it is the bear invaders' turn to go one up on the bulls. What they did in one day, so can we!. Notice the similarity of both set of 60 minutes candlesticks on 04 Jan & 26 Jan ??? Identical >>> and where did it happen?
Where else but no man's land???
All KLCI Futures contracts ended lower Tuesday and closed at higher discounts ranging from 5.0 to 7.0 points to the underlying.
The January contract closed at the day's lowest level of 1,278.0 points after dropping 17.0 points, expanding its discount to 5.02 points to the underlying from 1.79 points Monday. The contract opened 0.5 of a point lower at 1,294.5 points and moved to a high of 1,295.5 points during the day.
The February contract closed 18.0 points lower at 1,276.5 points, which is a discount of 6.52 points to the cash market against a discount of 3.29 points a day earlier. It opened 0.5 of a point higher at the day's highest level of 1,295.0 points and moved to a low of 1,275.0 points during the day.
The March contract shrank 18.5 points to 1,275.5 points, which is a discount of 7.52 points to the underlying, while the June contract closed 17.5 points lower at 1,276.0 points, representing a discount of 7.02 points to the underlying.
Spot futures expires at the last trading day of each month.