GOLD Technical Analysis >>> Put Egos Aside & Respect the Charts

I would like to repeat the idea that it is best to subordinate yourself to markets at all times.  To put your ego aside or at least check it daily to make sure it is not leading you astray.  The gold bug ego for example, hardened by a solid decade-plus of relentless bull market is in my opinion too set in its ways on balance.  That is because it is an ego that knows it is right. 

Au monthly chart, log scale

Using a log scale chart, which is better for illustrating trend lines, we see that gold is at critical lateral support zone.  But there are two more lateral support zones roughly in line with the two major bull market trend lines.

It is difficult to imagine gold declining very hard from current levels, given the superior sentiment backdrop (pervasively over bearish by the usual contrary indicators), but the chart is always the chart and it should be respected by right minded people.  Gold holds critical support at 1524 until it doesn’t, see?

HUI weekly chart, linear scale

Speaking of respect for charts, the sad journey of the HUI Gold Bugs index drives home the point.  There were no predictions made in Biiwii land.  There have only been probabilities based on status above support, below resistance, etc.  In fact, I must once again own the fact that in 2010 into 2011 I had a measured target of 888.  Nice one chart boy!

But the important thing is to keep respecting the charts no matter what they do, regardless of whether what they are doing is constructive to your favored plan or bias at any given time.  HUI, in making a series of warnings (1, 2 & 3 on the chart) by violating support levels, has come to a very bearish state.

With the constructive sentiment backdrop and extreme over sold status, the index has been a candidate to at least put in a tradeable counter-trend bounce.  But yesterday something happened that even put that prospect in jeopardy.

Since this area of the market is one that I remain engaged with fundamentally – the Cyprus hype only adds fuel to the bullish case for gold – my mindset will remain open to the bullish case at the drop of a hat.  But we will surely not become victims if worst case scenarios come about in the interim.

That weekly chart of HUI especially, has most recently been a negative view since the index lost former support at 460 after making a ‘W’ bottom last summer.  That means that Huey must now prove that it is not bearish (by recovering at least the lower of the 2 red dotted necklines) and not the other way around.

Some people dislike technical analysis because it can say some disturbing things that go against everything we think we know.  And that is exactly why we need it.  The current plan is to be ready for opportunity whenever it arrives on its own schedule.

HAPPY CHARTING FOLKS

WALL STREET >>> Pride Salvaged As Bulls Recoup 12000

Greek Deal Deflate The Bears
Stocks resumed Wednesday's late-session selling spree right out of the gate today, as investors continued to jeer the central bank's downwardly revised economic growth estimates. Meanwhile, a surprise surge in first-time jobless claims, as well as a drop in new home sales, only stoked the bearish flames. However, the International Energy Agency (IEA) was the real driving force behind the bears, after unveiling plans to tap into emergency oil reserves for just the third time in history. The move -- initiated to curb supply disruptions from Libya -- sent crude oil futures to a four-month low, and pressured the Dow Jones Industrial Average (DJIA) to an early triple-digit deficit.In a relatively rare turn of events, though, it was actually news from overseas that helped take some of the wind out of the bears' sails.

Specifically, Reuters reported that cash-strapped Greece reached an agreement with the European Union (EU) and the International Monetary Fund (IMF) for a five-year austerity plan. The eleventh-hour headlines sparked optimism over the fiscal fate of Greece, helping the major market indexes pare most -- or all, in one case -- of their losses by the bell.

The Dow Jones Industrial Average (DJIA – 12,050.00) found itself down more than 200 points in early action, but trimmed its loss to just 59.7 points, or 0.5%, in the final hour of trading. What's more, the blue-chip barometer salvaged its perch atop the 12,000 level, as well as its 10-day moving average. Still, 20 of the Dow's 30 components ended in the red, led by Coca-Cola's (KO) 2.1% drop. On the flip side, Home Depot (HD) paced the nine advancing equities with a gain of about 2.1%, while DuPont (DD) split the difference by finishing flat.

The S&P 500 Index (SPX – 1,283.50) also chipped away at its deficit in the last hour of the session, settling just 3.6 points, or 0.3%, lower. Like the Dow, the SPX also managed to elbow its way back atop its 10-day trendline by the close. Finally, the Nasdaq Composite (COMP – 2,686.75) fared the best of the three, actually clawing its way into the black in late-day trading. By the time the dust settled, the tech-rich COMP tacked on 17.6 points, or 0.7%.

Crude Oil Hit February Lows
Crude futures settled at their lowest level since Feb. 18 today, after the IEA announced a plan to release 60 million barrels of oil to ease supply disruptions from war-torn Libya. The move marks just the third time in history the agency has opted to tap into emergency supplies, the most recent coming in the aftermath of Hurricane Katrina. 

Against this backdrop, August-dated crude oil futures gave up $4.39, or 4.6%, to end at $91.02 per barrel. Earlier in the session, the front-month contract fell as low as $89.69 per barrel.

HAPPY TRADING & GOODLUCK2ALL

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Measuring the Dow Bears

Measuring the Dow Bears
Strength of Dow bears will affect KLCI Bulls

After breaking through the critical 7,882 support line, the Dow bears are now aiming at the ultimate bottom prize of 7,449 which was last November’s low. With only 106 points to go, can the bears make it and create new lows? In this report, we will gauge the tenacity of the Dow bears.

The Dow is now obviously bearish with a downward expansion of the GMMA trend lines.
Comparing the width of the downward expansion historically, it can be stated that the Dow is now reasonably bearish, though its bearishness is nowhere near the bearish levels of the October-November periods of last year when the Dow created its ultimate November low.

The Dow is also drifting below all of its MAV lines and its sizable distance below its short
term MAV lines would suggest that the bears are currently in-form and actively scouring the US markets.
Measuring Dow seller strength : The Market finds a bottom after the last seller has sold The CBOE Put Call ratio is a good way to measure selling strength in the US markets. Basically the Put call ratio measures the volume of the Put Options over the Call options. A decreasing trend shows a decreasing amount of sellers in the market. We are pleased to find a trend of decreasing sellers in the S&P market, suggesting that less bearish sellers are willing to bet short on the US markets, in comparison with long buyers. This would suggest that although the bears are now prowling US markets, their strength may be capped, and we may find a bottom soon – after the last big seller has sold.
VIX Index : Validating the reasonable strength of the Bears
The VIX Index is now moving above the short term and mid term lines, indicating a reasonable amount of fear and volatility in the markets and validating the current strength of the bears. However, the VIX Index is nowhere near the peaks of the Nov-Oct period of last year, indicating that the strength of the bears may be capped for now.
Conclusion : Bears strong enough to find new low, but strength capped.
Our conclusion is that while we find the Dow bears reasonably strong, but their strength may be capped due to the fact that the amount of sellers relative to the amount of long term buyers are decreasing.We see the bears establishing new lows for the US markets, but it won’t be far away from the current 7,449 ultimate low. A capped downside in the US markets will also cap the downside for the KLCI in the mid term.

HAPPY TRADING FOLKS!!!

FKLI market Outlook 18/02/09

FKLI market Outlook 18/02/09

The KLCI closed marginally lower at 895.23, -3.3 pts or -0.37% led by plantation stock (-2.57%) on dampening sentiment on CPO prices amid mix closing note in regional market where STI gained 7pts or +0.48%, Nikkei 225 shed 111.07 pts or -1.45% and HSI added 70 pts or +0.55%.

Meanwhile, the FKLI closed in positive tone at 892, +5.5 pts or 0.62%. The FKLI was well defended at 886 levels; however, a convincing breach of 900 levels is required for the bull to take place. We expect the market to open higher today tracking on positive tone of Nikkei and trade in upward bias. The resistance is pegged at 903 (SMA100) and support is at 885. The FKLI is expected to have more downside at current level due to its inability to hold above 900 in recent rally, investors are advised to be cautious as currently the market is slightly directionless.

HAPPY TRADING & GOODLUCK2ALL

综合指数 2009年 02月 18日 / Composite Index 18/02/2009

综合指数 2009年 02月 18日

由于隔夜美国道琼指数暴跌将近300点，所以亚太区域股市也纷纷出现开低的格局，这使到综合指数跌破了布林中频带（Bollinger Middle Band)的动态支持水平（参考图中箭头A）。无论如何，综指周三只下跌3.3点或0.4%，所以只要综指能短期内回升至布林中频带以上的话，那么综指还是有望避开下跌的局势。

如图所示，布林频带还是继续的收窄（-3%），再加上综指依然处于L1及L2线所构成的对称三角形（Symmetrical Triangle）里，这表示综指目前继续的处于巩固格局中。换句话说，综指目前继续的处于调整巩固中，直到布林频带再度打开为止。无论如何，综指的支持水平依然落在885点的胜图自动费氏线，阻力水平则是905点的胜图自动费氏线。

如图中箭头B指示，大马股市交易所的成交量萎缩14.4%，所以成交量继续的处于40天的成交量平均值以下，这表示目前整体市场的交投淡静，投资者依然在综指后市未明朗化之前采取观望的态度，这表示综指倾向于巩固的状态，暂时未能转强。
如图中C圈指示，随机指标跌破了70%的水平，所以随机指标必须短期内回弹并突破70%的水平，否则综指将继续技术调整（Technical Correction)，换句话说，综指短期有开始转弱的风险。

总的来说若布林频带继续收窄的话，综指还是处于巩固的格局中。从技术分析的角度来看，最好的调整是横摆；综指将继续的维持现状，直到布林频带重新打开，届时综指的新趋势将取决于综指处于布林中频带的相应位置。

Composite Index Daily Technical Analysis 18/02/2009
As indicated by A, the KLCI ended 3.30 points lower on Wednesday, closing below the Bollinger Middle Band. Meanwhile, the Bollinger Bands Width continue to contract 3%, suggesting that the KLCI is still consolidating.

As shown on the chart above, the L2 and L1 Symmetrical Triangle remains in place, while the support for the KLCI is still at 885 Automatic Fibonacci Retracement; resistance for the KLCI is still at 905 Automatic Fibonacci Retracement.

As indicated by B, total market volume declined 14.4%, with the volume below the 40-day VMA level. Again, if volume should stay below the 40-day VMA level, it suggests that the overall market participation is still insufficient, as the KLCI direction is still unclear. Without sufficient market participation, the KLCI is likely to consolidate further with some downside biased.

As circled at C, the Stochastic break below 70% level, giving a signal suggesting a beginning of a technical correction. Therefore, the KLCI has ended its short term bullish signal. Unless the Stochastic could return to above the 70% level in the near future, the short term market movement of the KLCI is expected to turn weak.

The KLCI is dragged by the overnight Dow Jones Industrial Average losing nearly 300 points, coupled with the losses in most Asian markets. However, with the Symmetrical triangle still in place, the KLCI is set to consolidate further.
HAPPY INVESTING

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Dow exploring lows >>> KLCI uptrend in peril

Dow exploring lows
KLCI uptrend in peril
The Dow has now broken the 7,882 support convincingly. There is no doubting the Dow
bears now, it is intent on testing the strength of the ultimate low of 7,449. If it is strong enough, it could also possibly even be creating new lows. The “deep sea explorations” of the bears will introduce perils to global markets and our KLCI.



KLCI : How badly will the KLCI bulls be hit?
While some last-minute buying activity helped to provide some consolation to the KLCI’s bearish session yesterday, the KLCI today will still be put in grave danger by the Dow bulls. The critical support band of the KLCI is pegged at the 890-900 level. Right now we are 8 points away from this level. Our only hope that the KLCI uptrend won’t be ruined today would be the marginally decreasing correlation between the Dow and the KLCI in the last
few weeks.

As can be seen from the correlation chart below, the correlation between the Dow and the KLCI is still decreasing. Let’s hope that this downward correlation trend will help preserve the KLCI’s critical 890 support today.

HAPPY INVESTING & GOODLUCK2ALL

FKLI Market Outlook 17/02/09

FKLI Market Outlook 17/02/09

Sentiment remained weak today in line with broad sell-off in regional markets on deteriorating macroeconomic fundamentals despite comments made by Finance Minister Najib Razak, stating that the 2nd stimulus package plan will be bigger and more comprehensive. The KLCI ended marginally lower at 898.53, -0.95% led by plantation stocks (-1.7%) and financial stocks (-1.08%) as compared to STI shed 42 pts or -2.55%, Nikkei 225 fell 104.66 pts or -1.35% and HSI plunged 510 pts or -3.79%.

Meanwhile, the FKLI was constantly sliding throughout the day and settled at the low of 886.5, -22.5 pts or -2.48%. The basis has widen to 12 pts discount against cash market.

As noted previously, a breach below 900 psychological level indicates that the trend has turned to bearish mode coupled with expectation on more negative report such as housing industry, manufacturing and unemployment data to be released in US this week. For today, further downside is expected and any recovery is viewed as relief rally. For instance, the resistance is at 899 while the support is pegged at 881 (SMA 50). Investors are recommended to go for short as recent rally is seemed to be weakening and can’t sustain much longer.

HAPPY INVESTING

综合指数 2009年 02月 17日 / Composite Index 17/02/2009

综合指数 2009年 02月 17日

由于受到亚洲区域股市下跌的影响，大马综合指数也不可避免的下挫8.66点，惟如图中箭头A指示，综指精确的在布林中频带（Bollinger Middle Band）上反弹，表示了布林中频带目前依然是综指的动态支持水平。如图所示，布林频带开始收窄2%，这意味着综合正进入巩固的格局。

另一方面，综指形成了一个对称三角形（Symmetrical Triangle），图中L1线为动态支持水平，L2线则是动态阻力水平。对称三角形表示综指正处于巩固的状态，所以综指接下来的走势将继续的维持在一个巩固的状态，直到综指成功突破L2或跌破L1线为止。无论如何，885点的胜图自动费氏线依然是综指的支持水平，905的胜图自动费氏线则继续是综指的阻力水平。

如图中箭头B指示，大马股票交易所的成交量比昨天减少了11.2%，所以成交量继续的处于40天的平均值以下，这表示了目前市场的交投还是属于淡静的。一般来说，当综指正处于巩固格局时，成交量减退也是很正常的。无论如何，如果综指要突破L2线后形成上扬趋势的话，那就必须要配合成交量达到40天的平均值以上来确认突破的讯号，届时综指才有望恢复转强的局势。

如图中C圈指示，随机指标（Stochastic）在试探着70%的支持水平，若随机指标跌破70%水平的话，那么将表示综指出现短期技术调整，同时也暗示着综指后市有转弱的风险。
总的来说，综指目前所形成的对称三角形也配合了布林频带收窄的讯号，这是技术分析中一个重要的讯号。综指目前的将继续的维持巩固的状态，直到布林频带重新打开或综指突破对称三角形为止。

Composite Index Daily Technical Analysis 17/02/2009
As indicated by A, the KLCI ended lower on Tuesday, with its daily low precisely supported by the Bollinger Middle Band before closing at 898.53 points. Therefore, the Bollinger Middle Band is still serving as the dynamic support for the KLCI.

As shown on the chart above, the Bollinger Bands Width started to contract 2%, suggesting the KLCI is now consolidating.

Meanwhile, the KLCI is forming a symmetrical triangle with L1 being the dynamic support and L2 being the dynamic resistance.

The symmetrical triangle also suggests that the KLCI is at its consolidation as the market direction is still unclear until a valid break out above the L2 or below the L1. Nevertheless, other supports for the KLCI remain at 885 Fibonacci Retracement while the 905 Fibonacci Retracement is still a resistance for the KLCI.

As indicated by B, total market volume decreased 11.2% on Tuesday, with volume staying below the 40-day VMA level. This shows that the overall market participation still low as investors are still being cautious while staying on the sideline. Nevertheless, it is generally normal to have lower volume during a consolidation, but if the KLCI should break above from the Symmetrical Triangle, volume above the 40-day VMA level is a must to confirm a valid break out.

As circled at C, the Stochastic is testing the 70% level, while still holding up at the short term bullish region. If the Stochastic should break below 70% level, it would be a signal suggesting beginning of a technical correction, thus the KLCI short term movement is expected turn weak.

In short, the formation of the Symmetrical Triangle is in line with the contraction of the Bollinger Bands Width. Until a valid break out of the Symmetrical triangle or a re-expansion of the Bollinger Bands Width , the consolidation of the KLCI is expected to continue.

HAPPY INVESTING & GOODLUCK2ALL

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FKLI Market Outlook 17/02/09

FKLI Market Outlook 17 Feb 2009

The KLCI start the week marginally lower to end at 907.19, -2.65 pts or -0.29% in line with weakness in regional market where STI shed 22.33 pts or 1.31%, Nikkei 225 fell 29.23 pts or -0.38% and HSI eased 98.79 pts or -0.73% amid concern on rising crude oil prices. FKLI was off high in the second session resumed trading after Bursa halted the trading on the equities and derivatives market from 12:19pm due to technical glitch. The spot month contract ended 1.5 pts lower to settle at 909, which is 2 pts premium to the cash. Turnover for spot month contract reduced to 3,719 contracts from 6,075 contracts as investors tend to stay sideline and remain caution on US market closed for President’s day on Monday. On technical side, the chart is well supported at 905 (SMA100) and RSI is seen at 57.8.

We expect there will be a small rally FKLI in coming trading days as Malaysia government is planning to announce its stimulus package, which is believe can help to lift up the market sentiment. Besides this we can hardly find any other positive factors that are likely to lead the market gain, so FKLI maybe traded in tight range bound pattern. A better approach now is to go for long, investors may long around 905 levels with tight stop-loss at around 899 as breach below 900 may indicate bearish trend is on track. Resistance is at 915 while support is pegged at 905.

HAPPY TRADING

综合指数 2009年 02月 16日 / Composite Index 16/02/2009

综合指数 2009年 02月 16日

综合指数在上扬后再度调整，所幸的是综指精确的在905点的胜图自动费氏线获得扶持（参考图中箭头A），这是综指当前的技术支持水平，综指再下一道的支持水平则落在885-887点这两道胜图自动费氏线，综指目前的阻力水平则是处于937点的胜图自动费氏线。。

如图所示，布林频带（Bollinger）打开幅度出现了再度减低的格局，这显示综指目前还是有调整巩固的趋势。无论如何，只要综指继续的处于布林中频带（Bollinger Middle Band）这道动态支持水平以上的话，那综指还是有望继续的转强。

如图中箭头B所示，马股总成交量在综指回软时减少了25.4%，这显示投资者再度的受到外围因素影响而却步，无论如何，成交量还是成功的达到40天成交量移动平均线（VMA）的水平，这表示整体市场还是处于一个活跃的水平里。

如图中C圈所示，随机指标（Stochastic）再度在达到100%后回软，这显示综指的短期走势在出现过热（随机指标达100%）后再度在短期超卖下走低。无论如何，只要随机指标继续的维持在70%以上的话，那综指的短期走势还是未算是确定出现一个下跌的趋势。

总的来说综指目前在短期涨势中出现了技术调整，综指还是呈转强状态，不过接下来成交量若跌破40天平均值的话，这就意味着投资者开始回避股市，这是投资者对综指后市悲观或不明确的反应，届时综指的后市将会看低一线。

Composite Index Daily Technical Analysis 16/02/2009
As indicated by A, the KLCI remains supported by the 905 WinChart Automatic Fibonacci Retracement despite a slight pullback on Monday. Therefore, the immediate support for the KLCI is still at 905 while the next support is at 885-887 Fibonacci Retracement. Resistance for the KLCI is at 937 Fibonacci Retracement.

As shown on the chart above, the Bollinger Bands Width is expanding at a slower rate, implying that the KLCI might be consolidating soon. Nevertheless, with the KLCI above the Bollinger Middle Band, the immediate outlook for the KLCI is still on the positive side.

As indicated by B, total market volume declined 25.4%, as investors are still being cautious. Nevertheless, volume on Monday is still above the 40-day VMA level, suggesting that the overall market is still relatively actively participated.

As circled at C, the Stochastic retreated after hitting 100%, suggested that the KLCI is having a healthy pull back as the KLCI was over-heated. Nevertheless, with the Stochastic still above the 70% level, the market movement for the short term is still bullish biased.

The slight pull back on Monday is considered normal. As long as the volume should remain above 40-day VMA level, the rally of the KLCI is likely to continue. However, if volume should failed to sustain at above the 40-day VMA level, it would be a sign of lack of confident in the market and the KLCI would have difficulties in sustaining its current movement.

HAPPY INVESTING & GOODLUCK2ALL

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