ZL's Bursa Themes : Updated commentaries and charts of FKLI, FCPO, FOREX and Bursa Stocks

Monday, January 24, 2011

The VIX Awakens >>> Wall St. Traders Will Feel The Shivers (Sooner Than Later)

The CBOE Volatility (VIX) Index

Having reached a potential support level at last mid April / May 2010's low near 15, and warned that a bounce off that level could cause a stock market pullback. That's because the VIX and stocks usually trend in opposite directions as shown in Chart A.

The reason I'm coming back to the VIX today is because it's climbing 8% and beginning to look like it's short-term trend is turning up.

Chart B shows the VIX action more closely. After bouncing twice off support near 15 since mid-December, the VIX is challenging its early January intra-day high at 18.63. A close overthat initial resistance barrier would turn its short-term trend higher and could signal an overdue pullback in the stock market.

RALLY TIME!
The recent rally in the broader stock market has begun to correct; and it shall likely correct for the next several weeks. We view this decline much in the same manner as the Jan-2010 to early Feb-2010 decline, which the S&P lost roughly 106 points or nearly -10%. Certainly the momentum are turning lower, and now we view the VIX as a confirming indicator that perhaps has higher prices in mind than anyone is prepared for at this juncture. But at this point, we view any decline in stocks as a "cooling-off" period prior to perhaps a higher high in the 2nd quarter.

The weekly chart shows major support at the 16-to-18 zone is holding once again, and has for all practical matters back to mid-2007. This is reasonable, and one could very easily note once the VIX turns higher, then it generally "spikes" higher. If that is the case here, and the probabilities do favor such an outcome - then minor trendline resistance at 19 should be taken out. This would argue for a 200-week exponential moving average mean reversion exercise that would carry prices upwards to 24.56 or even slightly higher. At that point, quite obviously the technical landscape would need to be reassessed, for further gains would put the declining trendline off the 2008-to-2010 highs into play, and we fear what a breakout above this level would mean to stocks and the US economy in general.

NOTE
The DJIA closed strongly after tagging a new high last Friday.
But do you see any volume to substantiate the prices?
Where is the supporting cast?

CAVEAT EMPTOR

Malaysia Derivatives Exchange >>> FBM KLCI Futures

FKLI >>> A Double Top for the daily & a Hanging Man for the weekly
The recent correction in the broader stock market has begun to correct and it shall likely correct for the next couple of weeks with the inevitable technical rebound here & there. ZL view this decline much in the same manner as per mentioned to ZLBT regular KY when the FBMKLCI & FKLI were both peaking around or slightly below the 1580 level.

But at this point, ZL view any decline in stocks and futures as transitory prior to perhaps a larger high in the 2nd quarter.

To wit, the weekly FKLI chart shows major resistance with the last candle in a Hanging Man formation which is the tailend pattern of a Double Top formation in the daily FKLI Chart formation. Both the weekly & daily are as per below for your perusal.

In a private discussion with KY recently, ZL did mentioned a 2nd round of profit takings at FKLI 1555.0 level which delivered last Friday. The FKLI pullback to 1555.0 was mentioned on Wednesday just before the Thaipuism public holiday.

To be honest, it was quite severe and Friday's FKLI 24.5 pts losses was a little beyond my expectations.

Maybe it's the executioner (Hanging Man) below working overtime.

Some ZLBT fkli traders may be intrigued how ZL nailed the FKLI with a SHORT 1571.5 last open call. You will find such an article if scroll down this page a little or in the archives. Mind you, that was my SECOND p0rofit takings at FKLI 1555.0, the 1st was a week before that.

BURSA MALAYSIA >>> Tired, lethargic & running on empty
Whatever the main media says, ZL do not follow. That is for the masses (traders & non-traders included) and you know what? The majority losses ...... :P

Bursa rose 90%++ since Najib's watch and we were way below the 1000 pts psychological mark remember? ZL made a vow to give BN my vote if Najib can bring the old KLCI above the 1K mark. He delivered, with the new FBM KLCI created in June that year, and ZL shall keep to my end of the bargain comes General Election but do not hold your breathe. You may get the blues before the party begins .....

HAPPY TRADING

Wednesday, January 19, 2011

Technical Analysis : 综合指数 2011年01月19日 / FBMKLCI 19/01/2011

FBM KLCI 19 January 2011
As indicated y A, the FBM KLCI had an intra-day low reaching 1561.87 points, but it managed to rebound right below closing, ended the day at 1566.51 points, downed 3.53 points or 0.22%. Support for the KLCI is at 1552.66 WinChart Automatic Fibonacci Retracement while the resistance is at 1567.95 points.

Meanwhile, the Bollinger Bands contracted 43%, and this suggests that the KLCI is still consolidating, but since the KLCI is below the Bollinger Middle Band, the immediate technical outlook for the KLCI is on the lower side.

As indicated by B, total market volume fell 4.22%, but still above the 40-day Volume Moving Average. Generally, the market is still actively participated, but if volume should continue to fall, the market sentiment could turn weaker.

As indicated by C, the Stochastic fell below 70%, ended the short term bullish signal. If the Stochastic should break below 30%, it would be entering the short term bearish territory, and the KLCI short term movement is likely to turn weak.

In conclusion, the KLCI is still consolidating, but gradually turning weaker as the KLCI has broken below the Bollinger Middle Band. Nevertheless, the Bollinger Bands has not expanded, and therefore, it has not confirmed any bearish movement signal for the KLCI yet.

综合指数 2011年 01月 19日
如图中箭头A所示，富时综合指数一度下跌至1561.87点的全日最低点，惟综指在收市是回弹，收窄跌幅，以1566.51点闭市，按日下滑3.53点或0.22%，综指当前的支持水平落在1552.66点的费氏线，阻力水平则维持在1576.95点。

如图所示，布林频带（Bollinger Bands）收窄43%，所以综指仍然处于调整巩固的格局中，惟综指周三跌破布林中频带，这使到综指有趋软的迹象，因为接下来若布林频带开始明显的打开，而综指又未能回到布林中频带以上，综指将有形成跌势的风险。

如图中箭头B所示，马股的总成交量减少4.22%，不过成交量成功的保持在40天成交量移动平均线（VMA）以上，这表示整体市场虽然开始沉寂下来，不过交投量仍然达到一个健康的水平，所以市场仍然有足够的承接力量吸纳套利的卖压。

如图中箭头C所示，随机指标（Stochastic）跌破70%，所以综指的短期走势有开始转弱的讯号，接下来若随机指标跌破30%的水平，综指的短期走势将被确认进入短期的跌势中，直到随机指标上扬突破30%为止。

总的来说，综指在调整巩固了两周后，有开始转弱的迹象，所幸的是布林频带目前仍然收窄，所以综指并未确认任何新趋势，接下来综指必须在短期内重返布林中频带，那综指新趋势在布林频带打开时，才能避开形跌势。

CAVEAT EMPTOR

(Buyers Beware)

Monday, January 17, 2011

Technical Analysis : 综合指数 2011年01月17日 / FBMKLCI 17/01/2011

综合指数 2011年 01月 17日
如图中箭头A所示，富时综合指数稍微上扬，综指以1574.49点闭市，以收市水平来算，综指1574.49点是历史的新高水平。综指当前的支持水平继续处于1552.66点的费氏线，阻力水平则维持在1576.95点。

如图所示，布林频带（Bollinger Bands）收窄32%，这进一步的显示综指继续的处于一个调整巩固的格局中。一般上，综指将保持巩固的格局，直到布林频带再度明显的打开为止。

如图中箭头B所示，由于综指调整巩固，马股交易的数量减少11.05%，不过仍然保持在40天成交量移动平均线（VMA）以上，这显示马股属于活跃的状态，若成交量能保持在40天平均值以上，这将对综指保持转强的走势有利。

如图中箭头C所示，随机指标（Stochastic）上扬并且突破90%的水平，这显示综指的短期走势继续维持在上扬的格局。以技术而言，只要随机指标继续处于70%以上，综指的短期上扬趋势仍然算是完整的。

总的来说，综指依然属于调整巩固的走势中，目前综指仍然获得布林中频带以及14、21、31天加权移动平均线（EMA）的扶持，所以若布林频带在短期内开始打开，综指仍然有望恢复上扬的趋势。

FBM KLCI 17 January 2011
As indicated by A, the FBM KLCI gained 4.6 points to close at 1574.49 points, making yet another historical new high. Support for the KLCI is at 1552.66 while the resistance is at 1576.95. As shown on the chart above, the Bollinger Bands contracted 32%, and this suggests that the KLCI is still consolidating, until the re-expansion of the Bollinger Bands.
As indicated by B, total market volume fell 11.05%, but remain above the 40-day Volume Moving Average. This shows that the market is still active, while investors' confidence is still on the positive side.

As indicated by C, the Stochastic breaks above 90%, and this suggests that the short term movement of the KLCI is strong, but getting slightly over-heated. Nevertheless, with the Stochastic above 70%, the short term market movement for the KLCI is expected to be positive.

In conclusion, the KLCI is still consolidating, with positive technical outlook. At the same time, the long term view of the KLCI remains positive as the 14, 21, 31 EMA is still serving as the dynamic support. If the Bollinger Bands should re-expand with the KLCI above the Bollinger Middle Band, more upside movement for the KLCI is likely.

HAPPY TRADING