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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

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

Random Stocks / Charts KLCI Landmarks MRCB PuncakNiaga QSR

Random Stocks / Charts KLCI Landmarks MRCB PuncakNiaga QSR

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

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DJIA >>> A Dragonfly Doji Reversal?

A Dragonfly 7,882 STILL Holding
Last night, the Asian side of the trading world went moodily to bed, thinking that the bears have successfully hammered the critical 7,882 support line…only to wake up finding the support still standing! This is indeed one formidable level of support as the bears have attempted unsuccessfully to batter down this support level multiple times in the last few weeks.
Dow Intraday : Bears Succeeded briefly
At one point last night, the bears succeeded in plunging the Dow down by as much as 246 points to 7,693, way below the 7,882 support level. However, in the last hour of trading, the Dow suddenly turned around and staged a 200+ point rally from the bottom. Apparently the late intra-day rally was fueled by news that Treasury Secretary Timothy Geithner told a group of bankers that the US Government may soon unveil a plan to decrease the mortgage payments of struggling homeowners. Such plans will help stem the rising tide of foreclosures that is a primary source of the US’ economic woes.


Dragonfly Doji Sign : Requires Confirmation
As a result of the last minute intra-day rally, a rare bullish reversal candlestick pattern which is known as the Dragonfly Doji appeared in the Dow charts last night. The Dragonfly Doji is similar to the Hammer reversal pattern except for the fact that the head of the candlestick is flat instead of a small white candle.
Dragonfly Dojis are very rare in the Dow and occurs at the end of a downtrend when the market turns upwards. However like all reversal patterns, a confirmation is required in the Dow tonight in the form of a strong upward move. Until then, we still remain cautious of world markets which are tracking the Dow closely.
Strategy : Looking for a confirmation to the Dragonfly Doji
We will still be adopting a wait-and-see stance and looking for a confirmation sign tonight in the Dow to confirm the Dragonfly Doji pattern. Till then, the KLCI will drift listlessly today until such a confirmation sign appears.
Description : Dragonfly Doji
A "dragonfly" doji is the most uncommon candle of the four different types of dojis. As with any doji, the dragonfly depicts a situation in which supply and demand are in equilibrium, thus possibly signaling an important reversal. It is characterized by having a no or a small real body and a long lower shadow.

How it Works:
During the period of a dragonfly doji, prices will typically open at a high, sell off, and then return to the opening price. Dragonfly doji are fairly unusual, but when they do occur, they often resolve bullishly.

A dragonfly forms because when there is early pressure forcing the security down, but then it finds support, and buying pressure pushes the security back up.

As significant as the dragonfly doji is, one should not take action on its message alone. Always wait for confirmation from the next candlestick before taking trading action.

HAPPY INVESTING & GOODLUCK2ALL

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Random Stocks & Charts EDEN, Larfage M Cement IJM Corp

FY09P/E: N/A, P/BV: 0.3x
• The stock is poised to break out from its downward channel. If it succeeds,
we see more upside from current level, possibly towards the RM0.355 and
RM0.38 resistance levels.
• Indicators are improving. MACD is gaining momentum while RSI signal line
has hooked up.
• Cut loss however if it breaks below RM0.29. Traders with higher risk
appetite may want to position ahead of the breakout.
Eden Inc Berhad is an investment holding company. Through its subsidiaries,
the Company operates restaurants, caters food, retails souvenir and dried
seafood, and develops properties. Eden Enterprises also manufactures cakes,
pastries, and electrical and engineering parts as well as operates power plant
as an independent power producer.
FY09P/E: 8.8x, P/BV: 0.9x
• The stock has retraced to approximately 50% of the Fibonacci level after
peaking at RM4.22 (from a low of RM2.28). It may be due for a rebound
possibly towards the next resistance at RM3.46 and RM3.75.
• Bullish divergence is seen in the daily chart. MACD bars are gaining
strength while RSI has hooked up from the oversold zone.
• Investors would likely do well joining the buying bandwagon. However, cut
loss if it breaks below RM3.10, which would deem as false breakthrough.
Lafarge Malayan Cement Berhad is an investment holding company. Through
its subsidiaries, the Company manufactures, sells, and distributes cement and
clinker. Malayan Cement also manufactures and sells ready-mixed concrete,
provides shipping services, leases vessels, and trades building materials.

FY09P/E: 9.8x, P/BV: 0.7x
• The stock may have bottomed temporary at RM2.35 end October last year.
However, the rising wedge formation is a bearish sign.
• MACD is still positive but RSI is fast approaching the overbought territory,
suggesting volatile trade ahead.
• If it breaks below the trend line support of RM3.30, the candlestick may ease
towards the next support at RM3.02. Meanwhile, resistance is at RM3.67
and RM3.82. Sell into strength.
IJM Corporation Berhad is an investment holding company that provides
construction services. The Company, through its subsidiaries, operates in
property development, provides quarrying services, manufactures and sells
premix products, cultivates oil palm, and provides education services.

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