Friday, October 31, 2008

FKLI futures has grown up

20081031 1543. To some extent, the movement of FKLI futures follows the big brother, Hang Seng Index Futures. This explains the erratic behaviour sometimes, and why it moves indepently form cash KLCI. This is the advent of DMA.(Direct Market Access)

20081031 1526. Nov FKLI futures 5 tick chart. The longer term moving averages defined the downtrend this afternoon.

Thursday, October 30, 2008

20081029 Another historic day for stock indices, note the Hang Seng up 12%, KOSPI up 11%. This after the record breaking Oct 2008 so far. I also heard someone say this is the biggest 3 day winning streak for Asia Pacific markets. Meanwhile, the FKLI futures breaches the downtrend channel. We might go long on pullback to or near the breakout level. At least that is the plan, subject to price action.

20081030 1424. FKLI futures 3 day trend (blue) turned up. Might be a bullish phase for a while.

Wednesday, October 29, 2008

20081029 1029 pm. Following from our call on the bottoming of the DJIA, It seems like this may well play out, judging from the calm on the markets today, and yesterday's rally of biblical proportions. We'll have to see reaction to the FOMC decision on interest rates today..... But I am really glad that the shorts and the deleveragers sold at the bottoms on the respective markets capitulation bottoms.(fingers crossed those are the bottoms) Remember, in the days ahead when you see the so called 'deleveraging' selling of equities, pull all the bids, stand aside and let them sell as low as possible.

20081029 1423. So it seems the downtrend was still intact, with FKLI futures failing to hold gains on the opening. Futures calling for opening of 829.5 for the afternoon session open.

20081029 1002. FKLI futures opened high, but was usbsequently sold down. Now it is in no man's land, in between the mov avg.

Tuesday, October 28, 2008

20081028 1705. FKLi futures closing near the high end of the range today. Notwithstanding this bounce today, the 2 hour chart trend is still down.

20081028 1612. Futures FKLI is trading at day's high 840. At around 9 to 9:30 am this morning I heard screaming from the MASA screen. IOICORP 2.06, Mayban 4.74. They were screaming "Buy me" but most were engrossed in the "Sale of the Century" and were only panic selling....

20081028 1406. FKLI futures 15 min chart. Is it a double bottom? If it is, price needs to overcome the moving averages, which provide the 1 and 3 day resistance levels.

Saturday, October 25, 2008

20081024 The price action on the emini S&P500 shows the 840 level to be the key support. If price breaks and closes below this level, there is likely further downside.

Friday, October 24, 2008

20081024 The GBPUSD rate has dropped off a cliff this week. Sometimes traders need to look across at what moves. (compared to the FKLI futures, which dropped but was a yawn compared to the GBPUSD) Oh and by the way sterling yen (GBPJPY) drop was even more jaw dropping...

20081024 21:33. The Dow futures went limit down a couple of hours ago, and has been suspended from trade till now. That was -550. It is now -620. Do you want to know what I think? This is THE FLUSH out all out panic that marks the bottom of this selloff the past few weeks.

The 4 hour chart shows the possible double bottom.

20081024 Staying short on the right side of the moving average (34ema) would keep one in good stead in today's FKLI futures trading.

Thursday, October 23, 2008

20081023 An inverted H&S pattern on FKLI futures leads to the reversal on the 5 min chart.

Wednesday, October 22, 2008

20081023 1235. The local markets are a yawn. Today the big move in Asian session timezone is the US dollar, which broke the key 1.30 support level on EURUSD rate.

Monday, October 20, 2008

20081020 1609. Today Najib announced the government's economic package for the country, in the face of the selling due to the financial crisis affecting the world.

Among the measures, Valuecap will use RM5 billion to buy 'undervalued shares'. Back in 1997, Dr Mahathir did the same thing "we will issue bonds worth RM8bn to buy stocks. At current PE it will be profitable." The KLCI was at 800 and tanked to 265 back then.... What will happen now?

Another notable quote is from Warren Buffett: "I am buying US stocks. A basic tenet of my investing philosophy is 'Be fearful when everyone else is greedy, and be greedy when everyone is fearful.' Right now FEAR is gripping even the most seasoned market professionals."

20081020 1502. FKLI futures reaches 920, shorties have to bear some pain.

20081020 1230. Into the lunch session break, we can see FKLI futures bahaving well and retaining the gains. It is true! There are those who get irrationally overexuberated to the downside and sell like crazy, (see ellipses on the chart) puttung money into professional traders' pockets.

Double bottom on 5 min FKLI futures

20081020 1120. FKLI futures shows double bottom formation. This feels like the beginning of the end or does it signal the end. Certainly the way the selling came in on Friday on KLSE stocks and earlier this morning, it certaintly feels like capitulation.(bottom) In this situation, with the benefit of hindsight, everyone should have just stpped aside with the bids and let them (the suckers) sell every stock down 20 or 30% then there is opportunity for those brave enough to take on the capitulation trade. Hopefully this rebound continues on into the afternoon.

Saturday, October 18, 2008

20081017 Weekly KLCI is nearing the 790 target price for the giant H&S formation. it has taken about 3 months for the pattern we identified in early July to play out.

I have heard that the DMA revolution for Malaysian futures is taking shape. Excel force's DMA engine is now tested and approved by Bursamalaysia, and a futures broker is doing testing to launch to retai traders in about 2 months. Stay tuned!

Monday, October 13, 2008

20081013 A sea of green across the world equity markets today, in optimism on the Eurozone leader's action plan to cure the financial system woes. Some notable quotes "When it looks like the end of the world, IT ISN'T" A fellow trader asked me today on how the markets would go, the reply: "You will see the mother of all technical rebounds today...." I am not much of an experts/guru guy, but there was this expert on Bloomberg TV tonight saying, "This could end up being the buying opportunity (equities) for a generation." The anchor said that this move was a 9.5 standard deviation move downwards, the odds of which were the same as winning the lottery twice or being hit by an asteroid falling from outer space....

LIBOR rates: the key to any equities bounce

After the measures put in by the meeting of Eurozone leaders, the key to any bounce in equity indices is the LIBOR today when European markets open.

Saturday, October 11, 2008

Ten year cycle for the markets

The financial crisis is gripping markets, capitulation selling this past week, Oct 2008 joins the annals of history for market crashes. Recession looms large, some say will be prolonged one.

Let's step back and look at the investment cycle, where the real big money is made by such names as Warren Buffett. 1973, 1982, 1993, 1998 and now 2008. One needs to look at one's lifespan, 70-80 years?? First 20 years is spent in childhood and education into adulthood. After that how many 10 years has one got. The rest you can work out for yourself.....

Does one rush out to buy? That is a question I leave to you to answer.

Friday, October 10, 2008

Weekly H&S revisited

20081010 1012. With the dow plunging, the target of 790 looms closer and closer on wht giant H&S pattenr on the KLCI cash index.

Thursday, October 09, 2008

20081008 1715. FKLI futures moves up, slowly but surely to 985.

20081009 1128. FKLI futures is at the decision point, whether to move up or continue downwards.

Wednesday, October 08, 2008

20081008 ES emini S&P500 futures tank further. Looking like the flush out by those who are panicking and calling their brokers:"I don't care. Sell everything! Get me the F*(* out"

Tuesday, October 07, 2008

20081007 1623. FKLI futures pushes into new high and collapses! What a wild day today.

20081007 1245. 15 min FKLI futures chart is testing the 200 ema. Might be a pullback then we'll see if it can test new highs.

"There is the plain fool who does the wrong thing at all times anywhere, but there is the Wall Street fool who thinks he must trade all the time."J Livermore Manchester City FCl Crude Palm Oil


From Dragons and Bulls by Stanley Kroll
Intro and Foreword
The Importance of an Investment Strategy
5 The Art of War, by Sun Tau (circa 506 BC) and The Art of Trading Success (circa AD 1994)
That's the way you want to bet/a>
Long-term v Short term trading
Technicals v Fundamentals
Perception v Reality
Part 1: Winners and Losers
Part 2: Winners and Losers
Sun Tzu: The Art of War
Those who tell don't know, those who know don't tell
Why there is no such thing as a "bad market"
The Secret to Trading Success
The Experts, do they know better?
Risk control and money management
Good advice
The 'good bets' business by Larry Hite
Don't lose your shirt
Ed Sykota's secret trend trading system