Rush Hour

Good buying support

2011-08-24T00:46:00.001+08:00

The index open gap up just above daily Pivot point implicating a bullish day, It did found support at t daily S1 before reversing to uptrend to close at day’s high just below daily R2. The bullish tone printed a bullish candle with a short lower tails indicating substantial buying support. Yesterday, volume was quite low with retailers and local institutions were net buyers. Today volume traded improved from yesterday.

The index as expected has moved above 1475. Tomorrow I am expected the buying support to continue and it will able to close above the 5d MA unless there is negative factors emitting from US and Europe.

Support at 1475.

2011-08-23T00:17:00.002+08:00

FBMKLCI opened with a gap down at Daily S1. It went higher in early session but could not penetrate the daily pivot point and consequently it moved south to daily S3 level. The bearish sentiment resulted in a sold/black candle with a short shadow reflecting not much buying support.

FBMKLCI just managed to close below the support level of 1475 but well above the weekly S1 level, for the next 1-2 days the index is expected to cross over the 5d MA and retesting the 1475 level again.

Testing the low of 1423

2011-08-22T02:10:00.003+08:00

Dow FBMKLCI

Date % Point % Point

12/8/2011 1.13 125.71

15/8/2011 1.90 213.88 0.84 12.47

16/8/2011 (0.67) (76.97) 0.14 2.10

17/8/2011 0.04 4.28 0.32 4.83

18/8/2011 (3.68) (419.63) 0.02 0.23

19/8/2011 (1.57) (172.93) (1.29) (19.32)

Last week only the overnight Thursday negative performance of the Dow has an negative effect for FBMKLCI on Friday.

Chartwise, the 50% FR at 1510 acted as resistance for the pullback of the down trend. Tuesday and Wednesday candles formed a bullish doji cross harami but Thursday gap opened could not penetrate the 50% FR and formed a bearish hangman candle.

Friday with Dow performing badly overnite and there was a gap down on the open.The open was at around daily S2 and FBMKLCI could not push above it and went below the 5d MA.It found its low at weekly pivot and monthly S3.

With the falling window, FBMKLCI is testing first support level at 1475 with subsequent supports at 1463 and 1423.

For a long term perspective,the current downturn has not reached its target of double top formed since early of the year.Based on the height of the double top the target is 1350.

Cap by 50% Fibo Retracement

2011-08-17T23:59:00.002+08:00

R3	1519.95
R2	1515.25
R1	1506.74
Pivot	1502.04
S1	1493.53
S2	1488.83
S3	1480.32
Open	1502.21
High	1504.63
Low	1,499.59
Close	1,503.07

On Tuesday FBMKLCI was met by 50% FR while today the index formed an IB. With no touch on Tuesday the index is expected to retract toward the 5d MA. If will be comfirmed if the index fall below today's low.

Gains in Asia

2011-08-15T23:53:00.001+08:00

Retail investors have been a net seller in local bourse for four straight week with foreigners have been a net seller for the last three weeks.

Yesterday FBM KLCI registered a rise of 1.08% in line with gains of regional bourses such as Hong Kong’s Hang Seng Index jumped 3.26%, Taiwan’s Taiex rose 2.39% , Japan’s Nikkei 225 up 1.37% , the Shanghai Composite Index gained 1.30% and Singapore’s Straits Times Index edged up 0.84% to 2,874.40.

FBM KLCI were lifted by institutions buying of blue chips that pull the index to almost to 1500 level.

Yesterday, the index close above the 5d MA, the first time since the last 10 days. With the market at overly oversold position there is a sign of immediate strength a at around 1500 level with prices moving along the 5d MA unless bad news emerged from the West.

FBMKLCI stability

2011-08-15T00:46:00.000+08:00

Last week high volatility in the local bourse were accompanied by increasing volume traded. Before the sharp fall of FBMKLCI volume traded has been decreasing despite the index has moved from a low of 1474 in late February to July 11^’shigh of 1597.

I could inferred that the uptrend since February was not collective i.e. selective. The hard drop since mid July was precipitated in early August by high volume indicated support buying by government fund.

Most analysts expected next week will be a volatile but I see it differently as on Friday with strong support FBMKLCI registered a gap up and forming a small gravestone doji. The index has been on “no touch” of 5d MA for the quite a few days and only on Friday it almost reversed the situation. The coming week I foresee the index to tag the 5d MA moving within a much narrow range than previously.

If the high volatility did happen again due to US and Europe economic factors, the index will test the recent low of 1472.

Tagging The Dow

2011-08-10T23:46:00.002+08:00

On Monday, The Dow dropped a massive 633 points, its largest percentage drop since December 2008 and the sixth largest point drop in the history of the index.

The overnight fall for the Dow was followed by 24.85 points loss for FBMKLCI on Tuesday. .

The low for today found support at 50% FR (1420).

At New York, on Tuesday the Dow swung to its best single-session percentage gain in more than two years.

Consequently, today FBMKLCI recorded a higher close after three straight days with a lower close.

With 50d MA crossed 20d MA from above and prices well below the 200d MA it seem that FBMKLCI is very susceptible to any development in New York.

Any pullback from current downtrend needed a positive market development of New York bourse.

One week lost of RM65 Billion.

2011-08-08T23:10:00.001+08:00

The local bourse lost another RM33.76 billion in value today after the FBMKLCI fall below psychologically crucial 1,500-level and its intra-day low fall of 1476.24 almost touching current year low of 1474.38. The current total market capitalisation of Bursa Malaysia is about RM1.27 trillion. From last Monday, the market capitalization has reduced by RM65 Billion.

FMBKLCI within one month have fall to almost the year’s low from the year’s high.

For two straight day volume traded was twice the average 60 days volume with long and wide body hammer candles. This suggested that the market fall heavily in early trading of the day before buying mainly done by quasi government bodies an attempt to prop-up the market.

Noting that all short and intermediate MAs are negatively slopping and the 20d MA is trying to cross over the 50 MA from above any attempt for market recovery is a hard sell.

With all the external negative factors affecting the local bourse, the index need to stabilize. The market is currently at the strong support level of 1475-1480. The immediate resistance is at 1540 the 50% fibo retracement (FR).

Lower for 4 straight weeks

2011-08-07T15:13:00.001+08:00

R3	1558.52
R2	1555.72
R1	1551.30
Pivot	1544.51
S1	1544.08
S2	1541.28
S3	1536.86
Open	1529.94
High	1529.94
Low	1,509.37
Close	1,524.43

A massive gap opening on Friday, with FBMKLCI falling for straight 4 weeks. The first occurrence of four straight weeks with lower closing since market upturn in early 2009.

On the weekly chart, the index has been falling with increase volume traded. Having close below the 30 week MA, and the MA with a slight negative slope the outlook for Bursa Malaysia is not that promising.

The coming week, expected the index taking a breather with is oversold position. The psychological support of 1500 could be easily breach by next week or so. I am betting the index to get a strong support at 1475 level.

Rebound at 1500 might end at 1560 area setting up a possible head and shoulder pattern.

Filling the Gap

2011-08-05T05:43:00.003+08:00

R3	1560.62
R2	1555.05
R1	1550.08
Pivot	1544.51
S1	1539.54
S2	1533.97
S3	1529.00
Open	1546.87
High	1552.91
Low	1,545.69
Close	1,546.89

FBMKLCI moved strongly the first hour of opening moving higher toward the mid point of R1 and R2. It slip down and went flat before succumbing to selling pressure after lunch break to go lower of the day at above pivot. It closed near the day’s low forming a doji with long upper wick. The close is just below the long term down trend line

It clearly indicated the market is pushing to fill the gap but not forceful enough to do it.

With New York performing badly with the Dow Jones falling 4.3% and to the lowest close since Dec 9 2010, Friday market sentiment look bleak.

A weak performance on Friday will cause the 20d Ma to cross over the 50d Ma i.e. dead cross that will saw the market sentiment for the immediate term turn bearish.

Gap

2011-08-03T23:00:00.001+08:00

PpR3	1563.44
PpR2	1561.14
PpR1	1557.99
Pivot Point	1555.69
PpS1	1552.54
PpS2	1550.24
PpS3	1547.09
Open	1549.49
High	1549.49
Low	1538.95
Close	1545.10

FBMKLCI open lower than yesterday close with a wide gap just below S2. It sagged below S3 in morning session before recovering by lunch time. The bearish candle form a gap bar, a second gap within six trading days.

The two gaps that formed recently is similar to the two upward gaps that occurred in mid June (see the oval shaded area).

With all the three MAs having a negative slope, the market is expected to register a further fall but in the immediate term I am waiting for the 20 Ma to cross yhe 50 Ma that will indicate the market is moving toward a bearish tone.

Stalling Economy

2011-08-03T09:01:00.003+08:00

PpR3	1570.25
PpR2	1564.37
PpR1	1561.19
Pivot Point	1555.31
PpS1	1552.13
PpS2	1546.25
PpS3	1543.07
Open	1558.02
High	1558.84
Low	1553.39
Close	1554.85

FBMKLCI open above pivot point and at previous day close. It went up but just below R1 before stumbling down above S1. It close lower than open to register a small bearish candle. Yesterday candle is also a NK7.

With the index inability to cross over the 10d MA for two straight day and flat to negative slope for 50d MA, the index is being pressure for downturn.

Fundamentally, regional bourses have move away from worrying about U5.S. debt woes and are more concerns about a sluggish economic situation.

Major global stock markets stumbled badly, while gold hit a record high, as a report showing U.S. consumer spending fell unexpectedly in June for the first decline in nearly two years as incomes barely rose.

That followed data on Monday showing manufacturing activity stalled in July, which mirrored similarly weak reports from Asia and Europe.

Optimism on the Dollar

2011-08-02T13:51:00.004+08:00

Optimism that U.S. lawmakers will reach a last-minute deal to raise the government's debt limit and avoid a default push the USD upward.

EURUSD (eu) fall to 1.42 level during New York session yesterday. By early Asian session today, eu has inched up to the 38.2% fibo retracement. On the 30 MTF chart, eu is expected to move sideway with downward bias as the BB is constricting and the 21 MA hovering flat above the price.

The first eu trade is at bar A with an OB, 1st TP done at 1.42419 and SAR at bar B with indy's at extreme bottom.

Take a second entry for sell at above bar B, 1st TP (1.42727) was not reachable abandon the position after the fourt bar with twice OB pattern.

The gap is filled

2011-08-02T08:46:00.002+08:00

PpR2	1557.93
PpR1	1553.37
Pivot Point	1549.27
PpS1	1544.56
Open	1549.79
High	1558.49
Low	1549.43
Close	1558.01

FBMKLCI posted a bullish candle with an open at above pivot point and reached a high just above the Pivot R2.

The Bullish candle managed to covered the gap that was formed on previous Thursday. The bullish pullback met resistance from the 10d MA and uptrend line.

The pullback is also accompanied by lower volume as compared to the previous week. Any effort to move further upward required strong volume to overcome the negative slopping 20d and 50d MAs.

The 10d MA has cross over from above the 50d MA last week indicating weakening market. The pullback could retest the 50d MA for the second time and failure could be costly.

The previous downturn of the index registered a fall of 3.7% that occurred in early April and lasted for one month.

A healthy pullback

2011-07-25T21:57:00.001+08:00

The deadlock in raising the US debt ceiling raised concerns for a default in the US's credit rating and hurt the Asian market sentiment

Locally, the local bourse as indicated by FBMKLCI is still bullish with 50 MA above 200 MA and both are still slopping positively. Furthermore the ascending trendline is still intact.

Today the index fall but the volume traded is still less than the previous two days.

With 20 MA at neutral position, the index is being tested by the 10 MA.

The US debt problem has not affected the local bourse severely. Today fall in index is more of a breather from almost a 10% rise of the index last week.

US Debt Ceiling

2011-07-25T21:23:00.002+08:00

The lack of progress on US debt ceiling give the European debt crisis a breather. The market believe that a small debt deal will be put on the table with no default but has a negative influence on debt rating with possibility of US debt losing it’s AAA rating (probably by one notch) and as result US will have trouble selling its debt and therefore driving US interest rates higher.

USDCHF (uc) fall below the 61.8% retracement and trade just below the 0.815 level. On the 60 MTF chart the MAs is stacked and negative slopping, a reflection of bearish undertone.

My entry on uc trading on 15 MTF in the face of bearish uc sentiment start at bar 1 with OB candle and the inability fro uc to cross over the MAs. Short at the low of OB bar 1 with my first TP for 1/3 of my position at 22 pips (0.81020). Take profit at that level-0.810.

Put my stop at BE.

At bar 1 close below 1.81, with next bar show a small bullish candle with the high is lower than previous high. Bar 2 an IB bar is formed and the subsequent bar is an IB bar. It was follow by a large bearish bar showing a continuation of bearish tone despite the indy’s are at bottom range.

Bar 3 is a doji with indy’s looking to move up. Exit the balance of my position and enter for long at next bar when it cross over the high of doji bar(bar 3). TP1 at 0.80979 was not reached with bar 4 is a possible evening star candle. Bar 5 creating a bearish bar that I took a stop and reversed action for short.

The TP1 was set at 0.8052 (0.805 level). The TP2 was given at bar 6 with a PB at extreme low for indy’s. SAR(stop and reverse) with a long entry at the high of 6 with TP1 at 0.80718.

The TP1 is not touched with bar 7 forming a bearish OB. SAR with entry for short below the low of bar 7.

Weekend Rest

2011-07-22T22:57:00.001+08:00

The plan for Greece is sending markets higher across the board, with Nikkei up more than 1.2%, Hang Seng Index +1.7% and China 0.18%, following the pattern from Wall Street.

FBMKLCI close lower but managed to put out a higher high and higher low. Possibility market players taking profit as market take a break for a weekend. Traders attributed due to listing of Bumi Armada.

Technically, the market is recovering with 20 MA is flat while rate of fall of 10 MA slowing down. The index is testing the 61.8% fibo retracement at 1570.

Two strong days

2011-07-21T23:59:00.001+08:00

Another bull candle albeit a small one almost a hanging man, but at a high volume..the highest volume for the last two week. The immediate picture is the test of the 10d MA. It is slopping downward to act as the immediate resistance. Judging from the strength of the market the last two days with both candles closing at the top half of the candle, FBMKLCI has got the juice to get through to test the 20d MA and the 50% retracement.

A reversal from current correction.

2011-07-20T23:01:00.002+08:00

FBMKLCI managed to register a bullish candle with a close at previous day open. The low of yesterday was at 50% of Fibonacci retracement from a low in 6^th May to a high of 11^th July.

Today reversal is expected to continue to meet the downward slopping 10 MA before testing the flat 20 MA. The reversal upward of the index should be accompanied by high volume to pierce through the 20 MA and touched the upper BB and moved pass the previous high of July 11 to confirm that the bull that started 28^th October 2008 is still intact.

I am looking for initial resistance at 1575.

The gang of six less one

2011-07-20T22:54:00.003+08:00

Obama give support for a USD3.7 trillion deficit-reduction plan by the five remaining members of the Gang of Six to solve the on-going US debt ceiling talks. The announcement give some strength for USD during the New York session.

As a consequence the uptrend of GBPUSD (gu) was halted at 1.615. Tthe gu or cable was unable to penetrate cleanly the 10 MA on the 60 MTF and trading below the uptrend line. Early Asian session today saw gu moving between the downward sloping 10 MA and flat 20 MA. With 50 MA also moving horizontally, the direction of ug need urging of fundamental news.

For today, UK economic consist of MPC policy decision and data of retail spending.

My first entry for a cable on 15 MTF start at bar 1 with IB bar on inability of prices to pushthrough decisively over the MAs and RSI fell below 50.

Second entry for buy at bar 2 with price action(pa) of IB and Stoc and RSI recovery from the lower extreme. As the 20 MA is below 50 MA the buy position is a bit risky. Exit at break even as gu showed almost a hanging man candle at Bar 3 and followed by a large bear candle with its tail spike below 1.61 level.

Looking at the price action and the MAs starting slopping downward I employed the strategy of breakout of Asian session (24:00 GMT to 5:00 GMT-the shaded rectangle). The breakout target is at 0.618 of the Asian session high and low range as first target and 2nd target at 1.618 of Asian range. My short entry will be just below 1.61 level with first target at 1.6073 and stop loss at 1.6130.

The third entry is at bar 4 with a signal bar of morning star candle and the indy’s reversing from the extreme low.

EURUSD sea-saw

2011-07-19T22:36:00.002+08:00

During the European session, EURUSD(eu) is affected by the Greek distress and on US session Obama tango with the House of Representatives.

During the early session today, there was a golden cross between the 10 MA and 20 MA, and then price cross over the 50 MA from below on 60 MTF chart but unfortunately price than went flat.

THE eu also managed to penetrate the downward sloping channel.

However, eu has managed to cross the 1.41 and expecting to challenge the 1.415 level.

My first entry is at Bar 1- a PB after eu has failed to return above the 20 MA. Taking a sell position with target at 5 GMT (8:00 Broker).

A morning star doji and almost a PB, stop and reverse by short position for a buy. Position taken on indicators reversing from the extreme. About 1 ½ hour later , a golden cross with both MA sloping upward. A very bullish sign.

Gold is UP.

2011-07-19T22:04:00.002+08:00

Gold posted new record highs yesterday and close above $1600/oz, as debt worries in US and Europe. Investors are concerned that Greece may default on its debt, and countries such as Italy and Spain, who are also struggling with high debt levels, will get pulled into the crisis.

Meanwhile in the US politicians are struggling to reach an agreement on a deficit reduction plan in time to avoid a debt default before the deadline of 2 August.

Those are the issues that trouble the fx market and stock market.

THE STOCK MARKET:

FBMKLCI fell in 4 straight days to pierce through the 50d MA. It also penetrated the lower Bollinger Band (BB) on high volume.

The fall from early July is reflection of market correction in early January when the index plunge for 6 straight days. It then drifted further for more than two months. The sharp early January fall was more on profit taking after end of the year window dressing.

Thus, does the early July correction due to mid-year window dressing?

Technically, the market is still bullish with 200d MA underneath it and 50d is upward sloping.

The January correction pushed the index downward to cross the 200d MA from above and then mid March.

With the local market affected by US and Europe debt problem, it is pointing southward. I am expecting the downward move to take a breather in the next coming days. If the index keep tagging the lower BB than the correction will be quite sometimes.

Next: The Forex Market

2011-07-19T00:34:00.002+08:00

Due to my location, I will be trading between 4:00 GMT to 12 GMT on 15 min time frame (15 MTF).

Trade will be based on price action i.e. Inside Bar (IB), Outside Bar (OB) and Pin Bar (PB) with RSI (6 period) and Stochastic (Stoch 5,3,3).

Today we look at USDCHF or uc.

On the 60 MTF, uc is on the downtrend (below 50d MS). Price correction on Thursday/Friday carried it to the 50d MA and 0.82 level.

Today in early Asian session, uc gap down to Thursday low at around 0.8080 before moving passed 0.81 level easily and the uptrend during Tokyo morning session. The rebound should be moving toward 0.815 level and then to 0.82 level.

On the 15 MTF, uc 20 MA is approaching from below the downsloping 50 MA i.e. uc is the process of reversal from downtrending to uptrending. (Note: my broker time is equal to +3 GMT)

Signal bar 2, an IB with range 0.8122/0.81149. Entry at next bar at 0.8123 (breakout of IB high). Signal bar 1 is not taken as the next bar broke IB bar 1 at low. Price is on the upward since the RSI and Stoch are at low extreme.

TP1 is at 20 pips=0.8142. TP2 is at 61.8% of the Asian range (the colour rectangle)=0.8166.

Bar 3 is an IB at the top i.e. breakout of IB low is for short entry. Avoid it since uc is at early stage of uptrend. 50 MA upsloping on top of flat 50 MA.

Next entry is with signal bar at 3, an IB with range 0.81463/0.8139. Entry buy at 0.81563 on the next bar. TP on 10 GMT.

Hello

2011-07-18T23:09:00.001+08:00

After six months hiatus, here I am again here I am again. My analysis will be as simplify as possible and avoiding all those weird mathematical led indicators. It will be more on price action and the unsophisticated moving average. Maybe I will throw in the standard RSI and Stochastic indicators.

Let start with Bursa Malaysia FBM KLCI index:

The current downturn or market correction, since the index is still above the 50 and 200 moving averages started on July 8^th with a hanging man candle. A engulfing candle tag along that also imprinted a conventional Outside Bar (OB). A break to the low of OB suggested a time to short the market. The breakaway carried the index passed the 10 day (10d) moving average (MA) and found support at 20d MA. A small bullish candle follow but the 10d MA act as resistance. A small bear candle was formed and the candle is a NR 7 bar (i.e the high and low price range is narrower than any prior 7 days. There was a break of the low of NR 7 candle and price is expected to fall further.

As expected, the index drifted lower looking at support at 1562 and the 50d MA. For the coming days I am looking whether the support will hold.

Possible cable bottom at 1.5350

2011-01-01T21:34:00.003+08:00

On Xmas weekend, China raised interest rates for the second time since mid-October in order to curb the fastest inflation in over 2 years which hit a 28-month high of 5.1% in November.

The benchmark one-year lending rate will rise by 25 basis points to 5.81 percent and the one-year deposit rate will climb by the same amount to 2.75 percent.

Despite the market expected China to raise rates, the timing was surprising, as some investors had thought it was too late to move in 2010.

-Dec 27

According to Hometrack, House Prices in the U.K. fell in December by 0.4 % m/m - 1.6 % y/y in December with projections that house prices will continue to fall in 2011 possibly by 2.0 %

-Dec 28

9:00 GMT

The October US’s S&P/CaseShiller home price index fell to 145.32 from the prior month's 147.27. This was a YoY drop of -0.8% which was much worse than the anticipated change of -0.2% (prior +0.44%) and the biggest decline in December 2009. Additionally, 6 cities reached record low levels indicating that the US housing market remains extremely weak.

15:00

December US Conference Board consumer confidence was also a negative surprise coming in softer than the expected 56.4 with a print of 52.5 from the prior 54.3.

-December 30

13:30 GMT

U.S. weekly jobless claims fell to 388K, the lowest levels since July 2008. This was much lower than the market forecasts and a drop of 34K from the prior week's 422K indicating that the labor market is moving in the right direction.

14:45 GMT

The Chicago Purchasing Manager survey for December came in much stronger than expected as well with a jump to 68.6 - the highest level in 22 years - beating forecasts of a drop to 61 from the prior reading of 62.5.

15:00 GMT

In the housing market, November pending home sales unexpectedly rose by +3.5% MoM (cons. +0.8%,prior 10.1%).

-December 31, 2010 at 07:07 GMT

UK Nationwide House Prices Stronger than Expected In December, have come in at +0.4% m/m, +0.4% y/y compared to median forecasts of -0.3%, -0.4% respectively.

The growing worries about British austerity measures had a negative impact on the pound on the previous. This week which is between Christmas and the New Year when liquidity is almost non-existent. Big players can use these times to move the market in their preferred direction and then take advantage of these moves when liquidity returns in early January.

This is seen in EUR/USD which managed to have a sustainable upward move since Wednesday’s early Asian session. Comparably, the GBP/USD pair moved with high volatility for the first four days of the week. Only on the last day of the year, the pair was able to show a steep uptrend.

GBP/USD has moved between expected resistance at 1.55 handle and support at 1.5350 before a decisive uptrend break of 1.55/1.5550 resistance carried the pair over the 1.5650 and capped at upper 38.2 level.

With the sentiment looking to change from bearish to bullish, on the long term perspective GBP/USD is forming a base for a reversal for an upside move.

For next week, the first week of 2011 I am looking for support at 1.5466 with next lower support at 1.5350.

On the upside, the immediate resistance is at 1.5800.