Tuesday, November 4, 2008

Market Trend Through The Eyes of Cycle....

Equity markets around the globe has risen remarkably from their lows after a Fed move to reduce the interest rate coupled with the US general election which is schedule for later in the day Eastern Time.
Do this equity market improvement signifies the end of the credit crunch problem? Is the worst over?
Despite all the desperate attempts by world leaders to plug this rot, let us not be swayed by the recovery in global equity markets. Many negative factors remain. Slowdown in global economy cannot be ignored. Serious damages has been done worldwide with the recent plunged in equity and derivatives markets. The magnitude of these damages cannot be ascertained. But a layman rough estimate could send chills down your spine.
In other words, uncertainty still looms despite the fact that there are serious attempts to address this major crisis. Its still too early to tell. Best is we may avoid Depression but a severe recession is definitely inevitable.
Now the interesting part... the local front. Remember my postings on cycles? We are now at the tail-end of another cycle which is suppose to end on Nov 12th and after that we would embark on a whole new cycle. That should roughly explains the stirring actions that have been churning over the past trading days which came after a drastic margin clearance force sale. There is an unseen hand behind these movements. Familiar play pattern to me. The same group who created the corridor and oil and gas play. Powerful group and this time they target second liners like Genting and IOI. The rest just follow the trend.
My advice is to exercise caution as we head into the next cycle. This is temporary. Signs to watch are quick rotational play and dwindling volume. When you see any of these signs, run for your life. One correction can be expected to today or tommorow. Stay on alert come next week. Trade is posssible if you are sharp. Levels will be provided later as I have been out of touch for quite awhile now.

2 comments:

AmyC said...

Have a little cash in hand and waiting for the right time to pick up some cheap blue chips for keep. According to Mathias Chang KLSC may drop to 600 points in 1Q 2009. Should I wait till this level?

Thanks for your write-up, enjoy reading your blog.

TheWhisperer said...

AmyC,

I would suggest you wait for another cycle to pass us by.. Too many uncertainties involved here.

Lets not think about levels. There ll be signs before every moves.

Do check this blog once a while. I am a bit complacent at times.