Tuesday, November 4, 2008

Market Trend: Urgent Update...

Did some calculation.. So I thought it might help to give an update here.
KLSE Composite Index broke through 905 level this morning and went through a correction to close at 905 level. First, the 905 level in my calculation is the strongest resistant level. Once breached, a correction would occur. KLCI did correct and bounced back to close at 905. From my experience, when we have an intra-day correction, market is bound to attack higher. That's what I call 'momentum'. Market did an intra-day correction and when the recovery step in, we get a rotation in stocks play. Very systematic. Play is still on. There is no trap set yet.
Like I have said earlier, fast rotational play is one of the sign to a trap is being set. Watch out for that over the next two or three days for confirmation. Immediate resistant stands at 920 level. I believe it will be breached with ease to test the 951/952 level.
Remember Nov !2th... Will keep all of you posted. Trade if possible but must move fast with the flow. Any 3 consecutively days of rotational play means that a trap has been set. That should be the key. Overheating volume would be another concern.
Good luck and trade cautiously.
Update (07th Nov 2008 7:57am)
Something crossed my mind this morning while driving to work. Something for us to ponder on. I noticed the Yen has weakened drastically against the USD. I do hold this belief that this subprime turmoil was the creation of yen carry trade. Cheap yen's loan created excess liquidity. And excess liquidity created easy credit. And when yen carry started to unwind, Yen strengthened against the USD and at the same time, punctured the subprime bubble. Thus, came all these adjustment to fill in the vacuum left by the unwinding of yen carry. Could this weakenning in Yen against the USD indicates the emergence of yen carry?
I would like to think that there is a possibilty. Why not if it has become so cheap for them to come in and rule the world financial scene once and for all. One economic war, indeed, where victim's pocket become the target. Not life threatening at all.
If what I think here brings truth, we are in fact in a new era.. an era where it requires us to adjust accordingly to the whole new concept. And if it is true to my criminal thoughts, then we may have a good run ahead of us. Keep your eyes open...
Wait at least till after Nov 12th. This run-up could well be a fireworks finale to mark the end of this cycle..

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