VITROX

Vitrox, V for Victory...

Strategy: Wait and See...

TENAGA

Currently, trading range at 11.40 to 11.60.

Option #1: Buy at 11.40.
Advantages:
1) Promote the spirit of Capitalism
2) Uphold the integrity of capital market
Disadvantages:
1) Capital kena tight in.
2) Could be force to cut loss.

Option #2: Buy at 11.65.
Advantages:
1) Breakout point trader, ride with the turtle.
2) Flexible money management.
Disadvantages:
1) Loss of RM250 for a single lot.

COMMERZ - Fundamental play...

People always cannot stand the loneliness when they are out of the market... These few days, quite a lot people keep asking me, what to buy... what to buy...

Well, well... so here it goes...

Fundamental play... COMMERZ.

Buy - Sleep for 1 years - Revise - and Sleep again.

Buy? Sell? Hold?

Malaysian market is really defensive and strong these few days... Despite US down, the market still ok... Technically, the third wave is coming... The only question a trader might consider is... is this a small wave or a tsunami? How long? How fast?

Well, that is really a very difficult question to answer. For the time being, the only thing that we can do now, is be alert, speculate with care, with due diligence and behave ethically. We can only read the market, never to predict the market. As in these volatile period, any thought planted in your head will be a deadly weapon if the market goes against you.

Secondly, to be safe and play safe, i suggest do not put all your capital into the market... Anything can happen. The only time for us, as a gambler, to show hand, is to buy at deep discount. Else, no talk.

The Iran issue began to become critical... 2 missiles to Iran can cause the oil price to double to 120 (currently is 64). That, even no matter you are Tun, Dr, Mr M, Ah-Boo-lah Tan Sri, Datuk, King, or King Kong, will not be spared. No mercy... and see you below 1100.

Should anything bad happen, your reserve capital is the ultimate weapon that could ensure you to retire young and retire rich. Forget about Rich Mum Poor Mum, MBA, CFA, CMT or whatever heck it is...

Always leave a last bullet in your pocket... it is either for yourself or the enemy.

Interesting high volume doji

Very interesting doji formed today. The uptrend has been furious and fast. As i am watching the US Dow and NASDAQ, uncertainty indicated by a doji in KLSE compounded the issues. Bear and bull are seen fighting seriously today. Bull are saying, "hey, you know i am supported by XXX besar, dXXXk-dXXXk and XXX XXX politics?" Bull is trying to show that he has strong back-up and keep on stressing on issues such as "we are still fundamentally intact", "fair value is beyond 1300" as well as " please buy more as we need some donation for election". In fact, the secret weapons bull is having is very powerful - suddenly announce changes in policies and ambush from the bushes after ducking in the longkang for 3 days 3 nights. However, bear is starting to return, at least in the near term... US situation is really not good... and consumer confidence drops. Damn, this means small market like Malaysia who always shouting for Malaysia Boleh will be heavily impacted as we are focusing a lot on exporting. In fact, for the news on oil prices uncertainty, stock prices volatility as well as US economic condition, we should demand a higher risk premium. This means a lower stock prices. However, life is not always easy... People are trying to push up the prices by a perfectly manipulative and fast pace never receive required cooperation from the other party in oversea. Damn, the US consumer are saying they suffer from stomach ache and need to shit when the other party in another corner of the world is trying to cover up the shit (of coz, cover the shit, and then all of a sudden, let go the shit so that we can produce some shit eater in the market). It is a very interesting movie to watch... Probably, try to think on this, can anyone trying to stop a falling dagger? How to stop a falling dagger in a small market? Will the falling dagger become real? Captain America with a falling dagger and Hang Tuah with a flying keris, who is more powerful?

Complicated... Never dare to predict the market anymore... The best is sit down and watch movie... Probably, it is a time to go holidays...

What is the market now?

From purely technical analysis, the bull has return and gaining strength against the bear. Technically, speaking, the bull is testing the next strong resistance at 1280, and has quite a high chance to make a new high in the near term. Probably, targeting 1350 before election (assuming election comes around June). The concern for traders is the diminishing volume, which could suggest a contraction before continuing the uptrend.

As how technical analysis, no matter how technical and advance it is, is subject to failure when other factors unpredictable by chart exert impact on the prices and volume. In today context, it will be the possible war of Iran (while i am thinking unlikely), the government intention to pull out capital after good news to fund election, or even foreign capital to pull out their capital to profit take for any kind of reasons. Taking these into considerations, it is reasonable to expect the technical analysis to "koyak" big time in the next few weeks. Shall these unpredictable factors never happen, we should see each other around 1350 very soon.

So what is your advice? I am still 100% cash, and if ever i will return speculating in the market, i will only speculate with partial of the portfolio capital unless the trend has become clear. Pyramiding could be needed should the weather turn clear and bright once again.

However, i am pretty sure that, it is probable not to chase new high (unless you wish to sponsor money for the election). Malaysian economy, if we were to consider it from a global stand point; will be exactly a MESDAQ play. I am still holding that, we should wait for a strong support line to happen before jumping it. For those who already cannot "tahan" the uptrend and wish to ride with the trend, it is also advised that you, please jump in. It is probably a good lesson for you in the future, as to improve your emotional and psychological aspect of trading. Just do it... and learn from it. Your experience gained, will be directly proportional to the cash you bet on the market.

Something is going on...

There must be “something” going on… Despite regional stock down, we are up…

There must be “someone” behind the “something”… Else the “something” cannot become “something”… Kekekekekkee

And the “someone” must be “somebody”, if not, who has such a power to push the Index back to form a bullish white candle at the last minutes on Friday?

Oh, who the heck is the “somebody”, who has the ability to cover the huge gap to reverse the situation (which how the Thursday and Friday case were)?

And what is the “something”, which cause the “someone” to do “something”? I guess the "someone" really need money for the "something" and had decided to take it legally, by capitalizing on the investors' stupidity for from the stock market.

Hehehehehe… This is hell, welcome! (Reminder, just remember to get out right before the party ends)

My 3 cent advice:

Number 1: Always remember and ready to run.

Number 2: This game plan is to hit and run.

Number 3: Make sure you run faster than anyone else when the situation turnaround.

The Three Legs Bull

After being crippled and seriously wounded by a sudden and cunning bear, the bull 2007 has loss one of its legs in the battle. It is surprising why the bear stop its assault and return to the forest. One of the possible reasons is the bear is more comfortable to attack at night (somehow, hmm…, like a night-elf bear). It is now morning of the day and this provide a chance for the bull to come for circus presentation on the stage.

Despite losing a legs, out beloved PM, in preparing for the election, has specially designed a metal robotic leg for the bull (specifically, lembu cacat). The new leg has several high tech and advance powerful weapons, such as using of mass media to cultivate investment atmosphere in Malaysia, using of government policies to improve economics condition, providing incentives to various businesses sector, a move towards more open market policies and etc. Of coz, with the election coming in, the robotic sensors embedded on the high tech legs will also tend to ignore some speculation activities (by having less UMA), and thus, our publicly famous friends such as IRIS, IPOWER, DBHD, PMIND, MOBIF and etc could be back soon. Based on the inverted yield curve in US, which lead to a speculation that the US interest rates will be reduced in the future, the prospect for this bull is bright and encouraging.

According to the scientists and designers, the robotics leg is designed to charge towards 1350 and the name for this military mission is “GLC-play”. According to rumors, the powerful design is fueled by EPF petroleum. It is said that this kind of petroleum is environmental friendly and had saved life of many of the Malaysia mega-projects and giga-companies (Well, there are of course some companies not being saved during crisis. But we cannot blame anyone, because, in the first place, why not these companies which are not being saved are not using environmental friendly petrol?). Anyway, rumors remain rumors… Investors are advised to follow their own feelings, guided by hope and greed, to play in the market.

How about the bear? Well, the bear, although disappear, is not dead. As the bull is equipped with new technological advanced military weapons, the bear also need something to fight back. Obviously, the falling dagger being used last time is no longer powerful to damage the bull… I am guessing the bear will need a “flying keris” this time. The weapons for the bear are expected to be: US home equity loans, Japanese carry trade, China interest rates increase and nuclear weapons from Iran. Some of these weapons are very powerful… and if strike on the KLSE, will be a 500 points of damages. The problem is: we do not know when the R&D of these weapons will complete. And judging by Feng Shui and various ancient technologies such as “bomoh, evil spells and Thai-dragon-king”, the bear will need some time, probably 2-3 months to rest.

For the time being, look out for a red bull with the trademark of “Malaysia Boleh!” on its right front leg, which are charging frantically due to the limited time for it to complete its mission within these few months (1350, and probably 1500, and even 2000 if the herd get crazy and fated to a disastrous outcome). However, psychologically, focus your attention on a huge bear, which will strike suddenly at anytime. We are now in a war… be alert or else, you will be eliminated in the next bubble.

The bull is not dead, neither the bear...

Nowadays, many people asked me impatiently... Can go in? The bull is back? The correction over? Is it now the time? Can buy more? Should i take profit? So many types of questions...

Obviously, people are uncertain... So is the market...

The best answer i can give, probably is - the bull is not dead yet... but, neither the bear too. It is now not the time to show hand in the stock market. The reason is not because the market is sideways, or the market is bullish or bearish... It is because the cards of the opponents are not being revealed yet...

The are reasons for the bear to come, as there are also reasons for the bull to continue charging. Short term wise, i am waiting for the up trend to pull back and contract, a gentle contraction, as well as the contraction of volume in tandem with the stock prices. This is a highly speculative play, a gamble in fact. The KLCI, which in my opinion, should form a solid base before continuing the uptrend, but up to my surprise, the reverse is so rush and fast. I started to understand that probably the market need to be fast to continue the uptrend as to hit the 1350 as promised. The election could be just around the corner.

To issue a buy recommendations, still need some time... At least, when we are gambling in the market, we need to see a strong support line forming somewhere before we jump in. Without any strong support line, KLCI next bear strike will be very fierce and damaging. It will be no surprise to see it at 800 without a firm support and healthy base. Reducing the interest rates as well as promoting all kinds of incentives, promoting the markets will definitely exerting impact to the market... In the short run, i could see that these works. While the short run could be manipulated to death, the long run, the ultimate recession, will come in the end. Recession can never be avoided, it can only be delayed...

Anyway, if there ever a train come by this round to bring you to heaven, this will be the last train. The destination, for the next train... sadly to say, is to hell.

Stuck in the middle...

The market has been very uncertain nowadays, and that happen for some reasons...

Buy, or sell? Hold? Nobody know...

The US has enter into the era of stagnation, stuck in the middle... To increase interest rates? No way, the housing industry is already in quite a big trouble... Oh, so to reduce interest rates? Oh, No, No... The CPI is quite high and in fact, and worst, the act to decrease interest rates (particularly for a few times in this year) could sent a signal to investors that the economy is really in trouble. Both way, which i think, will cause the market to drop. The best method? Nobody knows... Only God know the future. Most likely, the FED is going to keep the rate unchanged. Until the damage is done, i.e., inflation starts to slow down and it is obviously that the trouble in the home loans stuff has spread around, then only the FED is going to reduce the interest rates. Anyway, i still maintain a short term "bye bye" in the Dow and S&P500 index.

How about Japan carry trade? It is over yet? How much damage could it done to KLSE? Again, nobody knows...

How about election? Is the election coming soon so that politics party will push up the price? Again, no body knows... Will PM push the market to 1350 as promised (even despite the global downturn in the stock market)? Again, nobody knows...

Signals are mixed, confusing and complicated. Somehow, ask yourself these questions... Is the Malaysia economy really good? Can the Iskandar project work (or become just another Cyberjaya or Putrajaya)? Why the stock market never move up despite good news on internet, newspapers and etc?

Trading is always like that... Signals are mixed and opposite opinions could even occur in a trader mind. The market has become so hard to anticipate and analyzed. Every people has their own opinion... Newspapers and spreading both good and bad news... Even the world reputable investment companies are telling different stories...

For now, the best is to sit back and hold your cash near to your ball. Some of the money are not meant for you to take (Do you see anyone keeping the "heaven money" that are intended to be burn for the dead people in their pocket?). Disregard all kind of opinions, any kind of advices, or any research reports by anyone. Focus on the fact... the fact that the market hasn't goes back to its previous high. It is only the fact, the price increase or decrease as well as the volume action, that are going to tell you what to do next...

Ultimately, only facts are real, opinions are just... opinions.

Slow motion crash

Sideway and uncertain market... Lets read some opinion from Kiyosaki.

http://finance.yahoo.com/expert/article/richricher/26878

Is this the reversal?

Is this the reversal? I bet not. The increase in price is not justified by the decreasing in volume. Besides, the increase in price is mainly leaded by some big cap stock, which is manipulative and demand more scrutiny from traders. In fact, i remain skeptical on the price move, as i judge that the increase of the price is more probable an act to cover the gap to resume its downtrend. However, i am neither encouraging traders to short the market, as i am not so confidence this time that the market will continue to move downwards. Wait and see is probably the best strategy. The market will need some time to cool down. The market need to rest for the sake of a longer journey.

OMG, the Mortgage Back Securities issues in US is starting a negatively occurring feedback loop now...

So, again and again... the bargain hunters will be either dead or crippled tomorrow.

No choice, they deserved the punishment.

Moral of the story 1: Who the heck so stupid that will sell share to you in a cheap price (unless the price of the stock is cheap for a reason, or they anticipated the price will go lower)?

Moral of the story 2: Nobody are stupid to short future as low as 1120 when the market is still 1160 in a large quantity... unless they have big junk of stock to sell in a fast and furious way tomorrow; i.e., some what like a 'protective put' strategy, short the stock and short future to cover the liquidity cost with the gain from future. (Hmm, this lessons will be taught in more detail and in more practical sense tomorrow. Investors are advised to learn and watch carefully how the stock drop and finally converge with the future spot price)

Moral of the story 3: Stock market is a gold mine as they are always suckers the bargainers in the market. Don't agree? Just calculate the volume and guess how many suckers bought stocks around 1250.

Note: This applied particularly in a heavy volume downtrend that depict high opinion divergence among market players...

!3 March 2007: Tonite we party, tomorrow we success...

Although the strike of a fast and furious bear is never certain tomorrow...
It is highly possible...

So, it is now the time to go party!

Who lets the bear out?
Oh, oh, o... o... oh, oh, oh!
Ao, ao, ah... ah... aoh, aoh, aoh!

Whoe lets the bear out?
Oh, oh, o... o... oh, oh, oh!
Ao, ao, ah... ah... aoh, aoh, aoh!

God is a girl, do you believe me?
Oh, oh, down down down down!!!
Oh, oh, bear bear bear bear!!!

Tonite we party, tomorrow we dine in the red ocean.

The bear is just around the corner...

While the exact timing of the bear is unknown, and there is not definitely a 100% chance that a bear strike will happen in the near term, the diminishing volume sent a sense of danger to speculators. The bear could be just around the corner... Despite i am viewing that a bear will happen soon, but the index keep being pushed up (and today is already the fifth gaps), until OSK research is nearly confirming a bull run is returning, i am still holding that, the bear will come in the near term.

The story never end just like that, the second episode is coming soon.

To be continued......

Heheheheheheheheheh.........

The technical rebound could have come to an end

The technical rebound could have come to an end

The last week was indeed one of the happiest and satisfying weeks for the retailers after the sudden bear strike. However, the favorable short term trend could have come to an end. For those who have not profit taking on some of the fundamentally sound stock, you could have to consider doing so.

Technically speaking, the technical rebound is weakening last Friday due to lower volume. The intraday chart is clearly showing weak price and volume actions when KLCI reaches strong resistance line at 1200. Besides, the technical rebound itself is too fast, and it is highly likely that speculators would like to lock in profit gained from the technical rebound during the week. Despite lower volume which indicates danger, the strong opening for everyday in the past week, which had produced amazingly four gaps on every morning of the white candle, is unhealthy. In my opinion, this could be highly likely a tactic used by the foreign investors to spike up the price for distribution. Definitely there are still some foreign investors, hedge fund particularly, who are sucked in the strong downturn. As such, while not predicting the next trend (even though it is anticipated a down turn again the next week), speculators should be advised to take profit and stay sidelines with cash. The Friday doji that signal a possible reversal point is already a strong valid reason to leave the market. Again, safety first, make money later is always an important part of the trading game.

Looking forward, it is reasonable to expect that the carry trade effect is not over. Assuming the human behavior is a normal distribution, it is reasonable for us to expect there are still some carry trade speculators, driven by greed and hope, still in the market; be it intentionally or being forced to do so. Besides, US economic problems and uncertainty in Middle East nowadays should also demand a higher risk premium for investors, which mean a lower stock price in the near term. Moreover, March is also often associated with low price, where the possibility of China to increase the interest rate compounded the problem.

Patient is everything now. Stock timing is nothing and stock selecting is also nothing. Patient is everything now. The sound support line for the next boom hasn’t been formed yet. The bottom of the seabed is still unpredictable. It is now better to hide in the house like a tortoise to watch some nice shows in the market. Ultimately, it is not the thinking, but the sitting that make the money. To rest, by itself, is also a kind of investment…

The worst is yet to come!

As of today, 7 March 2007, KLCI rallies strongly and injected hope and emotion into many of the retailers. Value buy is now a sophisticated and hard core value investors who believe that they are buying bargain stocks is buying fiercely (particularly on 6 March 2007), creating large volume of trading, which indicate a divergence of opinions between market players.

The buyers are confident, due to many reports in newspapers that are showing a fundamentally good and economic prosperity of Malaysia, either intentionally or not. Rumors sent out to investors that the carry trade effect is over, market is rebounding and the future of the stock market is bright. In fact, it is often argue by some of the hard core investors (who claimed themselves value investors) that now is an huge opportunity to hunt for bargain stocks.

While it can't be denied that there are bargain stocks in the market, the strong forces behind the bear market should also never be neglected. The previous huge down turn with high volume, probably is an indication that many of the value investors are confident and buying many of the so-called bargain stocks. Judging from the volume alone, it is reasonable for us to believe that many of the so-called value-investors are now dead or crippled. While some of the value investors are still defending the support line of 1150, 1110 and even 1000, the force of these people are already weaken. The previous value investors, had lost their power, if not confidence to influence the market. Their money is trapped and thus i believe that the buying power of these group of people in the stock market is diminishing. As indicated by the chart, the strong rallies is actually not so strong, if compared to the shape falling knife, with huge volume and momentum. While a bullish engulfing inject some element of bullish forces into the market, the reverse hammer formed today in the market is also putting more down trend energy into the market. Judging from charting alone, if ever i were forced to predict the next move, i will say it is a bearish trend (while, obviously, at these volatile time, i think not many chartist who are brave to predict the future as the future is really hardly predicted).

Well, talking economics, is our economics really good? Gosh, oh my god, if you ever had your own eyes and brain, it is not hard for you to notice the poor economic condition in the country. Just go around and ask, are businessmen making damn a lot of money? No! Many of them are doomed, particularly those in property and construction sector! Some more, if is said that the trade of Malaysia had increase by 10%, what the heck is this misleading figures is? Malaysia export had been dominated by oil, palm oil and manufacturing... and these products in the previous year had increase in price dramatically, roughly by 100% from the low of past few years. The price increase itself, is the root cause that cause our country trade to increase by 10%! In fact, the real economic environment in Malaysia is perceived (my own opinion) as deteriorating. Further, the concentration of export in the three sector is also another unhealthy sign of the country economics.

Well, then is the stock price now reflects the current economic environment? Huh, not a concern for me. Dumb people are too many, and their combined forces in the country is the force that could influence the stock prices. Fundamentally speaking, i believe the PE is now between a normal (relevant) ratio. However, please be reminded that, the force is now down, and any bad news on the world could cause the investors throw the stocks frantically, crazily and irrationally (Hahaha, this is what really happen when the fundamentalist that buy at 1250 with all their money, and a frightened investor transact a deal at 1200, so gone the fundamentalist money). As the trend is now down, it is often smart to not buy the stock at these periods. For those that haven't profit take (if ever there are still profit), i will advice you that to take profit. A bird in hand is more than two in the bushes, do not risk your money, and if you wish to gamble, there are plenty of opportunity after the storm. The storm is now haven't ended yet, the worst had yet to come...

The Disaster

What goes up will come down; nothing can be more truth than this. 27 February 2007 was a day in history that teaches the investors a lesson on this.

Before that happen, rumors and tips were everyday, everywhere and everybody. The stock market seems to have a bright future and had become a big casino for almost everyone.

I am to record down the reasons and the ways that help me anticipated the turn of the market at 2:30pm on 27 February 2007. The market will repeat itself in the future. This is a record and an essay written to communicate to myself in the future.

Signals that catch my attention to a big correction:

1. A parabolic rise of the KLSE and other index (particularly on China and Hong Kong). New high on the stock index is already a common term in the newspaper. As stated in the art of war, in the time of war, think peace; in the time of peace, prepare for war. The bull is too strong for almost half year. The relentless rise without healthy correction is a clear divergence signal to traders.

2. Volume is rising beyond history high. The high volume, often, if not always indicate the turn of the market. The highest volume achieve during the first trading day of CNY 2007 is a warning signal that demand every traders attention.

3. After the warrant play, the MESDAQ wave comes into the game. MESDAQ is often a curse of the stock. When these rubbishes are also rising, the end is not too far. While not predicting an exact period of the end, at least, the focus of our mind is sharply on the turn of the market.

4. More and more retailers (specifically, non-professionals) are joining the game. Remisiers start to become so busy that do not have time chatting with us. In a loser games, if retailers are also winning, nobody is losing. This condition will never last long. Those players that are supposed to be the suckers of the game had become big time winners, what the heck of the world is this.

5. Irrational exuberance. The high volume and crazy rising of all stocks (yes! Almost all) is indeed irrational. I had been tracking with pen and pencil on the volume and for so long and just in recent days, I had to use a “k” as a basic thousand unit in recording the prices and volume actions.

6. The leaders are losing momentum. Many leaders that lead the wave are started to lose momentum even before the CNY. While this is never a clear signal to issue a “sell”, it is indeed something that demands us to become cautious with the market environment. If the leaders never regain their momentum, it is often the time to say bye bye.

7. On 27 February 2007 itself, the extreme signal that trigger me to dump all stocks at whatever price, was the extreme advance/decline counter. 50 green while 1110 red which occur in an anticipated correction. To double confirm, top volume ended with 10-15% loss. The reason for the huge adverse condition is never known yet, but this is too clear a signal to lock in profit. The previous huge bear was started in this way as well. Compounded with the factors which I stated above, a “sell” is almost 95% a correct choice.

No bear started in the same way exactly, the next bear could have started in a different way, and we will have other signals to capture the next bear and lock in profit.

Only after some days, the analysts so called reveal the reasons of the bear. While obviously, they are bull-shiting after the crash, I strongly appreciate their effort for trying to relief the pain among retail investors. The suspected reasons are:

1. Market crash in China after prolonged Bull Run. This trigger so called negative feedback loop. The reason for China stock market crash is possible capital control and deviation of stock prices from fundamental.

2. After Japan increase the interest rate, the foreign investor that are dealing with carry trade reduce their equity exposure in expectation of further hike in the interest rate.

3. US expectation of economy slowdown, ermm, Alan Greenspan again with “possible but not probable”.

4. The market wants a correction. This is a healthy correction!

5. Well, damn a lot of reasons… anyway, the rest are just to attract the suckers to go into the market.