Talking Stock With The Doc

This Blog has been created for the purpose of sharing my ideas on investing on Bursa Malaysia using Technical Analysis. Stock market investing is a science & TA a scientific tool used by investment professionals. TA also has its sceptics but this is an oportunity for you to follow TA based investing ideas. So welcome to my blog and may you "Live Long And Prosper".

Friday, February 09, 2007

The Doc is Back

Hi everyone,

Yes I am still alive & kicking. Been very busy as I left UK in Oct & am now back in KL. The transition was a busy period & I also started on a major contract immediately when I arrived, so that has kept me busy. Unfortunately I am still very busy so will only post occassionally & that too only on the CI & Futures, sorry no time for stocks.

I have been following some of the postings & am very pleasantly surprised that we have a very active Futures Blog here despite my absence & none of the other sites have it. Hahaha someone once asked on the chatbox if I was still alive & Isaac was wondering why I am MIA for so long. Sorry guys just busy with work thats all.

The reason for my posting is I think the market has reached a peak & will probably correct very, very soon if not today (Friday), then it will definitely fall after CNY. The magnitude of the fall is hard to tell but probably it will correct to one of 3 levels (See the 3rd chart):
A - Fibonacci retracement 0f 23.6% i.e. Jan 2007 low of 1,164; or
B - Fibonacci retracement of 38.2% i.e. Dec 2006 peak of 1,103; or worse case scenario;
C - Fibonacci retracement of 50% i.e. Dec 2006 low of 1068 to 1080.

The reasons why I think it will fall are:

  • I see a Hanging Man pattern at a high resistance of 1,242 yesterday. Next resistance is 1,278 but its possible that will not be reached. If it is then that will be the high point.
  • In the Futures Vol has been falling despite index rising - such divergence is indicative of possible correction
  • There is also divergence bet Futures Vol & KLCI Vol, one is falling but the other is rising to record highs. It is not good to have such divergences esp. when we are reaching record highs.
  • There are far too many good reviews & mega predictions by all kinds of analysts recently. 6 months ago no one had a good word abt Bursa, now everyone, his uncle & the monkey are saying such great things. Either everyone was blind & just got back their vision or they are all bullshitting us & talking up the market so that their clients can sell high while all the poor uncles & aunties are jumping in. Generally this has happened at ALL market peaks from the 1980s to now (I am old enough to have seen it all). This is a sure sign that the current bull run is going to take a major correction. I have fallen for the BS before & lost everything I made in the run, so I am now older & wiser.
  • Finally all the uncles & aunties are at the brokerages buying everything in sight (hence the high volumes). When that happens, you can kiss goodbye to the market.

Well here are the charts, but make up your own minds, do your own homework, be very vigilant & careful. Happy Trading & good luck.