Bearish January 2016

Posted by Kris | Sunday, January 24, 2016 | | 0 comments »

Bearish Market




The market for this few weeks have been very bearish. Here are some notes that I captured & observe.


1) Oil broke new lows to ~USD27: (who can expect this to happen when it was USD100 a few years ago, where everyone was shouting we were running out of oil reserves!)

Really a problem to oil exporters like Malaysia. Alot of VSS happening to O&G related companies. Even the mighty PETRONAS is impacted, issuing an internal memo (got leaked to social media) for its employee to brace for headcount reduction, expense reduction , etcs.

Even the Bank Simpanan Nasional issued a internal (got leaked again) directive to stop approving credit cards, house loans to O&G related employees, particularly targetting contract workers. For non-contract workers,  they stil require strict screening from HQ.

Our national budget 2016 was done in respect to O&G royalties with the oil price at USD41, i believe. 

So our Government decided to stop all new application for JPA scholarship with ignited a heated negative feedback from the public, since all other government department particularly the Prime Minister Department budget did not get cut and it is one of the department whose budget is ever increasing YoY.

2)  DJIA, Hang Seng, SSE Index, Nikkei all break new lows this year.

Nikkei technically is in a bear market, since the index broke new lows. I believe that most of them should have broke their support levels.

Our beloved KLCI is nearing the 1,600 support level. Maybe there is some resistant to fall beyond it. It closed at 1625 last Friday.


3) USD/RM hit a high to ~4.40 during the market turmoil.

Today it close at 4.27. Somehow help by the oil price rebound. 


4) Even export related KLCI counters got impacted.

The overall market condition is bleak at least the past few weeks, hence not unexpected that even export related counters (perceived to profit significantly due to revenues earned in USD) got dumped too.

5) The call/put KLCI warrant were NOT VIOLATILE in the TURMOIL.

The call & put warrant did not see active participation during the turmoil. The premiums did not spike drastically like last bearish move to the <1600 font="" levels.="" nbsp="">

It looks to be dampened down purposedly. It will kill those who take a quick punt on the call & warrants that is nearing its expiring date, where the premium is low and supposedly will track the KLCI index in a correlating manner. But then again, BE WARN, the KLCI index is easily manipulated. Hence this is a high gain , high risk bet!


At least for Q1 2016, the market is still very bearish. 

Maybe CNY 2016 (The Year of Monkey) coming soon will turn the SHEEPISH market to a joyful jumping uptrend Monkey-ing market. :P

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