The Great Expectation Of KLCI 2011

Posted by Kris | Sunday, February 13, 2011 | , , | 0 comments »

Not sure how many of you guys read the book "The Great Expectation" by Charles Dickens. It is a story about Pip's great expectation to become a gentleman (he suddenly inherited a fortune from an anonymous benefactor) to win the heart of Estella but fumbled along the way because of his spending debts and the rejection from the cold heartlessness from the girl that he admired.

The last few weeks really revealed a weakness in the current KLCI market run.The last thing we are afraid is that might triggered the start of a bear market.

The last remaining huge catalyst for the stock market is the upcoming election. This is something most people are expecting with great hope to boost the KLCI to new highs. The problem here lies with the expectation that alot of 'goodies' will be sent out to GLCs. Hence, there is a alot of recommendation to buy these counters.

However, there is a possibility that the election effect has already been baked in the current stock market levels. So like in any stock market environment, always remember to BUY INTO RUMORS, AND SELL INTO NEWS.

I remember at one point during the last US presidential race, I was expectating a bullish DJIA in the days leading to the election date. However, the bullishness evaporated as the countdown nears. Will this happen to the our KLCI market also, since it is expected that the market correction phase is now in progress.

From the blogs that I read, some investor/retailers/traders are liquidating their positions into CASH while waiting for the market conditions & directions to be clearer in the coming days.

So dear readers, what is your current position in the stock market?

A. Accumulation  & bargain hunting
B. Selling into a CASH position
C. Do nothing

For me, my answer is B. As i am in ~50% CASH position as detonated in my tweets. Something triggered my fear button the day before the great bleeding begun & i begun selling. Called it gut feeling or what I don't really know..