Bull Market Rests, KLCI Drops -27 Point 8/8/2014

Posted by Kris | Sunday, August 10, 2014 | | 0 comments »

The chart above has NOT reflect the -27 point fall on 8 Aug. 

KLCI drops -27 point (solid black candle) and the bullish trend upwards since Feb 2014 has been broken. It has now turn bearish. It is the first solid drop for 2014. On 17 July, it was starting to turn bearish because it broke the simple 20-day moving average. 

4 major global issues are in play and getting worst day by day.

A) Gaza vs Israel (Escalating tension as ceasefire is broken. Looks like going to be a long conflict)

B) Ukraine vs Russia (Rebels seeking Ukraine entry back into Russia. Sanction imposed on Russia by the US and vice-versa)

C) Irag & Syria Vs ISIS insurgency (Unrest, up to the point that US ordered military strikes to save its citizen, whatever that means)

D) Ebola virus infections is spreading & getting worst with high mortality rates

Locally, political issues regarding the Menteri Besar Selangor post is getting hot as the current Menteri Besar, Tan Sri Khalid Ibrahim just got fired from the PKR party due for his refusal to step down as MB. Remember Selangor is one of the richest state in Malaysia beside Penang, so alot of things are at stake here politically.

Nevertheless, the politicians can bicker all they want but it is every Malaysian dream and hope that the rakyat can be well taken care of. :)

Too many global issues with unpredictable results, expect rocky stock market during August & September.

Now I am 50% in cash, as I took profit 2/5 stocks before the 8 Aug drop a few days earlier. (As I feel that the market was particularly weak. Maybe I am lucky? or I just sold off too early. Only time will tell.)

P.S And I think with the refreshing and welcoming heavy rain during these few days, the El Nino effect may not be as bad as one might expect. So the bullishness on palm oil related stocks should cool down also.

Nevertheless, I don't have any palm oil related stocks in my portfolio.

I bet there will be a lot of people screaming buy buy buy as DJIA manage d to go up +185 point last Friday even with the global crisis developing to the worst case possible.

My friend is still bullish while I am still pessimistic and expect more draw-down to happen. If there is chance to lock my profit, I will do it in the coming 2 months. Time to take a break also. 

1776 will be the critical support region for KLCI.

Happy Hunting :)