Raging bulls on both sides....

FCPO

Picture 1, was what I forecasted on 23rd October 2014 that the market would move upwards for the coming weeks. With a beautiful wave and at that time forming the C wave, I targetted it to reach 2293 at that time.

Picture 1

Picture 2, shows that my forecasted target had achieved on the next week after Picture 1 was done. Hence, BINGO! :). It closed even further and closed above 2300 which is poised to give bulls the cutting edge now.

Picture 2

Let's not forget about Soy Bean Oil, Picture 3. As we can see that Soy Bean had also had a big drop and it has been sideways for a while consolidating and had a big break out last week. Nearest target should be 36.57. Breaking that would be all the way to the next target 39.85 and etc etc.

Picture 3

Picture 4, shows that bulls hare going crazy after the last big drop and it has probably taken control now. Breaking 61.8% or 1845 level and now turning it to a support, shorters will definitely be fried for lunch like KFC chicken if they are not careful.

Picture 4

Left off posting anything here for a while. Really had some shifts in the market and we had big swings too.

Anyway, good luck and trade at your own discretion is always the best! :)

Similarities? You decide...

US CBOT Soy Beans

FCPO

I'll be focusing on FCPO more often as it has a better trend pattern than FKLI and also frankly, kinda caught up with work so won't analyze FKLI so much. 

Today's post is gonna be real short. My question here is simple, do you see the similarities? 

So, you decide and plan your strategy. :)

Good luck.

Do I "Play" the market

This was an interesting question I had over the weekend when I was in Genting relaxing with my better half. "Oh u PLAY the market?". I had to pause a short 2-3 seconds to fire up my "intel quad core" brain to search for an answer. Well, of coz, I had to look up deep for a diplomatic answer. After all, he was a friend of mine. 

So my answer was very simple and I answered; "I don't play the market, I trade in the market". It may seem like a vocabulary lesson here but as they say, "what comes out from the mouth is a process of the mind." I've witness people, they think of the market as a "get-rich-quick-no brainer-field" and their "jobs" are the "serious" thing that their doing. To a certain extent, yes, their "jobs" are still their main source of income and they should be serious in everything they do there. However, that doesn't mean the stock/commodities/forex/Bonds/futures and etc markets are a place of "fun". Well, maybe to some people who does this for a "hobby" or fun but 99% of the people in there are just as or more serious than what they are doing.

This is extremely true because I've witness people who thinks he/she can get rich when they enter the market right away..and when they don't make it (which they will most definitely will not make it) start cursing about the market saying it's dangerous, it's risky and the public favorite, it's gambling. My question to them, how long did u study in the university to be an entry point engineer? How long did u study before you became an entry point IT consultant? How long did u study to become an entry level doctor? 3-7 years (maybe 7 for medicine field). And you expect to "make it big" in the market after some so-called book that you read or just a weekend seminar? I'd say you're better off going to casinos then. The thrill is higher there. 

Many people don't realize that it's not the market that is risky. It's the person himself/herself that is risky. Doing something without the knowledge is crazy and definitely at the highest risk one could ever be in. Every trade I make in the market, is a series of calculated risk and reward ratio at the highest level of seriousness I can ever be. It's like me in a relationship, I definitely don't play around in a relationship as I'm serious right to the end.

Hopefully all that, I hope I did answer my friends question. 

Divergences Alert!..But there's still room for the current movement..

Well, simply put it, it had been rough sideways trades for both markets last 1-2 weeks. With issues on Ukraine war tensions and also the crops for Soy Beans are expected to increase with dry spell weather, it had made the market eratic and jumpy, trading on a difficult sideways range. Nevertheless, as we all know that after a sideways movement, a trend will follow..but which one? Let us take a look at these markets:

FCPO

FCPO had been in a downtrend since 11 Mar 2014 and started to do a crazy sideways range trading on 9th April 2014. Nevertheless, there might be a possible bullish divergence forming but has to let the price press down further before the full bullish divergence is formed. As we can see from the chart, prices are dropping while the MACD-H may have shallower curve. The red circle indicates that the 2nd downward curve has yet to be formed and hence it is quite likely that the FCPO may head southwards towards stronger supports at 2535-2540 and also 2490-2500. Stochastics had been heading downwards eversince 29th April 2014 and a gap down on 2nd May 2014 had gave the bears the power. Fibonacci 50% level is at 2526-2530 which can also provide a critical support level before it heads for the 61.8% level at 2434. Candlesticks are still below 12,22,32 EMA and no crossings of the EMA lines had taken place which means the selling pressure ought to continue for a fair bit of time more. 

FKLI

As mentioned earlier, Ukraine tensions had made it a priority in markets beating upbeat job data last week in the USA. The historical high at 1877 is still left uncontested and it seems that 1871.5 is the highest it could go. Candlestick pattern today shows an imminent engulfment that erased all gains from the previous 4 days and  Adding to that, there is a clear bearish divergence between price, MACD-H and Stochastics. However, since it did a pretty big drop today, there may be some rebound first in the morning and then later on continue with the trend.

Personal View:

FCPO: The market may resume the bears a little while more before any bullish divergences may show. Hence, there may still be room for shorting but always have your stops in place. Be ready and alert the market starts to rebound. Place urself full of strategies where u can just switch strategy there and then.

FKLI: I would look for positions to short. Hence, short at strength. 

Time to move back to its opposite direction...

Both markets have been moving at opposite directions either retracing from gains or rebounding from drops. Either way, I believe both markets will be going back to its previous directions and here's why:

FCPO

FCPO had literally erased all its gains that started from Feb 10 2014 but it seems to be bottoming out now from 2600 strong support with a hammer head candle on 3rd Apr 2014 and 4th Apr 2014 showed a pretty convincing likely bottoming out. Stochastics had already turned upwards since 12 Apr 2014 and MACD-H are showing shorter histograms which means prices and movements are ticking upwards. 2691-2700 will be the resistance and breaking that will lead back up to 2917.

FKLI on the other hand takes the other turn as there is a seemingly indication of a bearish divergence in price and MACD-H. With foreign markets which took a slump last Friday 4th Apr 2014, FKLI and KLCI may set to see some retracement. Volume decreases on the rise which also indicates that traders and investors are losing their appetite on the bulls. Stochastic lines have met and is already at a very high point which may indicate an overbought level. Nearest support would be at 1844-1845 and 18477 as its all time high and resistance.

Personal View:

FCPO: There should be some consolidation but 10th Apr 2014 Production and export data is crucial. Hence, expect some roller coaster ride before the trend continues.

FKLI: Be prepared for retracement. There may be a small push first before it consolidates to retrace. 

It's a great run guys, gotta close up someday. ;)

Well, the title of this post came from the movie "The Devil's Advocate" where "the devil" told Kevin Lomax (Keanu Reeves) in the toilet on his winning streak that it will break soon. Seems the same way, more for FCPO than FKLI. With the Ringgit firming up, weaker soy bean activity and the very very marginal increase in Feb 1-.25 export data, FCPO is likely to continue south-wards for probably this entire week. Nevertheless, on the overall trend, it's still a a very nice bullish movement. FKLI on the other hand seems to be moving upwards with slight knee jerks movements. Regional markets took a slight retracement yesterday except for Nikkei which went positive by 213 points. Hence, it would more likely be a sideways but upward bias for FKLI

Let's take a look at the charts for the technical analysis part:

FCPO

As mentioned, ringgit firming, very very marginal increase in export data, weaker soy bean activity yesterday. MACD-H is tracking lower and shortening its bars indicating that prices are slowly correcting while MACD lines are flattening and looks likely to curve down. Stochastics had already crossed down with a substantial number of volume and higher open interest which indicates support for the retracement. Candlestick patterns showed lower prices since Monday and yday with a "graveyard doji" like candlestick, shows that prices could follow down further today. Nevertheless, prices had been going on smoothly upwards on the trend line and the bullish trendline is strongly in-tact. 

FKLI

Like FCPO, FKLI's bullish trendline is still strongly in tact. and with higher lows showing from the past 2 weeks, shows that prices have a strong movement upwards. However, there will be short knee jerks where prices will slump lower but that's a good opportunity to buy and hold. Prices are above all EMA's (12,22,32) and is poised to pick up more steam. Yesterday and today shows more volume on a higher price but both of these days but with doji candle patterns which could indicate that traders are waiting for a confirmation, probably in regional market news. Stochastics have retraced and seems to continue upwards and cross back up. MACD lines have crossed up and moved back into the positive region while MACD-H shows a higher bar supporting the bulls.

Personal View

FCPO: For this few days, take shorts on strength. Watch supports at 2700 and 2690 as it could probably retrace to these levels before continuing the bull.

FKLI: Buy on any weaknesses and hold. Follow buys at 12 and 22 EMA. 

The opposite directions are in control for now but could they stage a U-Turn?

Now, there are alot of chatter that's going on for the two markets. For the KLCI/FKLI index, ever since the new year of 2014 started, it had been dropping like mad. Some say that it was the "kang kung" govt that wanted to show their "kang kung" power and raised the index to crazy heights which does not make sense. It's only 30 counters and hence, very easily manipulated and as we all know, KLCI and FKLI do move in tandem. Others also said could be the foreign funds pulling out even more. On the other hand, FCPO rebounded after a week or so of bears defying export data's which showed big negative numbers. However, it was clearer for FCPO as USDMYR seems to gain strength and has reached previous high again. Also, reported that there would be leaner production this round which will tighten up stocks. Having said that, some are still remaining cautious as exports don't show a good picture and the speculation of lower RM to increase more purchasing from importing countries.

Nevertheless, let's analyze a little bit on these two markets:


FCPO

The good news is, the bullish trend line is still in tact as can be seen in the chart above. 15th Jan has shown the signal of the rebound. Supporting that, USDMYR had been climbing and now it is at 3.316, which was a previous high. Indicators are also showing positive bull movements. Stochastics has crossed up from its low while MACD-H shortens higher. MACD-H and price shows a bullish divergence which means the bulls are ready to push prices higher. MACD lines are curving upwards but has not crossed its signal line. Candlesticks for today are above 12EMA and 12EMA has a curved upwards line which is an indication of bullish powers has return. Having said that, export data for Jan 1-20 was down by 15% and hence, capped down any further bulls for the moment but it is believed that with the weaker ringgit, demand will be more.

FKLI

FKLI on the other hand shows a different direction. It has broken a trend line and as mentioned earlier, dipping since after New Year 2014. With stochastics still crossing down and also MACD lines and MACD-H are still below water. However, today's candle shows a doji sign which marks the market is indecisive on the movement as it has tested 1800, a strong support. Nearest support levels are 1800 and 1786. Today's candle showing that doji may or may not indicate a rebound. It will depend on the fundamentals now. Coming from several days of drop, at current price seems to be the logical current price that makes sense. That is why, maybe there would be a rebound from here. However, candlesticks are trading below all 12,22 and 32EMA. 

Personal View: 

FCPO: 3 days of high bull gaps may attract some retracement. 15-20 points retracement would be a good spot for long positions.

FKLI: Indecisive. Wait for confirmation on next trading day. If there are no signs of recovery, go short on any strength but by candlestick pattern, there should be a rebound

One up, one down. But which one?

Actually, it's very obvious which one is most likely (but never 100%) to move in the expected direction. Nevertheless, to profit from this, still boils down to ones strategy and how well their money and emotion management is. People tend to focus on a definite answer about the market but they have forgotten the basis of what the market is..and that is the market is an extremely big collective pool of people. Now, when there are so many people involved, this means the more emotions there will be in the market. Like George Soros once said, "It's not about whether you are right or wrong, it's how much you make when you're right and how much you lose when you're wrong". Brilliant words from one of the world's best traders. There is no "holy grail" strategy that will fit for all, it's more on what will one do when the market moves in a certain way.

Let's take a look at the two futures market in bursa:


FCPO

FCPO had a series of bad fundamentals which spells from strengthening of the ringgit right up to export data. With the ringgit strengthening and also Soy Bean oil going down, due to increasing supply and lower demand, FCPO tracked that and dented any bullish hopes in it. Adding that for Jan 1-10 exports fell 21% and with a surprise increase of stocks of 0.3% had hampered down FCPO price further. On the technical side, as we can see that FCPO had turned and fullfilled the bearish divergence between price and MACD-H. Prices are now trading way below all levels of EMA (12,22,32) and sticking to the lower band in the Bollinger Band. MACD lines have also tracked lower highs all the way which also shows a bearish divergence between MACD lines and also price. MACD lines had both crossed the 0 line and is at the negative region showing bears are currently in power which had been the case for the past week or so.


FKLI

It had been said that this year even with the foreign funds pulling out from the market, it's still going to be a good year for the equity market. ESPECIALLY index counters. Which in turn would direct FKLI movement too. With gold also gaining into highs, it had spurred Asian markets regionally to rise and in turn gave more boost to our KLCI and FKLI. Although with the GST coming in which actually is suffering for the rakyat but it is seen as a revenue for the markets as the index counters are always backed by the govt. It is also seen to have a "oversold" bounce back from the previous week's correction. This week there will be major companies in USA reporting on their earnings and hence, this will definitely move the market. With Intel and Microsoft being one of the many companies that reported positive earnings, FKLI is set to move further upwards. On the technical side, as we can see that FKLI is still trading within the uptrend line. MACD-H showing shallower histograms which is ticking upwards and also stochastics have also crossed upwards after several zig zags at its low. Notice a small candlestick pattern of a hammer on 7th Jan 2014, had actually given the signal that FKLI is ready to make a U-Turn upwards although there might be some selling activities but it's still on an upward movement. With the long green bodied candle on 13th Jan 2014, FKLI has shown that the bulls have returned and is set to make further upward movements. Although candlesticks are trading below 12 and 22 EMA, both these two EMA's have not crossed down which means that it was just a mere correction which happened last week.

Personal View:

FCPO: There might be some rebound movements but with FCPO closing below 2500 on Monday, bears will take over and hence it's best to sell on strength and follow the trend. 

FKLI: Look for supports and buy on weaknesses. 

2014, a brand new year for the markets, or is it?

The new year of 2014 has kicked in and it's been a great run for 2013. Both KLCI and FKLI recorded historical highs and from technical point of view, seems to stage more bullish moves in 2014. There are many worries for 2014-2015 as some  say the recession will hit at the last quarter of 2014 which spells the worst recession in the history of mankind. With stimulus still on going, although reduced by 10b, many still take this as a high risk move as govt debts are still at large and seemingly increasing.

On the other hand, USDMYR had a "end-of-the-year" push reaching 3.3x which gave FCPO a bullish move. Adding that this month is the month of the Chinese Lunar New Year may spur more imports from China which in turn could improve exports and also reduce stocks. Nevertheless, 2014 eve was defiant on its fundamentals probably due to rumors on increase exports for Jan 2014. Weather concerns may play a smaller roll now as during the start of the year, rains start to diminish and stocks will increase. 

Nevertheless, lets take a look at the charts for both of these markets technically wise.

FCPO

FCPO had a crazy volatile movement at the last month of 2013. However, the last  day of 2013 (31st Dec 2013) showed some buying power storming up FCPO to 2659 at the end of day. Both MACD-H and MACD lines show positive bullish turns as MACD-H has ticked up to the positive region indicating prices are on the bullish side. MACD lines have crossed upwards from its signal line indicating the bulls have taken over. Stochastics have shown a steady climb and poised to test its resistance at 90. Thin volume was at the last few days of Dec but on the 31st Dec 2013, there was a higher volume indicating that probably the bulls are preparing to push on in 2014 and in line with the Chinese Lunar New Year. The long white candle on 31st Dec 2013 shows engulfments of the 3 candles the day before which could spell strong bullish movements for the coming days. Candlestick stays way above all levels (12,22 and 32) EMA showing that the bull trend is still in tact.

FKLI

FKLI also show strong movements for the past few days. Probably due to good regional news on Jobs data, the minimum taper of the stimulus and most importantly the window dressing that occurs end of the year has took a boost for FKLI and KLCI. However, MACD-H may form a bearish divergence as prices are rising against a lower MACD-H curve. Having said that, MACD lines show otherwise and is still on a bullish move as the MACD average lines have moved upwards from its signal line. Stochastics showing that it had reached its resistance of 90 and a lower volume on the rise may detriment the bull move further as lesser participants are actually going for the bulls. However, thin volume due to the holidays could be the reason why too and may not be of impact on the movement. Candlesticks are trading strongly above all EMA levels (12,22 and 32) showing that it still has strength to push on but may retrace a little before continuing the bull as it has been flirting around its channel top band.

Personal View:

FCPO: Buy on weakness but if movements are weak or sideways, take quick intraday shorts with quick cut losses
FKLI: Plot supports and take longs there as there are most likely be retracements from strong resistances. However, if prices have hit strong resistances, prepare for some retracements and for those who are in line with their risk management, intraday shorts can be implemented.

HAPPY NEW YEAR AND MAY EVERYONE BE PROFITABLE!