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Showing posts from January, 2016

ASEAN Strategy - Not Time Yet For The Bear

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■ We are of the view global equity markets are not starting a major bear market phase.
■ US DJIA could be in a major sideways triangle consolidation phase. Long-term uptrend is still intact.
■ MSCI Asia ex-Japan has reached our target levels. Technical indicators show positive divergence signs, an indication the Index is close to its bottom.
■ Crude oil prices should rebound in the immediate term but see one more new low before prices finally bottom.
■ Hang Seng should find strong support at 18,000 levels.

Bear market or not?
While many are calling for the start of a global equity bear market, our time-cycle analysis only points to a peak in 2017/18. Correction has been deep in most equity indices since the start of the year, and the hardest hit were the China equity markets. So far this month, the Shanghai Composite Index is down around 18%.

US DJIA in triangle consolidation?

The US DJIA continued to hold above its major support trendline this week, which is pos…

FBM KLCI Weekly Recap

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Wall Street started the new year on an extremely negative tone after China’s stockmarkets went limit down (by 7.0%) and triggered the circuit breaker two times last week amid its weaker manufacturing data - the Dow declined 276.09 pts to 17,148.94 pts on Monday. The key index, however, stabilised and ended 17,158.66 pts (+9.72 pts) on Tuesday after a rough start. Nevertheless, the selling pressure resumed amid the slump in the crude oil prices, coupled with a weaker Yuan; the Dow lost 252.15 pts to 16,906.51 pts on Wednesday. Further selling activities on the Dow were noted, which sent the key index plunging 392.41 pts and 167.65 pts to 16,514.10 pts and 16,346.65 pts over the next two trading days respectively. On the W.o.W basis, the Dow dived 1,078.58 pts.
Similarly, Malaysia’s stockmarket tanked after trading was halted in China on the back of a 7.0% drop; the FBM KLCI dived 39.14 pts to 1,653.37 pts on Monday.
However, bargain hunting activities emerged and the FBM KLCI rebounde…