Friday, February 27, 2009

Last week I stated that the long term trend of the market is still down, as long as there is no close above 1.2800.

Well, there was a one day close above 1.2800, but the market did not interpret that as a preclude to a change in trend, and the market turned down again.

Currently, I’m inclined to interpret the price pattern that began on February 2nd to the present, as corrective action against the down trend, with an implied downward target that should exceed the low of February 18/09, of 1.2512, and proceed down to at least 1.2400 in the near future. This continuing down move should be confirmed by a close below 1.2650.

A secondary scenario which could occur if there is a market close above 1.2900, is that corrective action could rise to around 1.3200. At the moment this secondary scenario, while it is plausible, seems less likely.


Daily EUR/USD chart as at 26 February 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS

Moving Averages – long term moving averages such as the 200SMA (not shown on the chart, but currently at 1.3828), and short term moving averages such as EMA20, are still sloping down wards.

Oscillators – both the MACD and Stochastic are rising. The NextView RSI is down slightly.

R1 – nearby resistance at 1.2991
R2 – 1.3200
S1 – 1.2650
S2 – 1.2500
S3 – 1.2400

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.

Come and visit Don Schellenberg at ATIC Kuala Lumpur on the 14th and 15th of March 2009

Thursday, February 26, 2009

US DOW DEPRESSION

The most dangerous chart pattern in a bear market is the down sloping triangle. This pattern is seen in the America DOW Jones Index and it sets a downside target near 5600. The rapid fall below 7800 confirms this target.

This chart pattern develops when there is a well defined support level. Above the support level is a down sloping trend line. The support level is created by the people who want to buy shares. When price falls to this level buyers enter the market. The down sloping trend line is created by people who own the shares. They are worried about the future so they are ready to sell. When each new rally fails to move higher these shareholders lower the price they want for their shares. The result is shown as a down sloping trend line.

Over the last five months the rally rebounds developed a pattern of declining highs. The failure of the early 2009 January rally near 9000 established a second calculation point for a new trend line. The first calculation point for the trend line was set by the rally peak near 9600 in 2008 November.

A new downtrend line is drawn and this creates a down sloping triangle. In a bear market the strength of the pattern is increased. The first feature to measure with this pattern is the height of the triangle. The four day triangle base starts on 2008, October 7, with the drop from near 10,000 to 7800. The triangle height is around 2200 points.

Using chart pattern analysis, the downside target for the America DOW Jones Index is near 5600. The long term historical support level is near 5500.

This combination of factors suggests there is a high probability the market will quickly fall towards support between 5500 and 5600. This is a 61% fall from the peak of the Index in 2007, October at 14198. This degree of fall is similar to the degree of fall in 1929 when the America market collapsed and developed the world depression.

The market may develop a temporary rebound from below 7800. The market has two resistance barriers to defeat. The first is the strong support level near 7800. This is now a strong resistance level. The second resistance feature is the down sloping trend line. Currently the value of this trend line is near 8500. The market must be able to move above this trend line to show any true bullish strength.

The end of this triangle pattern develops near the end of 2009, April. There is a high probability the America market will develop a continuation of the downtrend with a slow move towards support near 5600.



To read more articles and commentaries from Daryl Guppy, click HERE

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Daryl Guppy, well-known international financial technical analysis expert. Appears regularly on CNBCAsia and is known as "The Chart Man". He is an equity and derivatives trader and author of books including Share Trading, Trend Trading and The 36 Strategies of The Chinese For Financial Traders. He has developed several leading technical indicators used by investors in many markets. His weekly analysis newsletters get favorable comment in Asia and Australia.

Wednesday, February 25, 2009

Price of gold traded in the futures market has risen 43% in the last 3 months from US$700 per troy ounce in November to US$1,000. the last time I wrote the article on February 3, I have expected the price to pull back from US$899 to US$860 but the correction is sideways with the lowest at US$891 before continuing the up trend. I have mentioned also that the forecast os only valid when it if ti does not break the US$930 resistance level. However, the price broke the resistance and rallied to US$1,000.

Price made a pullback today, this time at price level near US$1,000. Price fell US$30 to close at US$963.20. The price rally upwards has formed an up trend channel defined by two parralel trend lines upwards. The bottom line forms the support level and the top line forms the resistance level.

When price was at $1,000, it was at the resistance level and now the market is reacting to this resistance level. The pull back is expected to last until the price finds support at $900, the trend line support level. The short term 30-day average is also at $900.

However, the pullback may be temporary as the momentum of the up trend is still strong. The Relative Strength Index (RSI) indicator is still in convergence with the up trend.


Daily Gold futures (CBOT) chart as at 24 February 2009 using NextVIEW Advisor. Click on chart for larger view.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

Tuesday, February 24, 2009

The US market sentiment continue to deteriorate as investors have no confidence on the new US$787 billion package which are set to bailout out companies that are facing financial difficulties. The Dow Jones industrial average (DJI) tumbled 251 points or 3.4% to its lowest close since May 7, 1997, bring stock market back to 12 years ago. It broke the major support level at 7,400 points. With this breakout on the major support level, more bearish pressure is expected in the US.

Excerpt from Yahoo:

"Investors pounded most financial stocks even as government agencies led by the Treasury Department said they would launch a revamped bank rescue program this week. The plan includes the option of increasing government ownership in financial institutions without having to pour more taxpayer money into them.

Although the government has said it doesn't want to nationalize banks, many investors are clearly still concerned that this could be a possibility as banks continue to suffer severe losses because of the recession. They're also worried that banks' losses will keep escalating as the recession sends more borrowers into default."

Daily DJI chart as at 23 February 2009 using NextVIEW Advisor. Click on chart for larger view.

The DJI is expected to find the next support level at between 5,600 and 6,000 points as forecasted by market experts Benny Lee and Daryl Guppy in N.I.N.E. Markets in the Asian region are expected to be bearish today with the poor performance in the US.

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N.I.N.E.

Monday, February 23, 2009

The International Monetary Fund (IMF) released late last month yet another downward revision for the global economic growth for this year, predicting the lowest growth since World War II as global output and trade fell dramatically.

Global growth is, however, expected to pick up next year to 3.0% but one just wonders if IMF will revise this downward over time, just like what it did to its 2009 growth estimates, from a high of 4.4% it predicted in Jan 08 to a miniscule 0.5% 12 months later.

Table 1: IMF Global Growth Estimates – Any more downward revision?



No matter what, the latest figures for 2009 suggest escalating economic uncertainties would have an impact on investor sentiment, hence the future performance of equity markets, Malaysia not excluded.

Investors who brace themselves holding on to shares of their favourite listed companies would certainly need more updates on the performance and outlook of the companies from time to time – transparency is key to any decision whether or not to hold on to these investments.

One of the avenues for them would certainly be the independent non-executive directors (INEDs) of public listed companies (PLCs). Quoting Practice Note No 13/2002 of Bursa, an “independent director” means a director who is independent of management and free from any business or other relationship which could interfere with the exercise of independent judgment or the ability to act in the best interests of a PLC.

And quoting Securities Commission managing director and executive director Dato’ Dr Nik Ramlah Mahmood in her speech in October 2006, independent directors could do more towards enhancing shareholders' value and the long-term viability of a company by being proactive. They must be able to challenge and question decisions at board meetings to ensure that decisions made serve the interests of the company and minority shareholders.

Granted, most INEDs are not well paid by PLCs, drawing only a small fraction compared to the remunerations of MDs/CEOs and executive directors (EDs), but their role is enormous, especially to minority shareholders and employees – minority shareholders on company operations and returns expectation, and employees on remuneration, working environment as well as retrenchment or pay cut exercises, if any.

This month, most PLCs in Malaysia will be releasing their Oct-Dec 08 quarter results, where most MDs/CEOs or EDs will be having analyst and media conferences, enhancing what they have announced in the results.

However, we have not seen INEDs being quoted on the results and prospects of the companies on which they serve as directors. Either they do not attend the briefings or they are not questioned by the representatives of the minority shareholders, i.e. the financial/corporate journalists.

It is high time indeed minority shareholders are fed with statements by the INEDs, either through news reports written by the journalists or for the exchange to make it mandatory for PLCs to include statement by INEDs in all the quarterly releases as well as annual reports.

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Article Contributed By Ameer Ali Mohamed. Ameer is Director, Financial Research of NextVIEW. He has a total of 20 years experience as a corporate journalist, investment analyst and fund manager, including as research head of two stockbroking firms and CEO/CIO of a funds management company.

Republished with permission.
This article was published in the Just Say It column in Shares Investment (Malaysia edition) February 2009. You can get the latest copy of Shares Investment (Malaysia edition) at leading bookstores in Malaysia.

Saturday, February 21, 2009

Gold has run into resistance near the July 15th high of 989.60. The previous high plus the channel lines on the chart, may exert some downward pressure, but it’s highly unlikely to last for long.

Although the long term prospect for gold is much higher, near term there is likely strong resistance around the March, 2008, high of 1033.90.

Converging Fibonacci lines appear around 1033. – 1044, so caution should be exercised and ‘exuberant optimism’ avoided, in this area.


Daily Gold chart as at 19 February 2009 using NextVIEW Advisor. Click on chart for larger view.

R1 – immediate resistance at the July, 2008 high of 989.60
R1 – a zone of resistance at the March 2009 high of 1033.90 – 1044.
S1 – 931.

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.
This currency pair has not had a strong trend since July 2008. Essentially this is the longest sideways market for USDCNY since 2005.

This last trading week has been no exception, as shown by the narrow Bollinger Bands on the chart.

Market movement has largely been confined between the high at 6.8853 and the low of 6.9726, as shown by the long horizontal black lines.

The over all price pattern implies that the larger trend is still down, although smaller moves within the sideways range appear to be continuing.


Daily USD/CNY chart as at 19 February 2009 using NextVIEW Advisor. Click on chart for larger view.

R1 – zone of resistance between 6.8325 – 6.8470
R2 – 6.8810
S1 – 6.8130
S2 – 6.7925

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.

Friday, February 20, 2009

Last week’s commentary emphasized that the chart price for that particular week had more reliability that the technical indicators, for probable direction of the market. As it turns out, that view was correct.

The market moved quite easily through the first support level at 1.2700 (S1 on last weeks chart), and is currently stalled around S2, which was at 1.2580. Minor support at time of writing is at 1.2510.

There is some price versus indicator divergence which is causing some upward pressure. This could result in a rally lasting a few days. This is only likely to occur if there is a daily close above 1.2620. Such a move would run into stiff resistance at 1.2800.

The longer term trend of the market is still down, as long as there is no close above 1.2800.


Daily EUR/USD chart as at 19 February 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS

MACD – down – in negative territory
Stochastic – the short term indicator shows evidence of upward pressure, but not confirmed.
MA 200 – long term support of the down trend.
EMA20 – short term support of the down trend
R1 – 1.2620 (not shown on the chart)
R2 – 1.2800
S1 – 1.1510
S2 – 1.2429

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.

The KLCI is still within the wedge pattern support and resistance and this means that the market is still in a correction period. The market has already been in a correction for three months. The major trend is still down as the 90-day moving average (90 SMA) is still declining although the KLCI is able to stay above it currently. The weak Relative Strength Index (RSI) which is currently at a neutral reading indicates again that there is not strength from both sides (the bulls and the bears). It has been like this for the past one month.

The Bollinger Bands which is a volatility indicator is still contracting. This shows that the volatility has continued to decline and confirms that the market is in a correction. However, the tightening bands would also mean that the correction may be over soon. Furthermore, the wedge pattern support and resistance level is also converging and nearing an apex. Expect a breakout in the very near term.


Daily KLCI chart as at 19 February 2009 using NextVIEW Advisor. Click on chart for larger view.

The market is currently at a very crucial point of time on the chart. The next direction depends on which level the KLCI breaks, the support or resistance level. The support and resistance level is from the wedge pattern and is currently at 880 and 940 points respectively. A break below 880 points would see the KLCI making its way to test the 800 points support level again and may continue to decline further.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

Thursday, February 19, 2009

The Shanghai Index has developed a very strong rally breakout from the resistance area between 2000 and 2100. There is a high probability this rally will retreat from the resistance level near 2300. The market has closed above 2300 on February 13, Friday, but a retreat may develop from this area in the next several days. This rally and retreat behaviour is the normal behaviour for a long term market trend breakout.

The breakout pattern sets upside targets near 2600 and downside targets near 2000. We start with the downside targets for the index because it is important to always remember risk. There are three features to examine.

• The first feature is the up trend line. This line starts with the low of January 13. The second point for the new up trend line is created on February 2. The value of this trend line is currently near 2120. The value of the up trend line on Friday February 27 will be near 2300. The up trend line acts as a support level. Recently trend lines have not been reliable so it will be very bullish if the index successfully uses this trend line as a support level.

• The second feature is the old resistance level between 2000 and 2100. This will become a new support area. The retreat could fall below the up trend line and test and retest this support this area. If this pattern appears then it suggests the market will develop a another consolidation trading band between 2000 and near the 2300 area.

• The third feature is the Guppy Multiple Moving Average (GMMA) relationships. The long term GMMA has turned upwards but it is still compressed. This indicates the up trend remains weak.



Next we look at the upside targets for a continuation of this market breakout activity. These targets are used when there is a successful breakout above the resistance level near 2300.

There are four features.

• The first feature is the resistance level at 2300. This will act as a new support level and the market should test and retest this level. A successful retest shows trend strength.

• The second feature is the new uptrend line. This up trend line can provide continued rising support for the new trend. If this line develops into a reliable line then trend line analysis can be applied to many other securities.

• The third feature is the resistance band between 2500 and 2600. The resistance at 2600 has been a strong resistance and support level in history so it will become a strong barrier to a continuation of the market rise.

• The fourth feature is the GMMA. A good developing separation in the long term GMMA will indicate investors have become strong buyers and this support the rising trend strength.

To read more articles and commentaries from Daryl Guppy, click HERE

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Daryl Guppy, well-known international financial technical analysis expert. Appears regularly on CNBCAsia and is known as "The Chart Man". He is an equity and derivatives trader and author of books including Share Trading, Trend Trading and The 36 Strategies of The Chinese For Financial Traders. He has developed several leading technical indicators used by investors in many markets. His weekly analysis newsletters get favorable comment in Asia and Australia.

Wednesday, February 18, 2009

DOW HEADING DOWN SOUTH

The US market sentiment is extremely bearish. Investors seem not to have enough confidence despite the US$787 billion stimulus bill which is going to be signed soon by the new US President Barack Obama, who have also said that help will be provided to US giant auto makers General Motors Corp. and Chrysler LLC. General Motors has already received $9.4 billion and could get another $4 billion if the Treasury Department signs off on its viability plan. Chrysler has borrowed $4 billion, and is seeking another $3 billion. Investors are still not sure whether this help can overcome a deeper economic problem.


Chart from www.yahoo.com

The Dow closed 297.81 points lower or 3.05% at 7552.60 today, just 24 points above the 7528.40 points lowest closing price since 1998. The Dow has closed lower for 6 consecutive months. I have mentioned previously that the Dow is waiting to resume its down trend, especically if it breaks the support level of 8,000 points. The next support level, a major support level is 7,400 points. The Dow may rebound at this level or further down south and find the next support level at 6,000 points. I believe that it may head further down south because there is no sign of the bearish momentum slowing down.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

Monday, February 16, 2009

DOW WEAKNESS

The October 2008 fall in the America DOW Jones Index set a potential support area near 8000. The last four months have seen retesting of this general support area. Support is critical in a bear market but we should not ignore the behaviour of the rally rebounds from support. Over the last four months the rally rebounds have developed a pattern of declining highs. The failure of the early 2009 January rally near 9000 established a second calculation point for a new trend line. The first calculation point for the trend line was set by the rally peak near 9600 in 2008 November.

A new downtrend line is drawn on the daily DOW chart. This creates a down sloping triangle. This is a powerful bearish pattern in any market and breakouts from the last third of the triangle can be very powerful. In a bear market the strength of the pattern is increased. The pattern suggests there is a high probability of a downside breakout.

The first feature to measure on this pattern is the height of the triangle. The four day triangle base starts on 2008, October 7, with the drop from near 10,000 to 8000. The triangle height is around 2000 points.

This sets a target near 6000 for any downside breakout from this pattern. This is above long term historical support near 5600. A fall to this level moves the America market into a economic depression.

The down sloping triangle provides a time frame for market developments. The apex of the triangle occurs in 2008 mid-April. This is close to the end of the US tax reporting deadline. The marketing is entering the last third of the pattern development. Breakouts from this sector of the pattern can be very powerful and move very quickly to achieve their target levels.

There are two points of caution for this analysis. The first point is that Pattern analysis on an index is applied with some caution. However, the bearish message of the pattern remains valid.
The second point is the chart pattern on the DOW chart. The pattern is not a perfect down sloping triangle and to a small degree this reduces the reliability of the pattern.

A successful break above the down sloping trend line has a target between 10,000 and 10,600. The measured base of 2000 points is projected upwards from the point on the trend line where any breakout develops.

The test and retest of support near 8000 is not part of a consolidation pattern preceding a market reversal. It is consistent with a bearish down sloping triangle pattern.



To read more articles and commentaries from Daryl Guppy, click HERE

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Daryl Guppy, well-known international financial technical analysis expert. Appears regularly on CNBCAsia and is known as "The Chart Man". He is an equity and derivatives trader and author of books including Share Trading, Trend Trading and The 36 Strategies of The Chinese For Financial Traders. He has developed several leading technical indicators used by investors in many markets. His weekly analysis newsletters get favorable comment in Asia and Australia.

Sunday, February 15, 2009

In a game of Texas Hold’em, each player receives two cards initially. Then the betting begins. After that round, the dealer uncovers a set of three cards. These cards, called the flop, are available for use by all players to create the strongest possible hand. Then another round of betting commences. Next, for all who decide to stay in the game, a single card—the turn—is uncovered. This, too, is available to all players. After yet another round of betting, the final communal card—the river—is turned over. At that point, there is a showdown and the strongest hand takes the pot.

One of the cardinal skills of Texas Hold’em is the decision of when to play and not play. Do you fold, do you call, or do you raise? All you see initially are the two pocket cards. You have no idea of the cards held by the other players or the cards you might be able to use from the flop, turn, and river. All you can do is try to assess your odds and the competition. The player who has done his research knows that, in an eight hour poker game where 35 games per hour are played, the number of times he will be dealt an unsuited Ace, King will average between three and four. Those are rare, good pocket cards and you have to play them. Conversely, a low, nonconsecutive, unsuited hand gives little in the way of odds and, in a game with ten other strong players, you would be wise to fold and wait for something better.

Traders face the same question of when to play. If they are trading frequently on an intraday basis, they want volatility—even if there is no dominant trend. Good intraday swings provide a number of opportunities to make money on the long and short side. Conversely, low volatility days will meander in a tight range for hours at a time. Even if your timing is good enough to catch a swing within the tight range, the accumulated commissions over the day can eat you up.

To address the issue of when to play, I looked at the Spiders (SPY), which closely mimic the S&P emini futures. I selected the period from September, 2002 to the present (8/27/04), which included 493 trading days, and I calculated the correlation between the day’s volume and the day’s range. Note that, in calculating the range, I am examining the difference between the highest and lowest points actually traded during the day—not the day’s price change (which could be a function of overnight trading). The day’s range is a particularly relevant measure of volatility for the intraday trader. Interestingly, the correlation was a highly significant .605. Stated in other terms, about 36% of a day’s volatility is accounted for by the day’s volume.

That provides us with a potential edge. After the market opens, you—the trader—are dealt two pocket cards. All you see is what the market has done during the initial period of trading. You have to decide whether you fold or bet. As the trading game progresses, the next time periods provide you with the flop. Once again, you decide that the day is offering you a great hand—and you eventually go all in—or that you’ll bet more modestly or not at all. Still later, in the afternoon, the market reveals the turn and river and decide how, if at all, you’ll stay in the game. By looking at the volume of the market hand you’ve drawn, you can make some inferences about that market’s volatility. If the overnight Globex session has shown unusually high volume and volatility, I can look for a wider range in early morning trading. If the morning trade—my pocket cards—shows little volume, I have little reason to expect a wide-range trending movement in the midday (when volume and volatility tend to be lowest in general).

Just as in poker, the market player updates estimates of odds with each new “card” that is revealed. Is volume and volatility, relative to recent historic averages, growing or shrinking? Is it historically low, average, or high? Is there enough movement here to make me want to play the game?

The professional poker player Ken Warren advises, “The important thing to remember is that your goal is not to play hands of poker, but to make the best decisions hand in and hand out. You’re playing to win money, not to play cards, as paradoxical as that sounds.” Similarly, your goal as a trader is to make money, not to trade. If the market is not providing you with tradable swings, do you want to be in the game? The really good poker players—and traders—know not only how to play, but when not to play.

There is one important difference, however, between poker and trading. In poker, you can draw a 7♥2♣ and bluff the table, betting aggressively and making others think that you’ve drawn the nuts. Other players might even capitulate and cede the pot to you. In trading, unless you trade enough size to move the market, there is no bluffing when the opening period provides a narrow range on low volume. If you go all in, betting on a breakout move, there is a good likelihood that you’ll be revisiting the opposite side of the trading range before that breakout ever occurs. Those are the situations that separate traders who want to trade from those who need to trade.

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Brett N. Steenbarger, Ph.D. is Associate Clinical Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY and author of The Psychology of Trading (Wiley, 2003). As Director of Trader Development for Kingstree Trading, LLC in Chicago, he has mentored numerous professional traders and coordinated a training program for traders. An active trader of the stock indexes, Brett utilizes statistically-based pattern recognition for intraday trading. Brett does not offer commercial services to traders, but maintains an archive of articles and a trading blog at www.brettsteenbarger.com.

Saturday, February 14, 2009

Last week I proposed a scenario for the coming week that suggested the probable price movement for gold: that is that the market may find difficulty closing above 920. because of resistance at that area. If that happened, price would likely tumble towards support around 880 before gathering enough bullish energy to break through resistance to create a new high above 927.

All of that happened, as the market moved down toward support at 880, reaching 890, encountering bullish strength and bounding upwards strongly for two days.

Presently gold has moved very close to a new zone of resistance which begins at 951-990. The area between 951-960 should be particularly strong.

If resistance at 960 is sufficiently strong, watch for a possible drop down to 900. again, if not lower.


Daily Gold chart as at 12 February 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS

Stochastic – rising in overbought area
MACD – Rising, but showing lack of commitment to the upside. Profit taking has occurred within the past two weeks and the current up move may be in weaker hands implying a lack of strength for a sustained bullish trend
EMA20 – rising in support of price
R1 – resistance zone from 951- 960
R2 – 990
S1 – 929
S2 – 888.
Channel lines – the convergence of two sets of channel lines at the top implies strong resistance..
The price chart looks almost unchanged from a week ago. A one day gap down on Tuesday, February 10th, has since almost been neutralized by a subsequent gap up.

As mentioned last week, the price pattern suggests down side bias.


Daily USD/CNY chart as at 12 February 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS
Stochastic – nearing it’s oversold level.
MACD – slightly down, in negative territory
EMA20 – flat.
R1 – 6.8300
R2- 6.8500
S1- 6.8050

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.

Friday, February 13, 2009

Upward pressure, which technical indicators implied was present in the market, failed to materialize significantly higher values for this pair.

Some charts have printed the highest high for last week at 1.3093, achieved on Monday, February 9th. Even that was not sustainable as the market dropped down to exactly the middle of it’s two week old trading range.

EURUSD has moved much less, either up or down, than some other major currency pairs linked with the USD, such as GBPUSD.

Once again, the technical indicators are of little help in suggesting probable direction for this week. It’s probably more valuable to determine significant areas of resistance and support and monitor price reaction to these zones, although I have a moderate bias to the downside.


Daily EUR/USD chart as at 12 February 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS

MACD – rising slightly in negative territory
Stochastic – virtually flat
Price Pattern – a slight bias to the down side.
R1 – nearby resistance around 1.3090
R2 – 1.3240
R3 – 1.3740
S1 – nearby support at 1.2700
S2- 1.2580

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.
Investors sentiments remain mixed. Some has started to accumulate shares when market starts to heat up last week only to find out that the heat only lasts a few days. Others who have not decided to buy stay in the sidelines waiting for a clearer signal. I have mentioned before that the long term down trend cycle is not completed until the KLCI goes to at least 550 points. If you asked me, I would only start accumulating shares after one more selling pressure in the market.

Technically, the KLCI is still in a major down trend. The 90 day moving average (90 SMA) is still declining although the KLCI tested it again last week on Monday. However, it did not managed to stay above it to change the course of the down trend. The long term down trend is in a correction because the short term trend is up. The KLCI is still within the corrective wedge chart pattern since last month when the pattern was formed.

There is still no evidence of market wanting to go move into a direction, it is still sideways. The Relative Strength Index (RSI) remains neutral with higher lows and lower highs. The Bollinger Bands which measures volatility shows tightening bands which means that the volatility is getting weaker. There are no clear signals from the technical indicators to determine the next direction and the determining factor would be the breakout on the wedge pattern. The Malaysian stock market is at a crossroad.

The wedge pattern support and resistance level is at 880 and 940 points respectively. A break above the resistance level shows that the bulls are in control and therefore there is a high change that price would rally. However, if the price breaks below the resistance level, then a continuation of the long term down trend is expected.


Daily KLCI chart as at 12 February 2009 using NextVIEW Advisor. Click on chart for larger view.

The short term target that I have set is at 940 points and therefore I expect the KLCI not to break above the resistance level of the wedge pattern. This week, I would expect the KLCI to continue to trade sideways with a range between 880 and 910 points.

KLCI Short term target (2 months): 940 points
KLCI Long term target (11 months): 550 points

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

Thursday, February 12, 2009

The price of Singtel in the stock market fell 8.3% from $2.76 on the 29th of January to the current price of $2.53. The price of Singtel has been trading in a range between $2.30 and $2.80 since November 2008. In early 2008, the share price was trading between $3.60 to $4.00.

Technically, the price of Singtel is still down in the long term. Its long term 90-day moving average is still declining and the price is below it. It tested this average on the 29th of January but failed to stay above it. The short term averages has started to move sideways indicating a correction. Therefore Singtel’s share price is currently in a down trend correction. The 90-day average price is currently at $2.60.

The strength of bulls and bears in Singtel is almost equal. The Relative Strength Index (RSI) indicator reading has been around the mid-level of 50 since December 2008. The weekly MACD Histogram has shown sign of weakness in the current momentum. The Histogram has started to decline after 14 weeks of increase. Volume remains firm in the past weeks with about 23 million shares traded daily. However, it is relatively lower than in early 2008 where the average shares traded daily was at about 30 million shares.

With weak momentum and no signs of price moving into a direction, trading within the support and resistance levels is preferable. Since the price is currently in the middle of the 3 months support and resistance trading range and the momentum is weak, the price is expected to test the support level which is at $2.30. If the support of $2.30 is broken, we may see price of Singtel decline further to test the next support level at $2.00. If it holds above $2.30, then we may expect price to rebound to test the resistance level at $2.70.


Daily ST ENGG chart as at 6 February 2009 using NextVIEW Advisor. Click on chart for larger view.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

Tuesday, February 10, 2009

We begin this New Year with dampened enthusiasm and dented optimism. Our happiness is diluted and our peace is threatened by the financial illness that has infected our families, organisations and nations. Everyone is desperate to find a remedy that will cure their financial illness and help them recover their financial health. Every new year, I adopt a couple of old maxims as my beacons to guide my future. This self-prescribed therapy has ensured that with each passing year, I grow wiser and not older. This year, I invite you to tap into the financial wisdom of our elders along with me, and become financially wiser.

* Hard work: All hard work brings a profit, but mere talk leads only to poverty.

* Laziness: A sleeping lobster is carried away by the water current.

* Earnings: Never depend on a single source of income. [At least make your Investments get you second earning]

* Spending: If you buy things you don't need, you'll soon sell things you need.

* Savings: Don't save what is left after spending; spend what is left after saving.

* Borrowings: The borrower becomes the lender's slave.

* Accounting: It's no use carrying an umbrella, if your shoes are leaking.

* Auditing: Beware of little expenses; A small leak can sink a large ship.

* Risk-taking: Never test the depth of the river with both feet. [Have an alternate plan ready]

* Investment: Don't put all your eggs in one basket.

I'm certain that those who have already been practicing these principles remain financially healthy. I'm equally confident that those who resolve to start practicing these principles will quickly regain their financial health.

Let us become wiser and lead a happy, healthy, prosperous and peaceful life.
SINGAPORE TECHNOLOGIES ENGINEERING LTD. (ST ENGG) is a global, integrated, engineering group with capabilities spanning the aerospace, electronics, marine, and land systems sectors. With more than 19,000 personnel in 42 cities around the world, it serves many of the world's leading commercial enterprises and defence forces. Through its four strategic business areas (SBAs) in the aerospace, electronics, marine, and land systems sectors, it delivers essential, comprehensive support and services around the clock.

Its share price is steady above $2.00 as it was supported with a series of book orders in the fourth quarter of 2008. The recent one was a GBP150 million contract from the U.K. Ministry of Defence to provide it with military vehicles. It may not impact the share price directly but is definitely helpful to support the price from falling in a bearish market.

Analysts have been making buy calls for ST Engg since the beginning of the year. On 16 January, UOB KayHian upgrades ST Engg to Buy from Hold, raises target price to S$2.83 from S$2.40 after assigning higher P/E of 16.5X vs 14.5X previously. On 5 January, Deutsche Bank reiterates Buy call with S$3.30 target price after recent string of contract wins and DBS Vickers upgrades to buy from hold with a price target of $2.80. Just before the new year, Nomura upgrades to buy from Neutral with a target price of $2.83 citing an attractive 7% yield and stable earnings growth

The price of ST Engg has been in the down trend since last year when price was around $3.40. It fell to S$2.00 in October and has found support. Since then, the price has been in a correction with a trading range between $2.00 and $2.58. The price is currently at $2.42. There is a strong resistance at $2.58. Price has tested this level for three times since November last year and unable to break it.

A break above this $2.58 resistance level would cause the price to rally with a price objective of $3.10 based on the triangle pattern formed in the current correction period. However, it may take great investor confidence to cause the price to rally and that seems to be lacking in the current market situation. Momentum readings from the Relative Strength Index (RSI) and Momentum indicators are generally weak and this means that there is no strength in any (bull or bear) direction.


Daily ST ENGG chart as at 6 February 2009 using NextVIEW Advisor. Click on chart for larger view.

With weak price momentum, expect the price of ST Engg to continue to trade within the same trading range in the near term. Low risk entry price is between $2.20 and $2.30. The bullish momentum should pick up if the price stays above $2.20. Let’s continue to watch this counter and see if it is able to break above the 2.58 resistance and if it does happen, then we can expect a rally.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

Saturday, February 7, 2009

Gold is moving in a trading range between 880. and 929 (R1 on the chart).

At the moment, the various indicators aren’t very helpful in determining probable price direction for the week.

Here is a reasonable but not guaranteed possibility:
The upward move in the market will encounter some resistance at mathematically calculated levels before reaching resistance at R1. The first level is around 915 and the second at 920. The market may find difficulty closing above this level. If that is the case, strong resistance could send price downward toward support at S1 before the market gathers sufficient bullish energy to break through R1 to create a new high above 927.


Daily Gold chart as at 5 February 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS

EMA 20 – short term moving average, rising and supporting price.
SMA 100 – longer moving average – flat.
MACD – in positive territory, but weakening.
Stochastic – Dropping from it’s over bought level.
R1 – 929.
S1 – 880.
S2 – 865.

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.

This past week this currency pair has, on average, remained quite flat, as it has for nearly a month.

There was a minor spike toward R1 which failed to hold.

The Bollinger Bands indicator, is even tighter around price that it was a week ago, containing all price movement except the gapping spike upwards.

TECHNICALS


Daily USD/CNY chart as at 5 February 2009 using NextVIEW Advisor. Click on chart for larger view.

R1 – resistance unchanged from last week at 6.8500
S1 – support unchanged from last week at 6.8045
Stochastic – down – reflecting the minor shift in price downwards.
MACD – flat
Pattern – the price pattern suggests that additional price movement toward S1 is the most likely direction for the market this week.

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.

Friday, February 6, 2009

Last week’s first level of support (S1 at 1.300) is now this week’s first level of resistance (R1). This level has, at least temporarily, halted the attempted rally.

The indicators I’ve applied to the chart indicate there is some upside pressure. If that is the case then there’s a reasonable probability that resistance at R2 could be tested this week.

At the moment the market is in a trading range between S1 and R2. There is a minor two week old down sloping trend line – a break of this and of R1 will target the R2 zone of resistance between 1.3180 and 1.3510.

We can’t count the downside out of the picture just yet, especially if the R2 level at 1.3410 is not exceeded to the upside.


Daily EURO/USD chart as at 5 February 2009 using NextVIEW Advisor. Click on chart for larger view.

TECHNICALS

NextView RSI – there is a degree of bullish divergence between the RSI and the chart, exerting some upward pressure.
Stochastic – rising above it’s oversold level.
R1 – 1.3000
R2 – a resistance zone between 1.3180 – 1.3410
R3 – 1.3696
S1 – a break below this level would first target 1.2600 and then the November 20th low of 1.2422, which seems to be out of range for the very near future.

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Article and Commentary by Don Schellenberg. A trader and trading coach, he is a noted expert on Market Structure, Elliott Wave and Fibonacci. He trades the forex market.
The political tsunami in Perak seems to be much hotter than the stock market. The market generally went sideways last week. In my previous article I wrote that the KLCI is expected to be traded in a range between 860 and 890 points. The KLCI was even weaker and traded between 871 and 887 points. Market sentiments remain weak as economic data continues to be gloomy. Trading volume remained firm as compared to last two weeks but relatively lower than last month. The declining volume has caused Bursa Malaysia Bhd’s net profit fell 56.6% to RM104.4 million in its financial year ended Dec 31, 2008.

The KLCI is currently at 879.95 points. With not much development in the market, the KLCI is still in a major down trend but up trend in the short term. This simply means that the market is in a down trend correction and this is confirmed by the wedge chart pattern formation on the chart. The KLCI is still within the support and resistance level of a wedge chart pattern. The KLCI is currently near the support level. The momentum of the short term up trend remains firm but there are already signs of weaknesses. The Relative Strength Index (RSI) indicator remains in convergence with the KLCI, which indicates strength of the trend. However, the PDI has been below the MDI since last week in the ADX indicator. The market volatility has eased after expanding since mid December. The Bollinger Bands which measures volatility continues to contract.


Daily KLCI chart as at 5 February 2009 using NextVIEW Advisor. Click on chart for larger view.

I believe that the market is still full of uncertainty and lacking confidence. The chart indicates this sentiment with declining volume and volatility. The short term target at 940 points may not materialize because the market is expected to remain sideways with a downward bias next week. However, it is still valid until the 860 points support level is broken. I am expecting the KLCI to continue to trade within the trading range set in the previous week, which is between 860 and 890 points.

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Article contributed by Private Trader, Market Expert, Trading Coach and Chief Market Strategist of Nextview, Mr. Benny Lee. For more articles and commentaries from Benny, click HERE.

Thursday, February 5, 2009

The are many opinions about the current global economic crisis. Some say economy may recover in 2009, stock market may bottom out, some say it's going to get worst in second half of 2009. Some say the slow down may last up to 2 more years. Some say there is going to be anarchy and some even said it may lead to World War III. What do you think? Can we get out of this economic and financial mess this year?

See the video for some of the people's opinions on the Davos Debates...





Kofi Annan



Bollywood Actor Amitabh Bachchan




Harvard's Peter Galison




Zurich's Financial CEO James Schiro



Bob Forbes of Forbes FY!



Arianna Huffington of huffingtonpost.com



Buddhist monk Matthieu Ricard




Chairman of Intel Craig Barrett



More HERE from Youtube

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N.I.N.E.