Wednesday, September 30, 2009

Bolehland - Anything illegal is possible

Cattle farms near the landfill site

Tonnes of garbage and water filling up the cattle farms

Hard to imagine that an illegal landfill on a 20 acres site can be allowed to operate for 5 years with solid waste building up to a height of 300 ft. It is funny that the authorities could only issue warnings, notices and compounds but were helpless in stopping their own contractors to dump the garbage illegally. On one hand they paid the contractors for their services on garbage collection and on the other hand issued summonses to these contractors for illegal dumping, and these things could go on for 5 years despite numerous complaints from the residents to the authorities. DOE has been very quiet in this issue, most likely because they were not even aware of the pollution problems created by the landfill.

And these jokers are going to use tax payer's money for removing these garbage to another proper landfill site and possibly to pay a specialist firm to rehabilitate these 20 acres of private land that belongs to Don't Know who. Rightfully they should get the contractors and the land owners to remove the garbage and to rehabilitate the site to DOE's requirement at their own cost.

Tuesday, September 29, 2009

Dow - Moved up with low volume

Dow gained 124 points (1.28%) with a very low volume of 4.4 billions. The closing price of 9789 is 40 points lower than its last week's height of 9829. For a positive up trend, it will have to break its upper resistance and it has to improve its volume to around 8 billions or more.

Hang Seng regained 424 points (2%) at the close today and moved back to stay above its lower trend line.

I see no sign of an immediate sharp pullback, however it is good to be cautious in view that Dow so far has gained 50% and Hang Seng has gained 85% since their respective March's low of 6,547 and 11,344.

Monday, September 28, 2009

Rule No. 1 - Protect your capital

The very first thing you must learn in Judo is 'break floor', the technique of protecting your body from injury. In stock investment, my No. 1 rule is to protect my capital - pay attention to whatever possible danger sign.

There is one danger sign today - Hang Seng dropped 435 points (2%) and has gone below its lower trend line, a bad sign. If it does not cross back to above the trend line within the next two days, it is possible that its major wave (IV) correction has started.

Hang Seng will never go into a major correction unless Dow has started its major correction. To prevent such an event from occurring, Dow must not go below its short-term support and instead it must surpass its previous height of 9829 and break its upper trend line.
If Dow can break its upper trend line, the wave count is no longer 1-2-3-4-5 as shown above, the count is more likely to be 1-2-i-ii-iii as mentioned in my previous article.

Baltic Dry Index's fall misleads investors

A few days back, I talked about BDI that has fallen 50% within 4 months and surprisingly the CRB Index is holding up very well. I thought CRB would follow BDI sooner or later. My friend Mr. Saw forwarded this article to me that explained the drop in BDI.

Saturday, September 26, 2009

Kurnia Asia

Kurnia Asia is very well behaved. It is currently in wave 3 of major (III).

Has wave 3 reached its targeted price?

Based on Fibonacci Ratio 1.618 times of wave 1 (take the b wave figure), the target is 71 sen. It stock price closed at 73.5 sen yesterday and it has completed 5 sub-waves i-ii-iii-iv-v. If there is no extension, 73.5 sen is the wave 3. However, if there is extension waves of vi-vii-viii and ix and using Fibonacci Ratio of 2.618, wave 3 is likely to end at 93 sen.

Looking at the divergence between the stock price and volume movements, it is likely that 73.5 sen is the end of wave 3. However, anything can happen in stock movement. It may be safer to hold the stock until somewhere before the end of its major wave (V), unless a person wants to test his trading skill

Friday, September 25, 2009

KNM - Ready to run?

Continue from my article on September 21, the wave count on a 5-year chart remains the same.

The wave count for wave (I)-(II) is as shown above.

On the 3-month chart above, KNM is 7 days into wave (III) that has a potential of reaching Rm 1.43 or Rm 1.88 as mentioned in my September 21 article. From the chart above, it appears that sub-waves i and ii were completed. Sub-wave iii has put on its first candlestick. In the next few sessions if it can break the 82.5 sen and the 91 sen levels with volume reaching 15 millions, it will continue its journey to at least Rm 1.43 with possible height of Rm 1.88.

However if it fails to break the 82.5 sen level and starts to turn lower, and the volume is less than 10 millions, then it is forming a-b-c sub-wave ii as shown below. It can also form a-b-c-d-e sub-wave ii if it continues to drift side way if market condition (Dow, Hang Seng etc) is not conducive for a run-up. But ultimately wave iii will have to start, it is a question of when. Trading volume may be able to indicate.

But my bet is sub-wave iii has started as I expect Dow to start running very soon.

Thursday, September 24, 2009

Dow - Hovering below the upper resistance

Since September 17, the waveforms for Dow, S&P and Nasdaq remain the same.

Dow is still hovering below the upper resistance line.

S&P has moved above the upper resistance line and was able to stay above the line. Hopefully it does not go below the line.

Nasdaq has broken the short-term resistance line S-H but it remained below the long-term resistance line L-T as shown above.

I personally do not expect any major correction in the immediate future based on the Case A and B's possibilities as shown. For both the cases, the indices remain somewhere at wave 3 of (III). However, we still have to watch out for any unexpected event.

If the market were to plunge from here, Elliott is still able to provide a wave count as shown below. Take Nasdaq as an example.

There is actually one index at this moment that makes me nervous, the Baltic Dry Index (BDI) that measures the shipping cost. Since early June's height of 4291, it has dropped 50% to 2175 at yesterday's closing. The actual demand for the transportation of raw materials must have dropped quite a lot.

The CRB index that measures the commodity price trend is still holding quite well but I believe if BDI does not reverse its direction quickly, very soon CRB will follow BDI and started to move lower indicating a slower economic activity.

Tuesday, September 22, 2009

Mooncake Festival

One of my favorite festival, the Mooncake Festival is around the corner. Mooncake Festival or Mid-Autumn Festival is celebrated on the 15th day of the eighth month in the Chinese calendar or lunar calendar. This year it falls on the 3rd of October (Saturday).

The sad thing is, this festival now is not like what it used to be when I was a small kid in the 1950's. In those days as night fell, you could see colorful lanterns with different shapes and patterns everywhere.

my late grandmother would play with us and we enjoyed under the moon, on a small table, our dishes of mooncakes, fruits, sweets, fried yam, fried sweet potatoes ........Those were the days.

Since then, year in, year out, I have my paper lanterns lighted and I have my mooncakes and chinese tea under the moon except when it rained.

My children too have been enjoying the lanterns and the mooncakes all these years and they loved the little piggy very much.

I hope they can carry on this tradition. I think they will.

Monday, September 21, 2009

KNM - My wave count

After setting a height of around Rm 2.40 in January 2008, it went down all the way to 32 sen by March 2009. I am taking the 32 sen low as the end of major wave (II).

Since March KNM has completed 5 waves to form its wave 1 at Rm 1.06 on June 5.

Since then, it has formed a 3-3-5 corrective waves a-b-c to completed its wave 2 as shown above. KNM is currently in early part of sub-wave i of wave 3. It can be named 1-dot & 2-dot of sub-wave i.

As usual, there are many other possible ways of counting, but I shall monitor KNM along this hypothesis until such time the hypothesis can no longer hold.

The magnitude of wave 1 is 74 sen, if the magnitude of wave 3 is the same as wave 1, the target for wave 3 is Rm 1.43. If wave 3 takes the magnitude of 1.618 times of wave 1, the target for wave 3 can be 1.618x74 + 69 = Rm 1.88

It may be good to look at other possible wave counts.

Case A is what I have discussed above.

Case B is an a-b-c-d-e wave 2.

Case C is as shown above which is unlikely as the sub-wave i has only 3 waves and not 5 waves. But it has happened before in the past, the unlikely or the so called impossible option turns out to be the correct one ultimately.

Sunday, September 20, 2009

What will hapen to Hang Seng if Dow has a strong run-up?

Yesterday I talked about one likely scenario for Hang Seng as shown below where wave 5 can finish its journey at 23,000 within 2 weeks. After which we have to watch out for the major wave (IV) consolidation.

The above scenario can happen if Dow is unable to break its immediate upper resistance in the next few sessions and starts to turn lower as shown below to form major wave (II).

However if Dow is able to punch through its upper resistance line in tandem with Nasdaq and S&P as mentioned in my post on September 17, it doesn't matter whether it is case A or case B as shown below, Hang Seng will be able to move much higher for a longer time frame.

The first indication from Hang Seng that its current run-up can last much longer is when it can move higher than 23,000. Refer to the chart as shown below, since wave 3 is shorter than wave 1, wave 5 has to be equaled to or shorter than wave 3.

Once the wave 5 shown above is longer than wave 3, than the count is no longer 3-4-5, the count has to be sub-wave i-ii-iii as shown below. Very bullish indeed.

The point here is as long as Dow is trending upwards, the rest of the world bourses including Hang Seng should be trending upwards in tandem with Dow. We have no need to worry about this scenario, we have to be really careful when Hang Seng were to end at 23,000.

Saturday, September 19, 2009

Selamat Hari Raya

Hang Seng - Half way through wave 5 of (III)

My wave count for Hang Seng is as shown above. Since October 2008's low, Hang Seng has completed its major wave (I) and (II). When Dow started its current run since March 2009, Hang Seng moved in tandem with Dow but in major wave (III). At this moment it is half way through wave 5. The target is 23,000, another 1,400 points if there is no extension (wave 6,7,8 &9). Time frame to reach 23,000 is about 2 weeks.

Be careful when Hang Seng goes for its major (IV) consolidation. It will have an impact on Bursa Malaysia.

Friday, September 18, 2009

Intelligent words.

Asia's most wanted terrorist was shot dead by a crack Indonesia anti-terrorism squad yesterday.

Australian PM Kevin Rudd, "This is welcome news and I congratulate the Indonesian security authorities for their success."

"Unfair to label Malaysia exporter of terrorists just because he came from Malaysia."

"I am sad that we did not get to rehabilitate him."
"I am sad because a life is a life."

He is such a nice person with such a kind heart so close to his keris.

I am sure in the 2002 Bali Bombing where 202 people were killed and the JW Marriott and Ritz-Carlton suicide bombing where 14 people were killed, our nice YB must have cried like a baby.

Thursday, September 17, 2009

Dow - ready to break the upper trend line?

When you are riding on a small bull it is always good to watch out for the big bear at the back.

Refer to my previous post on September 10, at that time Nasdaq has already broken its upper trend line, S&P has just reached the trend line and Dow was moving towards the line. After taking a short pause on Friday September 11, the three indices continued to move higher.
Nasdaq has moved further away from the resistance line without any hesitation.

S&P was able to punch through the upper resistance level at the close of Wednesday's session

Dow has finally reached the upper resistance line. It's just a matter of time before it breaks the resistance. At this juncture, the major wave B scenario can be put aside for a while. Assuming Dow is going to follow the footsteps of Nasdaq and S&P, let's look at the likely chart patterns for Nasdaq.

After completing its major wave (II) in early July, the first possible wave count is as shown above. Nasdaq is currently in sub-wave iii of wave 3.

Another possible wave count is as shown above, Nasdaq has completed a-b-c wave 2 and is currently in wave 3. The magnitude of next consolidation will determine which is the right count.