Monthly Archives: August 2013

Time to Rest? NO!

The sentiment was extremely bad today with the CI continuing its losing streak.

Are you stressed-out already? Wanna take a break? No, you shouldn’t. This is part and parcel of trading. Don’t avoid it. Face it and learn how to deal with the emotional stress. No, Im not telling you to keep trading, but instead open your eyes wide and observe every single stage of the downtrend to familiarize yourself with a bear market. Spend more time on doing research now and try to identify shares that are beaten down not because of deteriorating fundamentals but due to panic selling, so that you are ahead of the others and can take immediate action once prices have stabilized.

Apart from that, now is also a good time to ask yourself some serious questions. You need to know yourself better in order to strive in this industry. You need to know why is it that you succeed or failed, so that you can duplicate your successes and reduce your mistakes in the future. Here are some of the questions that you may want to ask yourself:-

KLCI: The Big Crash

CRASH!!! 32.94 points down for our local bourse as foreign funds continue to liquidate their investment in Malaysia, creating panic among the local investment comunities. This massive selldown did not come without any signal. If you are sensitive enough, you would have notice that from the beginning of August, despite gainers outnumbered losers for 9 consecutive days (This is considered extremely bullish as a winning streak of more than 6 days is very rare in Malaysia), the market merely rallied by about 30 points, which was about 3.33 points a day on average. The lack of strength in buying tells us that the sentiment was actually pretty weak. There was no follow through buying. On the 7th of August, divergence in the true sentiment of the market (under Sentiment Analysis) indicated that the uptrend is about to end. Also, since last Tuesday, penny stocks have been dominating the top volume list. As was mentioned in the facebook fanpage, when it’s not the year of pennies and yet they dominate the top volume list, it’s an indication that the market is overheated. Any uptrend is bound to end soon.

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