Category Archives: E&O

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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