KLCI Semi-Annual Review, Fund Flow Data, Quarter-Wall Cycle

Good morning,

(1) KLCI SEMI-ANNUAL REVIEW: Effective 24th December, Ambank and Topglove will replace TM and KLCC as our new KLCI constituents.

(2) FUND FLOW DATA: Here is another link for you to get the fund flow data. Do note that the data is only available on the next trading day (sometime between 8-9am). https://www.facebook.com/BursaMarketplace/

(3) QUARTER WALL CYCLE: It will only find a low next week. Be watchful of the turning point.

(4) FULL-YEAR REVIEW: As we usually position ourselves in December in preparation for the bullish 6-months cycle, I feel that it is only timely to have a quick review now instead of waiting for the year to end. Don’t feel too bad if you are not making money this year. You should be happy if you are not losing much. This year is easily one of the worst years, if not the worst, in this decade. Market volatility is not the problem. The main issue is not just with shares spending most of their time trending downward but also when they turn up, they generally shot up, making it hard to find a good entry point with good risk-reward since there is no meaningful retracement along the way. Looking at the index, the only time when one could reliably make money in the market is in January, first half of April, and July through August. That’s only 3.5 out of 11 months. Sentiment shows a much depressing state. The only time Sentiment was genuinely good (5 days of Green or more before it turns D again) was in the first half of January and second half of July. Meaning to say (i) sentiment is good only in 1 out of 11 months and most of the easy money could only be made in the 2 periods! (ii) if your invested period is more than 3-4 months, chances are you are giving back a lot of your gains made during those 2 periods. Comparing the number of red days VS green days in a month, red days have consistently outnumbered green days since May 2017 (except for July 2018, where we see a draw), marking the longest bearish streak in a decade. If you check the performance of each category of stocks (KLCI, MidCaps, SmallCaps, Ace, Fledging), you will also realize that, as of 7th Dec, they all registered the worst annual return since 2008 (-6.5%, -16%, -29.5%, -29%, -20%). While the traditional presidential cycle states that pre-election and election years in the US tend to be good years, my more advanced presidential cycle predictive tool does not share the same bullishness this time around (It’s saying 50-50 chance as at Nov). Moving on, its safer to stay at the sideline until my Sentiment Analysis shows a turn to U. I will share more about what to expect next year on the 1st of January 2019.