Tuesday, April 30, 2019
Monday, April 29, 2019
Saturday, April 27, 2019
DXY and USDMYR
The chart clearly showed by Mid March the Dollar strength has no effect on weakness of ringgit. It is more of withdrawal of hot money ie foreign fund Managers from the list cal market. Currently most people are not that bullish of the Dollar ie waiting it turn diwnwards in near future.
Friday, April 26, 2019
Opening Range (OR) method
One way to identify key price points in the market is when the market sentiment is likely to lead change in the market/stocks short term direction or an acceleration of its current momentum. By using these key inflection points we could read market sentiment and anticipate a market or stock’s next move.
Normally the first 5 minutes or 30 minutes or even rhe first hour of trading, traders or investors are reacting to any previous day or overnite news, This made such opening period emotionally charged and informationally rich. Therefore, there are a lot of potential reasons for the flurry of trading activity that occurs when the market opens. The initial flurry of activity will generally settle down by the end of 5 min to one hour.
I like to define the flurry activity as the opening range (OR) , and I refer the first 30 min as the OR. The OR is basically the price high and low for the day let say 9.am for Bursa Malaysia or at 9:30 am for FCPO. The OR is like a price discovery period. The battle between bulls and bears in the morning will often determine the significant price levels for the rest of the day
The most basic application of OR is when price trade above the OR’s high we are in bullish bias and if price below OR’s low we should have a bearish bias.
Thursday, April 25, 2019
Current Account
Among the 3 countries Malaysia has the lowest ratio but since 2018 ringgit performance of better than S Korea. This could be that S Korea and Thailand historically maintain a ratio of 7, while Malaysia is half of that. For the last two years, S Korea rstio has fallen to an average of 4.
A h8gh current ratio for both countries indicate that both countries export morevthan import while local consumption is relatively low.
Let see the equation.
Nation Income Y
is Y=C+I+G+(X-M) which is equivalent to
Y-C-G-I=X-M
Consolidating C and G, therefore Income(Y) less Consumption and G is equal Saving (S)
S-I = X-M, X-M is the current account ignoring the less significant interest factor and transfer factor.
Note : Current Account is the sum of the balance of trade (exports minus imports of goods and services), net factor income (such as interest and dividends) and net transfer payments (such as foreign aid)
Small cap
Similar to mid caps, FBMSCAP reached high on January, fall to the low on June,recovered only to below
Mid Cap
FBM70, the mid caps indicator make a high in late January and tumbling down up to July.A recovery to 50.0 retracement before continuing downward. By early January recorded a bottom before rebounding. Currently has penetrate the 61.8 level and testing August high.
KLCI
FBMKLCI went toppish on early April and tumbling down after GE14 on 7 May. By July it found its bottom and rebound to slightly above 61.8 but the momentum could not be sustained and fall to a low in December. Recovery was only at 50.0 retracement.
Tuesday, April 23, 2019
November 2018 to the present
For this chart it is a daily chart of USDMYR. We used this chart for short term analysis from the resistance level of 50% in Nov to the present. The USDMYR went southward before retracing/rebounding on 20 March 2019. The subsequent rebounding was very steep without any meaningful correction. It went passed the 38.2 and 50.0 retracement effortlessly before meeting the deep retracement of 61.8 . That level coincide with the resistance point A.. ie the red horizontal line. Ringgit showed strength if it could avoid any break of the 61.8 retracement.
Ringgit from OcT 2016 to April 2018
This is a weekly chart of USDMYR from the top on Oct 2016 to the bottom of April 2018.Current USDMYR is ruled by this range. On April 2018,USDMYR rebounce or retrace the downward moved from Oct 2016 High, eased through the 38.2 retracement before meeting the resistance at 50.0 retracement in Nov 2018. Following the script of Fib Retracement Theory.
Fib Retracement
Fibonacci or Fib Retracements are ratios used to identify potential reversal levels. These ratios are found in the Fibonacci sequence ie
0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610……The sequence was credited to an Italian mathematician Leonardo Pisano but actually he learned it from Indian mathematician and the Indian got it from Tok Arab.
The most popular Fibonacci Retracements are 61.8% and 38.2%. And also 50%.
How do we get the 61.8 figures.
A number divided by the next highest number of the fib sequence approximates 0.6180 (13/21=.6190, 21/34=.6176, 34/55=.6181, 55/89=.6179 etc….). The approximation nears .6180
For 38.2:
A number divided by another two places higher approximates .3820 (13/34=.382, 21/55=.3818, 34/89=.3820, 55/=144=3819 etc….). The approximation nears .3820 as the numbers increase. Also, note that 1 - .618 = .382
….the proportion of .618034 to 1 is the mathematical basis for the shape of playing cards and the Parthenon, sunflowers and snail shells, Greek vases and the spiral galaxies of outer space. The Greeks based much of their art and architecture upon this proportion. They called it the golden mean.
The 50% retracement is not based on a Fib sequence. Instead, this number stems from Dow Theory's assertion that the Averages often retrace half their prior move. 50% is also on Gann Cycle retracement in quadrants ie 25, 50, 75 and 100.
There are two other ratios ie 78.6 and 23.6 which I ignored it... I prescribe to the method of KISS (Keep It Simple, Stupid)
Retracement levels alert traders or investors of a potential trend reversal, resistance area or support area. Retracements are based on the prior move. A bounce is expected to retrace a portion of the prior decline, while a correction is expected to retrace a portion of the prior advance. 38.2 retracement levels is considered a shallow retracement while 61.8 is a deep retracement... beyond a 61.8 is full retracement which subsequently a trend reversal. Ok let analyse the USDMYR chart based on Fib Retracement. Note... USDMYR is based on MYR or RM per one USD.. in other words if the chart moved upward or North means ringgit is weakening while the chart moved in reverse means ringgit is strengthening.
Thursday, April 18, 2019
Ringgit vs Asian Currencies
Are Ringgit that bad? Just look at the table below. YTD is year to date.
CPO
Resistance at 61.8% or 2234 shoyld be taken out in the coming days to reaffirm the uptrend is still alive.
Bursa Malaysia
KLCI and 70 caps look shakey.... SCAP early indication for reversal after 6 down days
Friday, April 12, 2019
FBM KLCI and USDMYR
The top two losers are gloves makers. Since 2017 their margin has been squeezed due to market competition. Ringgit strengthening also affected the margin since 80 % of their products are exported. Public Bank are solid bank but their valuation is on the high side. With the retirement of the founder Chairman, Teh Hong Piau the bank is moving into a new era where investors are still not sure where the direction lead to. Others losers are GLCs. With PH government now on the last leg of cleaning the mess from the previous government, hiccups are here and there. Stocks of KLCI components are held by local institutions and foreign investors. Foreigners buying locals shares are not only concern on the shares valuation but also on exchange rate of the ringgit. So the KLCI is intertwined with USDMYR.
Is FBMKLCI represent KLSE sentiment?
The small cap index and next 70 large cap index showed a very positive gain, while the enas index showed a small gain but it moves mirror to the KLCI.
The 30 blue chips are moving in reverse direction of the general market. KlLCI is bearish while other indexes are bullish.
Thursday, April 11, 2019
FTSE and Bursa Malaysia ( FBM)
The FTSE Bursa Malaysia KLCI, also known as the FBM KLCI, is a capitalisation-weighted stock market index, composed of the 30 largest companies on the Bursa Malaysia by market capitalisation that meet the eligibility requirementsof the FTSE Bursa Malaysia IndexGround Rules. The index is jointly operatedby FTSE and Bursa Malaysia.
Against other Asean countries
Dince late march, KlCI performance wirst that Singapore, Thailand and Jakarta
Bursa Malaysia vs Hong Kong & Shanghai
Since early this year KLCI hak ved in reverse to the two bourses
oil
Price of oil has moved as expected ie reaching the reverse head and shoulders target.....USDMYR has moved in tandem with oil which is quite peculiar. So for the past few months oil prices have no bearing for the ringgit.
Ringgit and USD
Ringgit is falling smoothly toward the double bottom target of 4.13 against the USD while the Dollar index has heen on reaction downward bias. So what made ringgit so weak.
Wednesday, April 10, 2019
Tuesday, April 9, 2019
Sunday, April 7, 2019
Subscribe to:
Posts (Atom)
