Today was indeed a violent day for United States financial markets. Dow Jones Industrial Average (DJIA) fell by 679.95 points (-7.70%) after official announcement that United States confirmed in recession. NASDAQ fell by 137.50 points (-8.95%) while S&P 500 plunged by 80.03 points (-8.93%). It is another day with huge movement. I said in my last post that a new beginning is possible. I guess I am wrong on this looking at the market behaviour today. Anyway, we trade by the chart and self-opinion could be wrong. For now, I turned to short position as trading signal was triggered for Malaysia FKLI.
In my previous post, I do give my view on why I think that the market is going to turn bullish. I guess at this present moment, I am wrong. The previous rally even with volume coming in was nothing more than a corrective rally to sell and not to buy. For Malaysia market if it managed to close below 800 on a daily chart then we have a confirmation that the bear trend continues and it is heading towards 745 for the next stop. However, please be reminded that 745 is not final stop or projected bottom. It is a just a pivotal point where the market might rally from there for a moment. For now, let us take a look at Malaysia KLCI futures market.
As we can see that the previous rally was nothing but a bear flag chart pattern. How could I miss that simple and yet profitable chart pattern? From here, there is only one thing to do and that is to short the market until it shows sign of rebounding. Clearly from the candlesticks chart above, a breakdown from the bear flag which signify more downside to come. This chart pattern has been a very reliable source of trading signal if we know how to recognize it.
Next target for FKLI would be 745 points. We would get confirmation only when the FKLI break and close below the previous low of 800 points. I would say this Dec 5th would be a date to watch out according to my Gann analysis. It might carry forward a few days to Dec 10th – 15th. We could potentially see either sharp rally or big panic in the market of and I think panic would be more likely. Right now, we are getting used to 5-7% movement but how about 10-20% movement? Well, this few dates, we just have to watch out for very strong move.
Happy shorting, my fellow trader friends.
Related Trade-Or-Invest posts:
If you found this page useful, consider linking to it. Simply copy and paste the code below into your web site (Ctrl+C to copy). It will look like this: Malaysia KLCI sells down. U.S. recession confirmed.
No Responses to “Malaysia KLCI sells down. U.S. recession confirmed.”