This upcoming week beginning 25 August is an interesting week. According to my Twitter post last week, I do mentioned that Dow Jones, Kuala Lumpur Composite Index (KLCI) and crude palm oil futures (FCPO) might peak on last Friday August 22nd or today based on my Gann analysis. We do witness crude oil dropped -6.40 to close at 114.59 after a few days of sharp rally. This coming week will also determine the political fate of Malaysia with the by-election of Datuk Seri Anwar Ibrahim on the Aug 26th. Let us take a snapshot of this week possibilities based on technical analysis.
From the above Dow Jones Industrial Average (DJIA) daily chart, last Friday was a big rally when Dow Jones was up about 200 points. However, it had broken down from the bear flag chart pattern and this Friday rally could be a corrective rally. It had also hit the resistance line of previous low of 11,635 points and also the top of the bear flag channel resistance line. It almost hit the Fibonacci 38.2% retracement resistance line. From here, it is very hard to determine if the breakdown from the previous bear flag has completed the corrective chart pattern because from Elliot Wave Theory we could be expecting a possible zig-zag corrective pattern here.
However from the Dow Jones Industrial Average weekly chart, we could see potential rally to the Fibonacci 50% retracement line which is from 12,000 points to the Fibonacci 78.6% retracement line which is 12,641 points. We just got to watch the market for confirmation before trading.
Hong Kong Hang Seng Index (HSI) weekly chart showed a breakdown from the previous low of 20,572 points. We could expect HSI to trend lower from here. Bearish trend continues for Hang Seng Index.
As for Malaysia Kuala Lumpur Composite Index (KLCI) and its futures FKLI are having a few days rally from the bottom last week. However as mentioned before in my twitter post, KLCI will have its peak last Friday or today. Uncertainty surrounds the outlook for KLCI as the outcome for tomorrow by-election is still a major question to many investors. I am seeing a downtrend continuation from the peak of Friday session.
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August 27th, 2008 at 9:00 am
Crude oil, crude palm oil, Dow Jones and KLCI peaked on Friday and fell heavily on the Monday as mentioned in my post and twitter. We might see Hang Seng Index (HSI) peaked yesterday or today before continuing its fall. Crude palm oil fell about -200 points yesterday.
August 27th, 2008 at 4:05 pm
Hi, very good analysis. In fact I am mesmerized with ur explanation of the chart. I am also an analyst, pls do visit my blog…
Thanks…
August 29th, 2008 at 5:53 pm
Hi Harish…
Thanks. I had check out your blog as well. Good work done, my friend. Keep sharing.
September 5th, 2008 at 10:10 am
Update for today: Hong Kong Hang Seng Index (HSI) fall this morning by -555 points lower at 19833. Singapore Straits Times Index fall by -54 at 2572. Japan Nikkei 225 fall by -317 at 12240 points.
September 5th, 2008 at 10:16 am
Oh by the way, yesterday Dow Jones fall by -344.65 (-2.99%) to close at 11,188.23, Nasdaq Composite fall by -74.69 (-3.20%) to close at 2,259.04 while S&P 500 fall by -38.15 (-2.99%) to close at 1,236.83.
Malaysia opposition leader Datuk Seri Anwar Ibrahim had won the Pematang Pauh by-election and was heading towards toppling the ruling government on the Sept 16. In my personal opinion, that will come true.