FBMKLCI Futures - Daily Message 2 Feb 2011

FKLI bias stays down and a close below 1513 should keep bias intact. Do note however that buying was seen all day Monday as futures opened low and closed at day high.
Support remains at psychological 1500, which supported price twice in the past week. Further down, important bottom is 1485, the low of December.
Resistance is expected at 1515, which stopped price two times on Monday and then rebound high of 1533. A close above 1515 may turn bias up.
The longer term trend is still up.
Sentiment stayed weak as again futures was priced cheap.
21 day moving average is now 1550

Hang Seng Futures - Another Failed Breakout?

Another failed breakout like it did in October, though the magnitude of selloff is markedly lower. As such, price is still trending lower short term but we believe the longer term trend is still up. Price is still above trendline (chart 2) and weekly moving average still points up (chart 3).

Price may revert to up as: 1) 30 RSI is most oversold since Dec (chart 1); 2) Price is still trading above ‘healthy’ retracement level of 61.8%, or 23200, coincidently the double bottom neck in late Dec (chart 1) 3)Positive sentiment in the past 2 weeks and 4) Reaching support levels in stochastics and the uptrend (chart 2).

If so, price should arrest its fall and an eventual close above moving average (chart 1) should confirm the return of buying strength. Preferably, price closing above 24000 and 30 min RSI goes back above 60.

Otherwise, selling should continue and a close below today’s low and especially below 23200 will keep the short term trend down. Further support is expected at 22800 but expect increased selling pressure on successive close below Dec low of 22300.

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FBMKLCI Futures - Testing Times

Price is on a short term downtrend within the longer term uptrend. The longer term trend is still assumed to be up given that there is yet clear signs that the trend has changed (chart 2 &3). However, question remains if the current move is a start of a primary or just a secondary.

A prudent view in the eyes of Rhea (point 1 & 2) on current short term downtrend is likely be a secondary:

1) Price yet to make a lower low, hence still on uptrend,

 2) Both mid and small caps index too has yet to make a lower low;

3) Cycle study suggest trend is still up and possibly making a bottom soon; and

4) Hammer last Wednesday.

On the other hand, given confusing nature of most correction, there may be shout of a start of primary:

1) The two week downtrend retraced more than 61.8% rally of Dec – Jan rally,

2) Failed breakout of 1530 high; and

3) RSI yet to reach oversold level.

Therefore, should scenario 1 occur, the 1500 should hold, price trades higher this week and eventually trading above 1580; starting a new cycle and nullifying the 2-week long black candles. Otherwise, look for break of 1500 level, possibly 1470 and a weak eventual rebound, below 61.8% retracement level.

The bears may also reason with weak Jakarta, Mexico, India and resistance failure of US on Friday while others may rebutt with still unfalling JPY, AUD and regional currencies.

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FBMKLCI Futures - 31 Jan 2011

The close below 1522 has turned FKLI bias down again and a close below 1516 likely keep bias down.
Support is expected at 1513, which held price last week and the the psychological 1500. Important support level is at 1485, the low of December.
Resistance is not 1533 and close below it may turn bias up. Thereafter 1550 and the gap two weeks back.
Longer Term trend remains up.
Sentiment stayed weak as futures was at discount to cash.
21 day moving average is now at 1551

FBMKLCI Futures - 28 Jan 2011

There is a slight upward bias to FKLI and a close above 1530 should confirm that. However, a close below 1522, Wednesday afternoon's low, may see downward bias returning.
Resistance is still Wednesday's high of 1530, then Monday's low of 1538 and then 1550.
Below 1522, buyers may come in at 1513 and then psychological support and low of week of 1500.
The longer term trend is still up.
Sentiment turned weak again as futures was priced cheap and price has to close higher to keep rebound intact.
21 day moving average is now at 1551.

FBMKLCI Futures - Daily Message 27 Jan 2011

FKLI bias appears neutral though a close below 1523 will keep bias down.
Support is expected at 1513 which supported price in the morning and then psychological 1500 where price bounced of on Wed's open.
Resistance may come at 1530, yesterday's high, and a close above that like change bias up. Further selling may also come at 1537 and 1550.
The longer term trend is still up.
Sentiment however is positive as futures was at premium to cash. Look for sentiment to turn weak should price fail to make higher closes.
21 day moving average is still at 1550.

COMEX Gold - Looking for Intermediate Term Bottom

Price is weak on the short term basis but is still on a long term uptrend. However, intermediate term bottom could be in the making.

On the short term basis, price is still making lower low and is below its 100 period moving average and its downward trendline (chart 1). However, on a longer term basis, uptrend should still be in place as the long term uptrend has yet to be violated (chart 2) while intermediate term low of 1160 still holds (chart 3).

Nonetheless, price could be making an intermediate term bottom as:

1) approaching long term RSI support of 35;

2) price made a measured second move down, second downleg was of same magnitude of the first (chart 1) and

3) sentiment seems to mirror prior intermediate bottoms, open interest waning and commercials are less bearish.

But for such bullish scenario to occur, price has to show strength in the short term by trading above the moving average and the downward trendline, and preferably trading above the support resistance level of 1354. Otherwise, expect downward pressure to continue.

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