Saturday, June 28, 2008

KLCI Re-Visit: South Please

Since my previous post dated 20/Apr/08: M'sian Market Bottoming Out? http://bursabulltrader.blogspot.com/2008/04/msian-market-bottoming-out.html

It seem that KLCI will be going to touch again the low 1157 created on 10/Mar/2008. This time it will be going further south (depend on how strong is the 115x support - double bottom). Estimated downtrend target: 1000 - 1100.

Good Luck!

Friday, June 27, 2008

Crude Oil Price at Peak?

Recently oil price stage a continuos rally to new high. As for my opinion, the price now is at the peak level. Possible there will be some push up before trend reversal take place. Also it might have extended rally target which can reach $165.

Well, once the oil retreat (best below $110), it wil be a good time for the stocks market. Probably next year. :-)


Happy Trading!

Monday, June 23, 2008

Volatile Market Investing

It is easy to be complacent in a rising stock market. There is only one question they want answered and it is something like "What stock should I buy now?"

When the market reverses and starts a downward journey, that's the time investers begin urgently seeking answers to an entirely different set of questions. What should I do now? Do I hang in there? Sell everything and move to cash? Is this a buying opportunity? Should I temporarily move to the sidelines and then jump back in when the stock market turns around? How long is this down market likely to last?

Market declines can be unsettling and even outright scary. You've probably asked these questions at some point in your investing life. Hopefully, you have asked your financial advisor another sort of question: Can you help me construct my financial program to last and help me reach my long-term goals?

If you and your financial adviser have already created such a program, you likely already know the answers to the questions above. For the people who have set up a long-term plan, the best thing they can do is - nothing. Long-term investors in a declining market will do nothing that upsets their established program.

Go Back To Basics

Market declines present an opportunity to discover how solid your financial program is. Any weakness will show up. That’s why this is a good time to chechk on four basic investment fundamentals to help you survive a down market - and perhaps even take advantage of it.

Diversify

Spreading your risk by investing in a carefully selected mix of mutual funds that invest in stocks, bonds and money market instruments is a good idea any time. In the global marketplace we have today, consider diversifying into an international or global fund. Although the U.S. stock market has an impact around the world, other markets move in different economic and national cycles. While your U.S. stock funds may show losses, diversified international funds may lose less or even gain.

Keep a Long-Term Perspective

Time in the market is important - not timing. Diversified investment portfolios are not immune to a bear market, and it’s tempting to dump all your stock funds. Waiting in a money market account for better times seems like a smart thing to do, so you are ready to buy into the market when the recovery begins.

How do you know when the market recover begins? What day is the right day to buy more stock? If you miss the right time, you might lose a large part of the profits. If you had missed the 10 best days of the S&P 500 Stock Composite Index between January 1, 1990 and December 31, 1999 your return would been 41% lower than if you were in the market for the full 10 years.

Invest in Bad Times and Good

The single best way to invest regularly is called dollar cost averaging. This strategy calls for investing the same amount at consistent intervals, such as once a month, every quarter or even every pay period. By doing this, you don't have to try to guess which way the financial markets will move and you won’t be waiting around for the right time to buy.

Using the dollar cost averaging method is one way to take advantage of a down market. As you invest regularly, you end up buying more shares when the price is down. View a down market as an opportunity to buy good companies at lower prices.

Don’t Forget Those Dividends

Even when company share prices will be impacted by a bear market, this doesn’t mean that the companies themselves are doing poorly. Many companies pay dividends at the same rate during a bear market as during a bull market.

Market Declines Are Natural

A few facts that might help put market declines in perspective. Like the seasons, they are a natural part of the landscape. Since 1900, there have been 285 “routine declines” of 5% or more, 91 “moderate corrections” of 10% or more, 43 “severe corrections” of 15% or more and 26 “bear markets” of 20% or more. If that doesn't show declines are part of being in the stock market, then what will..

Even if you haven’t lived through a really tough bear market, you’ve probably seen a lot of volatility. When you chose a good financial adviser, you will be in good shape to withstand the next down market.


Roger Sorensen

Saturday, June 07, 2008

Oil Zooms Higher To Record $139

Oil zooms nearly 9 percent higher to record $139

NEW YORK (Reuters) - Oil jumped nearly 9 percent to a record $139 a barrel on Friday, extending a two-day rally to more than $16 as the slumping U.S. dollar and mounting tensions between Israel and Iran attracted a stampede of buyers.

Oil prices could top $150 by July 4, one of the busiest U.S. travel holidays, as strong demand in Asia triggers a slowdown in shipments of crude to the United States, investment bank Morgan Stanley said.

"We are calling for a short-term spike in oil prices," the bank said in a research note.

U.S. crude settled up $10.75 at $138.54 a barrel before touching an all-time high of $139.12 in its biggest gain in dollar terms on record, adding to a rise of $5.49 on Thursday. London Brent crude settled $10.15 higher at $137.69, off the record $138.12 hit earlier.

"It's eye-popping. It's absolutely stunning," said Chris Feltin, analyst at Tristone CapitaL Inc in Calgary.

Oil has risen 44 percent this year, threatening economic growth in major consumer countries including the United States, whose economy already is hobbled by a housing crisis.

Analysts have said the dramatic rally in oil prices is due to rising demand in China and other developing economies as well as an influx of cash from investors seeking a hedge against the weaker dollar and inflation.

The greenback extended weakness against other currencies Friday on data showing the U.S. economy lost jobs for the fifth straight month and the unemployment rate shot up to its highest in more than three years.

The drop in the dollar added to losses from Thursday when European Central Bank President Jean-Claude Trichet said a number of policymakers wanted higher interest rates, possibly as soon as next month.

"Obviously there's a lot of concern on the economic impacts of a weakening U.S. dollar. That seems to be driving some of the momentum here today," said Feltin.

Further support came from remarks by Israel's transport minister that an attack on Iran's nuclear sites looked "unavoidable." It was the most explicit threat yet against Tehran from Prime Minister Ehud Olmert's government.

Worries of a potential disruption of the OPEC member's crude supply have helped support prices over the past year.

"We've had a huge historic rally on little fundamental input, other than the weakness of the dollar and the news this morning out of Israel that seems to have pushed some geopolitical risk premium back in the market," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

BULLISH BANKS

Morgan Stanley forecast the diversion of Middle East oil shipments away from the United States to Asian markets could push U.S. crude to $150 a barrel by the U.S. July 4th holiday.

"Middle East oil exports are stable, but Asia is taking an unprecedented share," Morgan Stanley said in a report, adding U.S. inventories have dropped by 35 million barrels since March.

"Robust Asian non-OECD demand growth, coupled with a stagnant global oil supply backdrop, appears to be pricing out Atlantic basin consumers while at the same time driving Atlantic inventories to critically low levels."

The report added to a string of upward price forecast revisions by analysts, with Goldman Sachs in May predicting prices could tip $200 a barrel within the next two years.

A six-year rally in oil has sent prices up six-fold as demand from emerging economies such as China and India strain supplies.

High prices have started to eat away at global growth however, with some consumers such as the United States and the United Kingdom showing signs of lowering consumption.

Some Asian governments -- including India -- have decided to cut fuel subsidies, stirring concern rising prices could cut further into demand.

The International Energy Agency (IEA), an adviser to 27 industrialized countries, said it may cut its 2008 demand growth projection further after having already more than halved it to 1.03 million barrels per day (bpd).

Thursday, June 05, 2008

India, Malaysia Raise Gas Prices

Soaring cost of crude oil forces India to raise domestic fuel prices 11%; Malaysia, hit by massive subsidy bill, will raise gasoline prices by 40%.

NEW YORK (AP) -- Soaring oil costs are forcing India and Malaysia to raise fuel prices by reducing the subsidies they give to their residents.

Oil prices have doubled over the last year, spiking as high as $135.09 a barrel on the New York Mercantile Exchange on May 22 before falling back some. On Wednesday, the contract fell below $124 a barrel.

India
India imports nearly 75% of the crude oil it needs and it controls domestic prices of all fuel products, from gasoline to cooking oil.

But those price controls have caused state-owned oil companies to lose billions of dollars.

Petroleum Minister Murli Deora told reporters that gasoline prices will be raised raised 49 cents a gallon, and diesel prices 30.4 cents a gallon.

That's an 11% increase in New Delhi, the capital, where gasoline will be hiked to $4.56 a gallon. Fuel prices vary between states, which also impose their own taxes.

Cooking gas will be hiked to $1.25, per 30.8 pound cylinder. The increases go into effect at midnight Wednesday.

To help state-run oil companies, the government was also cutting the excise duty by 5% on gasoline, diesel and other petroleum products.

Communist parties, which are members of the ruling coalition, announced weeklong street protests across the country to force the government to take back its decision. They said in a joint statement that the government should further lower excise duties on petroleum products rather than raise prices.

Wednesday's price increase followed a similar move in February - but far from covers the gap with global market prices. Deora, the oil minister, told reporters that the moderate price increase was a compromise by officials "committed to protecting the interest of the common man as well as ensuring the financial health of the public-sector oil marketing companies."

The government is also mindful that an election must be held by the middle of next year, at the latest, and that price increases are unpopular.

"Are you happy or unhappy? People should compliment the government," Deora said, pointing out that the hike was far smaller than the recent runup in global oil prices.

At the current level of oil prices, Deora said India's state-owned oil companies were projected to collectively lose $58.4 billion this fiscal year through March 2009.

Malaysia
Malaysia said Wednesday it will raise gasoline prices by 40% to reduce the government's massive subsidy bill, a move that is expected lift the inflation rate to 5%.

The pump price of gasoline will rise on Thursday to $3.30 a gallon, from $2.32 a gallon now, Prime Minister Abdullah Ahmad Badawi told reporters.

"We cannot naturally keep subsidizing at the current rate," Abdullah said.

He said the government will also give a yearly cash rebate of $201 per year to owners of cars with an engine capacity of 2,000 cc or less to offset their burden from the massive hike. The money will be distributed to owners through post offices.

Subsidies have kept the price of fuel in Malaysia - a net exporter of oil - among the lowest in Southeast Asia. But the government says it can no longer afford to fund the subsidies, which are expected to cost the treasury more than $14 billion this year.

Abdullah said diesel prices will rise by $1.22 to $3.04 per gallon, a 67% increase.

Domestic Trade and Consumer Affairs Minister Shahrir Abdul Samad earlier indicated that further price increases were planned to bring fuel prices in line with global market cost.

"The long term plan is to increase it to market price," he said, suggesting gasoline prices could rise to $3.80 a gallon by August.

He said the move will save the government $1.29 billion a year. Shahrir said the hike in gasoline prices will likely increase the inflation to 5%.

Inflation hit a 15-month high of 3% in April, and was forecast at 2.5% to 35 for the full year before the new fuel prices were announced.

Fuel prices in Malaysia had been unchanged since February 2006, and economists have warned any move to abandon fuel subsidies completely may spark protests, push inflation sharply higher and weaken consumer spending - a bane to an already slowing economy.

The central bank has cut its 2008 economic growth forecast to 5% to 6%, from 6% to 6.5% previously.

But the government does not expect any protest or public anger, Shahrir said. "We are still giving a subsidy" to less wealthy people, he said.

Still economists were not convinced.
"This is quite a drastic measure," said Gundi Cahyadi, an economist with Singapore-based economic think-tank IDEAglobal. "In the long-run, it's good but the immediate impact will be negative. You can expect a slowdown in the economy to below 5.5% this year and probably into next year," he said.

He noted that Malaysia's gasoline price hike was the steepest in percentage terms among Asian countries such as Indonesia, Taiwan and India that have recently cut fuel subsidies.

It will relieve the government's financial burden over the long term but will also push up inflation and depress consumer spending and business investment, he said.

Cahyadi said the new fuel price is a "great risk" to Prime Minister Abdullah Ahmad Badawi, who is fighting for his political survival after his ruling coalition suffered election losses in March partly due to the rising cost of living.