Market Outlook - The Gathering Storm

During the past year, we have enjoyed the heights of the KLSE and the US Market Economy, the Peak of the Oil Price and now all major world market are cut by at least 30% to 50% from the Historical Height.

China's Olympic 2008 is finally over and all talk about China Market is superb and great investment is now unheard. Last year Oct 2007, the Shanghai Index was 6,123 Highest. Now its drop more than 66% to 1,803 points. Imagine their Investment was wipe out with over 66% Market Capital gone.

The Financial Analyst is very negative about the Doom and Gloom of the US Market and the World Economy especially with the US Bail Out of 700 Billion US Dollars. The biggest Financial Bailout since the 1929 US Great Depression. One which none of us had experienced in our life time.

10 Years ago, it was the Asian Financial Crisis and hence comes a recession which none of us experience before, but that only happen for Asian Country, US was not in Crisis yet. The worst is yet to come. Properchy of a US Economy Melt Down seems closer and more realitic then ever.

However, the biggest question you are going to ask yourself is?

What's in it for me? What can I do to earn Money? What can I do to stay out of this huge Recession that might be happening in months to come?

The Malaysian Stock Market is so unstable because we are not only facing world Economy Crisis, but also a Polictal Effect due to the 8th March Election Results Fallout. GLC Counters has fallen down to historical high. Foreign Fund has pull out massively. Our KLCI has from from historical high of 1523 down to the Current 1018 now.

KLCI is hovering around 1020 to 930. But Stock Counters are moving like snails and market sentiment is extremely low for the past 6 months.

But the Derivatives markets has been very exciting.

Crude Palm Oil Price has Drop from 4400 to 1700 Level now.. that's like almost 2000 points down. KLCI Futures has drop till 930 from 1532 now.

In KLSE Futures 1 point is Rm50, 500 points would mean RM25,000 with just Rm5000 capital. If we entered and short at the right position using Charting Softwares like Winquote, NextView or OSK 188 OMS. Then you would enjoyed this exciting ride. :)

Futures Contract now is about RM4000 to RM4800 per contract to trade.

And imagine earning Rm25 per point for 2500 points of Crude Palm Oil. 2500 x 25 = Rm62,500 for 2000 points of CPO..... RM25,000 for every Rm12,500 Contract Traded

That was how Volatile the Market was for the past 1 year. Having Fun?

My Chart Shows how fast is Crude Palm Oil falling down now for the past few weeks. Imagine falling from 4485 to 1700 points in less than 6 months. Thats like 4485-1700 = 2785 points gone. With Rm25 profit per point for every 1 CPO Contract Traded. Thats a Profit 2785 point xRM25 = RM69,625 for every contract Shorted.

KLCI Futures was 1523 Highest, Currently Hovering around 930 points. Thats is 1523-930 = 593 points gone. 593 Points x RM50 = RM29,650.

With just Rm20,000 Trading Capital for KLCI Futures & CPO Contract. We had the Potential to earn almost RM100,000 during this financial Crisis period.

For those of you that is only interested in Trading Stocks, dont' feel despair. Imagine during the coming Recession, you can find another good stock like Public Bank.

Which Goes from RM0.50 to RM12.00 within 10 years. I think this is one of the best Blue Chips Stocks you will ever find on the KLSE. Malaysia's most well managed Private Bank.