Uncertain Market, Just Follow the Trend.

Last week has been a slight bullish week for KLSE & other Regional Markets. With the US Goverment Announcing a 1 Trillion Dollars Stimulus plans, Domestic Factors like UMNO Election pushing the local Stock Market. It pushed the KLSE up to 895 highest.

However, resistance formed at 900 points and it now seems that the market is waiting for more news to decide its trend. US market was down -149 points on Friday night. Most likely KLSE will open slightly high but then soften down.

One thing I must say about the US Economy System. Its funny that the US Government gives Financial Aid to AIG, and then allow AIG to pay "Bonues" using US Taxpayers money when a Company is already making huge losses for many years. The top 3 Troubled AutoMakers in US takes private Jet to ask for Financial help from the US Federal Government, AIG pays Bonus to almost USD100,000 each to their top Management. I wonder what we will hear next? Unemployment Rate is coming close to 10% at Historical High since the Great Depression.

Remember there market is always goes up and go down, currently it lacks the sustainability of a Long Term Bullish market. Trading Range is between 830 to 915 for now. Just follow the Trend Signals using 5 Min and 15 Min chart.

Fast Stockastic & MACD would show that market is softening down for the follow Monday. However, do remember that External Factors will also influence the market. Just monitor your trades and put a stop loss.

Rogue Trader

Last week I downloaded a movie called "Rogue Trader". It was the story of how a Barrings Bank Futures Manager - Nick Leeson that was attached to the Singapore Exchange, bankrupted the Worlds Oldest Private Bank, Barrings Bank, into a Loss of over 1 Billion UK Pound. His undiscipline trading cost him a loss of over 50 Million UK Pound per day.





Rogue Trader tells the true story of Nick Leeson, an employee of Barings Bank who after a successful spell working for the firm's office in Indonesia is sent to Singapore as General Manager of the Trading Floor on the SIMEX exchange. The movie follows Leeson's rise as he soon becomes one of Barings' key traders. However, everything isn't as it appears - through the 88888 error account, Nick is hiding huge losses as he gambles away Baring's money with little more than the bat of an eyelid from the powers-that-be back in London.


Eventually the losses mount up to well over £800 million and Nick, along with his wife Lisa, decide to leave Singapore and escape to Indonesia. Nick doesn't realise the severity of his losses until he reads in the newspaper that Barings has gone bankrupt. They then decide to return to London but Nick is arrested en route in Frankfurt. Nick is extradited to Singapore where he is sentenced to six and a half years in jail (but stays in jail for four years, because he was diagnosed with colon cancer). The film is based on Leeson's real life book, Rogue Trader.



Watching the movie made me realize the pure importance od being a discipline trader. A scene where he was sweating & vomiting in the Restroom was a true reality of how a Trader with huge losses must be feeling when we get Emotional, Greedy & Undiscipline with our trading.



Imagine Loosing 1 Billion Punds by Trading the Nikkei Futures. And all the poor guy wanted was to get the year End Annual Bonus which was less than USD1 Million! Because of one man's greed and undiscipline, the butterfly effect created bankrupted the World's Oldest Private Bank in the year 1995. It was then how ING bought over the Barrings Bank and because ING Barrings Bank. Imagine the looks on the Rogue Trader's Sweating Face when he knows he lost everything.



Remember to always plan your trade and execute the plan. Put Stop Loss and don't keep on adding to Loosing Positions.

Facebook Worth USD 3.5 Billion to 5 Billion

For those of you who have been using Internet for quite sometime, you will know of the website that's has been hot & popular for the last few years.

http://www.facebook.com/ was started in the Feb 24, the Year 2004. In 5 years time. Its has grown from a University Social Network into a popular Internet Based Social Networking Site. You can see it always every where. Now even AirAsia, CIMB and other Investment Bank are using Facebook & Blogs to advertise and create a closer customer ties.

Its just amazing how Internet has changed for the last few years and created so many Billionaires. Here is the financial history of Facebook:

Facebook received its first investment of US$500,000 in June 2004 from PayPal co-founder Peter Thiel.[26] This was followed a year later by $12.7 million in venture capital from Accel Partners, and then $27.5 million more from Greylock Partners.[26][27] A leaked cash flow statement showed that during the 2005 fiscal year, Facebook had a net loss of $3.63 million.[28]
With the sale of social networking website MySpace to News Corp on July 19, 2005, rumors surfaced about the possible sale of Facebook to a larger media company.[29] Zuckerberg had already said he did not want to sell the company, and denied rumors to the contrary.[30] On March 28, 2006, BusinessWeek reported that a potential acquisition of Facebook was under negotiation. Facebook reportedly declined an offer of $750 million from an unknown bidder, and it was rumored the asking price rose as high as $2 billion.[31]

In September 2006, serious talks between Facebook and Yahoo! took place concerning acquisition of Facebook, with prices reaching as high as $1 billion.[32] Thiel, by then a board member of Facebook, indicated that Facebook's internal valuation was around $8 billion based on their projected revenues of $1 billion by 2015, comparable to Viacom's MTV brand, a company with a shared target demographic audience.[33]

On July 17, 2007, Zuckerberg said that selling Facebook was unlikely because he wanted to keep it independent, saying "We're not really looking to sell the company... We're not looking to IPO anytime soon. It's just not the core focus of the company."[34]

In September 2007, Microsoft approached Facebook, proposing an investment in return for a 5% stake in the company, offering an estimated $300–500 million.[35] That month, other companies, including Google, expressed interest in buying a portion of Facebook.[36]

On October 24, 2007 Microsoft announced that it had purchased a 1.6% share of Facebook for $240 million, giving Facebook a total implied value of around $15 billion.[37] However, Microsoft bought preferred stock that carried special rights, such as "liquidation preferences" that meant Microsoft would get paid before common stockholders if the company is sold. Microsoft's purchase also included rights to place international ads on Facebook.[38]

In November 2007, Hong Kong billionaire Li Ka-shing invested $60 million in Facebook.[39]
In August 2008, BusinessWeek reported that private sales by employees, as well as purchases by venture capital firms, had and were being done at share prices that put the company's total valuation at between $3.75 billion and $5 billion.[38]

In October 2008, Facebook Founder Zuckerberg said "I don't think social networks can be monetized in the same way that search did... In three years from now we have to figure out what the optimum model is. But that is not our primary focus today."[40]

How I wish a Malaysian IT Company would grow so fast in value and was sold even to a higher bidder.

When Will the Economy Recover?

When will this wretched economy bottom out? The recession is already in its 15th month, making it longer than all but two downturns since World War II. For now, everything seems to be getting worse: The Dow is in free fall, jobs are vanishing every day, and one in eight American homeowners is in foreclosure or behind on payments.
But the economy always recovers. It runs in cycles, and economists are watching an array of statistics, some of them buried deep beneath the headlines, to spot the turning point. The Associated Press examined three markets — housing, jobs and stocks — and asked experts where things stand and how to know when they've hit bottom.
None of them expects it to come anytime soon.

———
JOBS
HOW BAD IS IT?: The U.S. unemployment rate hit 8.1 percent in February, a 25-year peak. The nation has lost 4.4 million jobs since the recession began in late 2007.
The job cuts began early last year, as the housing and construction industries slowed down. The collapse of the financial industry in the fall battered white-collar workers. Soon, layoffs spread across industries and income levels.

HOW MUCH WORSE COULD IT GET? The darkest days for the job market are almost certainly still ahead. With spending weak and credit markets stalled, experts think the economy will probably shed a total of 2.4 million jobs this year. That would mean an unemployment rate above 9 percent.

That would easily surpass the 2001 and 1990-91 recessions but trail the 10.8 percent rate of December 1982. Those expectations could be optimistic: The government's "stress tests" to check the strength of banks' balance sheets assume a 10.3 percent rate.
The job market will probably be weak for years, even if the economy starts to turn around next year. The unemployment rate may not fall back to its pre-recession level of 5 percent until 2013, according to Moody's Economy.com.

WHERE'S THE BOTTOM?: Economist Sophia Koropeckyj, a managing director at Moody's Economy.com, is keeping an eye out for two signs — an inching up in companies hiring temporary workers and a rise in the number of hours worked by those who have managed to keep their part-time and full-time jobs.

US Dow Jones Sinking Deeper & Deeper to 6500 Level

Its another troubling day for US Wall Street as Dow Jones sinks down to 6500 Level, sinking slowly like a Quick Sand.

Toyota today announced that it may cut down its production, which steers Bankruptcy fears among the Japan Auto Part Suppliers if the Government don't provide Financial Aid to the Car Makers.

General Motors, previously World's Biggest Car Manufacturer announced its Annual Report which the Company Auditors mentioned "Substantial Doubt" that GM would generate enough revenue to maintain its business unless more government aid is given. Looks like more negative news ahead.

Below are the latest Charts for US Dow Jones & KLCI Futures Spot Month. its on a Downtrend.

More Bad News as US Dow Jones Slips Below 6780

Fear & Gloom shadows the World Market as US Dow Jones Slips below the 6780, even went as low as 6755. US Dow Jones are now at the Lowest Level in 12 Years. US Dow Jones Historical high was 14,198. It has dropped more than 53% in within the last 18 months.

Scary huh? Imagine the wealth of most Billionaires has reduced to more than half gone within a period of 18 months.

An article today shows that Japan is now in the worse Recession since the World War 2 era. Suffering more than US & Europe. Toyota the world biggest Car Maker suffered a USD$ 3.6 Billion Dollar Loss. AIG Slumps as it reports a total loss of USD$62 Billion for the last quater 2008 4Q. Japan suffered the worst GDP drop in 35 years history. Singapore Economic Growth dropped 5%, the worst since 1965. This is even worst than 1997/98 Financial Crisis. We are not doubt in the Eye of the Storm. 12 Years ago its was only a Asian Financial Crisis. Now, its a World Market Problem.

These are hard times for alot of companies for the last year, its almost a never end of bad news from the Financial Market World Wife. So brace yourselves for a ride.

Dow Jones Slipping Lower - 13 Year Low

Dow Jones is now slipping near the 7000 Level. It is now 13 year Record Low. Once it Breaks 7000. The Support is gone. I expect a possible massive Market Sell down coming soon.

The Chart Below show that Dow Jones is on a Down Trend.

Since KLCI Follows US Market Closely. Most likely Monday will be a Down Trend as the dissapointing 0.1% GDP Growth and Dow Jones has also drop another 119pts to 13 year Low.

Attached is the KLCI Charts. The Next March Spot Month Contracts will start on Monday.

Malaysia 2008 4th Quater 0.1% GDP Growth Only

Friday night's Announcement of Malaysia's 0.1% GDP Growth for the 4th Quater of 2008 was no surprise. A huge Drop from the 4.7% Growth in the 3rd Quater. A Financial Recession is defined when there are 2 consecutive Negative Growth of two Quaters.

Meaning to say, if 1st Quater and 2nd Quater of 2009 is Negative Growth GDP, Malaysia would be officially in a National Recession. We are in no doubt a Financial Crisis world Wide now.

To imagine that a few listed companies are being delisted. And even the Famous FERRE Fashion Brand Company has applied for Bankurptcy in Europe. CitiBank has requested more fund injections from the Goverment. Singapore GIC has taken up to 11% is CitiCorp Holidngs and has become the 2nd largest stake Holders in CitiCorp.

Things and looking more grim and negative as the day goes by where there are more bad news coming out everyday.

F&N Malaysia have lost the Coca-Cola Frenchise. Malaysia Goverment will launch a new Stimulus on 10th March this month.

Do be cautious when trading in the month of Feb & March. Pass History shows that this two months are very volatile and are more down trend and also when Major Sell down occurs.