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Just in case you don't regularly visit KLSE TREND by TZ, with TZ's permission, I would like to share with you this post.

Copied from http:// klsetrend.blogspot.c om/
with added emphasis.

Thursday, February 21, 2008
When will KLCI bottom out?

I have been pretty busy shuttling between KL, Singapore and Australia. The Chinese New Year is nearing the end. How many of you own stocks that are spared from the market fall? How many blue chips are spared during the slide? In all honesty, no matter how blue the chips are, rarely they will be able to go against the trend. I have been able to weather the storm simply because I have an option of trading in futures market. I have mentioned earlier that STOCKS are meant for UP trend. Futures are meant for both UP and DOWN trend. As for those who continue to follow self-proclaimed GURU in stock picking, I hope you have not bled.

In a falling market, there will be intermediate rallies (rebound) till the market reaches the bottom. Yes, we can time the market to capture rebound opportunities. With experience and chart analysis you can buy into a falling market. Catching falling parang or knives! But remember to limit your exposure in a falling market. When the market falls, news will be busy blaming oil prices and inflation. Always reasons and excuses AFTER the event. Not BEFORE it happened! We have read and heard many BULL stories in the past. Let us see how the BEAR stories unfold this year. While all this is developing, I will continue to roll over KLOFFE short contracts until the trend reverses. Learn to flow WITH the tide.

In a falling market the out of money warrant PREMIUM will be reduced significantly. In a rising market the PREMIUM will get bigger overtime due to higher expectation (speculation).

Market prediction is easy. ACCURATE prediction is a challenge that requires experience and skill. To win one needs a very sharp mind irrespective whether you are in employment, trading or investing (noble word). I treat both trading and investing the same since both share the same ­object­ive > CAPITAL GAIN.

I can't tell you when the market will do a final bottom at this moment. Neither will I tell you the date market will bottom! Simply because the bottom has not been reached. Instead of trying to use the recommended criteria (volume, hammer etc) to confirm a bottom, I will let market moves ahead and I trail. Yes, I will use the charts to track the velocity and potential trend reversal. I analyze the market charts. I am immune to REASONS. The chart is my guide and I do not OVER ANALYZE the chart. I use simple technique to determine trend reversal. I use different technique to forecast market. The bottomline is I will let the market leads me.

Posted by PEDAS at 11:46 PM 0 comments Links to this post

Aye, good post.
Concurred completely - same message which I try to deliver as well actually - dont predict, just react.

No one has the ability to know where the bottom is until it is formed.

Buying at major bottom is normally safe. However, how long your money will be tied up there is any body's guess. At a bottom, the trend can go sideway, and before you know, it may dip and on track to form a lower bottom.

The most sensible thing to do is to wait for an uptrend to confirm before you buy. Any to do this you need to be very patient.

Have you ever watched how a cat catches it prey?
Someday when you have the opportunity, watch closely and you will know what patience is.

While patiently waiting for the KLCI to bottom out, like a cat waiting to catch its prey, consider also swiftlet farming!!

I don't know when it'll bottom out. I know that, for now, it is heading towards 1190.

jettze...how do you get 1190?

Look at fundamentals of a company rather than charts and economy.History has showed that no one can predict the economy correctly.If you invest using value as a guide,you have large safety margin which protects your capital.

How could the KLCI bottom out? The US is facing another problem relating to Bond Insurers like Ambac Financial Group Inc and many others.
In order to improve rating of mortgage and bond issues, the issuers packaged them by taking insurance on low grade mortgages and bonds.
Now the insurance companies are facing difficulties due to their losses on major defaults. Quantum of such issues still cannot be ascertained. Could be huge.
If some of the Insurers go down, the repercussion on the mortgage and bond markets could be a big disaster. There would be a major downgrade on a material portion of the mortgages and bonds overnight. Rates for new mortgages and bonds will likely be higher and the US economy will spiral downwards.
Fund managers holding huge portfolio of mortgages and bonds will suffer and pass their sufferings to the ultimate investors.
How la????? Looks like the Equity markets are going to be a tough nut to crack in 2008.

Bert,The Pessimist

Hello,
When will CI bottom? hmm.... tough question, but looking at the charts, the uptrend is no longer intact... outlook... quite bad.... there may be ups and downs in between that allows swing trade, but to go long, hmm... need to have a strong confirmation first... maybe i'm getting old and more kia si now... hehe... :P

anyway, like the beach, there will always be waves, but no matter what, uptide will still be uptide, low tide will still be low tide...

some swings are meant for you to get off and some are for you to get on... the main determination, will still be the major trend.... :)

Regards and good luck...

Let's look at previous downtrends. Started February 1997 and bottomed out only in September 1998.... a loong 20 (twenty) months!! Started February 2000 and bottomed out only in April 2001.... a long 15 months!

The current one started in January 2008. How long will it last?

http:// www.talkandshare.com /index.php/News-/- Reports/1605-KLCI- Monthly-Chart-Since- 10-Years-Ago.html