A VERY major correction happening in Dow Jones.

[jianwei85]

I suggest investors to stay off share markets for a while..the correction in Dow Jones is gonna be a major one..Will definitely affect regional markets including our KLCI..currently, in the US, it's becoming a seller's market..even their day trader's are advising to sell.

What's happening:
US government with their debts piling up resorted to "creation of more money". They had Japan and China to 'finance' a substantial amount of their debt. As Japan and China took over the the debts (in USD) their foreign reserves of USD oso increases.
Its like u have debts, and u ask your Japanese uncle to pay u the money in Japanese Yen while u owe them USD. Your uncle needs to convert to USD so more USD floats in the market now. With more USD in the market it will affect the value of the USD.

Example, when Japan invaded Malaya. Remember the story of the Duit Pisang? it was the Japanese currency at that time. They printed so much of it until the currency's value became 'just a piece of paper'. So the correction is to ensure that the USD do no become 'just a piece of paper' but no one can be sure of how much the USD is really worth now, with so many uncertainty in their own markets and also the influence of their Federal Interest Rates and inflation.

Besides, their housing bubble is now burst and many of those who took loans are unable to cover their loan payments and are defaulting. The banks are also getting less from the auctions as the value of houses are dropping. It is like u lend Ali rm6000 to buy a kancil as Ali is able to sell back the Kancil at rm8000 at the moment. Ali did use up all the rm6000 to buy the kancil. However , government announced that AFTA will make cars cheaper. Kancil drop value to RM 3000. And Ali can pay back. So he gave the car back to u. Ur stuck wif losses of RM3000 even after u sell the car.


To speculators who hold USD. Do ask for further suggestions and do more research with those consultants. If not a 'burning' session gonna visit ur USD on hand.

To investors who wanna invest in shares now. Do have a selective appproach and do thorough research of the US dow impact on ur selected shares. Get a portfolio which could cover the risk of impact from US dow jones index. And of coz...timing is important. Need to look for clues of a rebound.

Currently: Real estate industry in US--Downturn (bubble burst)
Automotive industry in US--GM and FORD--Down (GM filing for bankruptcy protection)
Financial Institutions--60/40 chance of crisis (defaulters are rising, the assets that they hold are being revalued way lower.)
Inflation ---High
Fed. Interest Rates -- High

Good side: USD cheaper.Maybe a change to Euro/Gold standard (but is highly improbable as Japan and China holds LARGE amounts of USD.)

Bad side: Worldwide 'unforeseen' consequences.

[jianwei85]

This screencap can be used as a guide to avoid markets for the moment.

[jianwei85]

Market at 4:05pm.

[jianwei85]

Just to see what's happening today (on Monday). By tomorrow (Tuesday) after Dow Jones is trading more trends/clues on the economic performance of share indices around the world including our beloved KLCI will be deduced from Dow's performance.

Buyers are being cautious as they are anticipating major changes in the world market. And sellers are selling their stocks earlier as they do not want to be 'burned'. Let's see what US Dow Jones has got in store for the world tomorrow. Tuesday or Wednesday would be the D-day (Deciding factor-day la) for KLCI and regional markets.

[IanQ]

One can't really time the market... so, instead of doing the impossible, why not play it safe and invest using dollar cost averaging style. Especially if one believes in the equity market (also applies to other other kind of markets).

However, last week and today have been fun looking at the market volatility

[jianwei85]

Ya..especially this week..A very very crucial week..i was looking at today's charts..it's like playing a water slide...hehe..EVERY MARKET now is volatile..all because of US domestic and foreign policies..it seems oil and gold price (commodities) should be lowering a little more in the next few days..but again..as the weak USD is still so weak..got more show to see le..just dunwan ppl 2 barge in buying now and thinking that prices are at their lowest..hopefully got ppl interested in reading what i post though and hope it was not too amateurish..hehe

The show has just begun (for this week only la..) hehe

More info on Dollar Averaging Cost (DCA)
http://beginnersinvest.about.com/cs/.../a/041901a.htm

There are arguments which says that DCA will afffect Lump Sum investments.
http://www.moneychimp.com/features/dollar_cost.htm

[totoro]

well if you like conspiracy theories, you can have a read here:
http://www.321gold.com/editorials/si...sch052306.html
(What's Behind the Global Stock Market Melt-down?)

[jianwei85]

2day cool le! yesterday our kl market dropped 18.89 points but today increased by 1.05 points..at least it's holding steady...for now..haha

[jianwei85]

2day get back 1.19 pts..2moro outlook not so good..think it will fall le..domestic annnouncements comin up...

[jianwei85]

Wow..after dropping back 3.8 points yesterday..kl market having slight rebound...lol..at 12.38pm gaining 8.10 points..as expected..commodities are rising again..bolstered by Dows performance..FINAL PUSH!!

[jianwei85]

Oops..at the end..the klci close at 6.78 points higher from yesterday..hmm..no comment liao...