Sunday, March 11, 2007

Signs of hope

One has been doing some more homework today. Drawing up the annual chart for 2007 – the last one was done in 2004 – lazy me. There had been many repeats over the years therefore one could also make some money relying on the older yet still accurate charts. Since 2007 is expected to be a super bull year, and if one wants to be a flying dragon in the heavens, it could be time well spent. Now one can plan for overseas trips months in advance by referring to this time chart which depicts (to me) when the KLSE will rise and when shares prices will plunge in 2007. (Like the unfolding of the 2006 events, one will keep the annual chart for my own consumption.)

Similar to the Bull Run in 1993, the volatility of price movements are compressed over a short time period – therefore the run up and rebounds of shares prices will be faster, and plunges heavier. There will be plenty of opportunities for traders and investors. No more a long gestation period (say three to five years) for your shares investment to move up. Just do not lose your shirt or your temper.

In the past, one had mentioned to friends and kin, that probably only those who cannot physically speak (dumb) would not make money in a bull run since they cannot call or instruct their stockbrokers to buy or sell. (Joke) But it no longer holds true with the advent of the internet and stockbrokers’ savvy – almost anyone can transact shares through the internet linked up with the stock broking houses. Therefore it feels good to know that everyone has an equal chance to make money from the KLSE in 2007.

If some Malaysian readers think that the taxi drivers, housewives, the massage parlor or nightclub girls do not know how to make money in a bull run, think again. They can be more savvy and street smart than the current crop of investors and punters. They know how to cut and run – for survival purposes – and buy if shares prices are low for quick rebounds and profits. They used to form the backbone of retailers back in 1993. And they are slowly but surely returning to the stock market.

Once these retailers are in, the big foreign funds will also come to trade in the KLSE. The huge US and European funds have been patiently waiting for this to happen. The Taiwanese funds which liked to invest in the second board counters have yet to make their move. One wonders when the new Chinese funds will come in. The Japanese funds have been rather quiet. Morgan Stanley and Merrill Lynch have hardly mentioned anything about the KLSE.

However with the recent big pull back of shares prices (30% to 50% off their recent year highs) and the KLCI (retracing about 15 %) before the rebound in the latter half of last week, there is real hope that there will be more buying next week from new or ‘diehard’ retailers and foreign fund managers.

One had bought back a selection of stocks – those that the Yi indicated had more potential than prices reached before the recent global markets plunge. The unfolding of ‘The wall falls back to the moat’ phenomenon has already occurred when one bought those shares back last week.

In a short compressed time, their prices had doubled from the price at the time of my Yi consultations. The plunge just as quickly brought the ‘castles in the air’ back to earth or to the moat, falling 50 % reaching the same price or lower as those recorded in my Yi consultations log book.

With this elaboration, perhaps readers will understand more about this warning line: ‘The wall falls back to the moat’ in their Yi studies or if they obtain the line in future divinations.

Together with various other signs – some from nature – it looks like the rebound started middle of last week will spill over to this coming week. If the expected rebound comes with higher liquidity or bigger volumes, selective stocks’ prices may yet fly again.

Good Luck!

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