The Da Vinci Code : Application To Stocks, Futures & Currency Market

WHAT'S THE CONNECTION BETWEEN THE STOCK, FUTURES & CURRENCY MARKET, WITH THE DA VINCI CODE?

This book attempts to show the application of the Da Vinci Code to financial markets by relating some interesting questions to the contents of Dan Brown's famous book, namely :

1. What has a stock, futures or currency's market's movement in common with the way Sauniere's body was found inside the Louvre - naked and posed like Leornardo Da Vinci's famous drawing, the Vitruvian Man, with a cryptic message written beside his body and a Pentagram drawn on his stomach in his own blood?

2. What has a stock, futures or currency market's movement in common with Leonardo's famous works, including the Mona Lisa and The Last Supper which Sauniere had an obsession with?

3. What has a stock, futures or currency's market's movement in common with the following cryptic numeric and two anagrams scribbled onto the parquet floor with a black-light pen by the dying-curator?

13-3-2-21-1-1-8-5

O, Draconian Devil!

Oh, lame saint!

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Kuala Lumpur Crude Palm Oil Futures : Forecast for the day, 29th June 2007 !

Kuala Lumpur Crude palm oil futures: Stopped out/S.A.

SEPT CPO futures closed higher by RM49 at 2383 on relatively high volume of 6,956 lots.


1. We were stopped out of CPO yesterday at 2364.

2. Yesterday we had called to go long if 2364 is touched.

3. We are going long because the stochastic is on buy signal from near an oversold area.

4. Also, price has move up above the lower Bollinger band.

5. But strictly speaking, we should not go long as this market is prone to U-turn back down.

6. As such a conservative trader (and we) would rather stay aside instead of going long today.
If you are aggressive then you can turn long, but place sell-stop below day before
yesterday’s low, i.e. @ 2314 OL.

7. The next up target is 2560 and the next down target is 2153.

General commentary: We were whipped by the rebounding market yesterday and stopped out at 2364. It was a tricky market alright, hence our suggestion to stay out today.

Next upside targets: 2560/2749 (hit)/3313 (targets revised on June 5)

Downside support: 2153

Ichimoku chart: (Based on kumo (clouds), CPO is long. Kumo support is at 2111. Ichimoku chart will turn short @ 2110 OL (updated on June 11, 2007)

Average True Range for CPO: A.T.R. is 85.36 for CPO. This implies you need to put a stop above/below this A.T.R. or you can get stopped out due to the volatility factor. We advocate a 1.5 x or 2 x the ATR. We are using a 5 days ATR.


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Kuala Lumpur Stock Index Futures Outlook : Forecast for 29th June 2007 !

Kuala Lumpur Stock index futures: Stop out/SA

June futures closed lower by 6.0 point at 1347.5 on relatively low volume of 8,992 lots.

1. We continue to stay out as price closed within the Bollinger bands.

2. But if FKLI can close below 1348 today we would turn short.

3. Otherwise, any close above 1348 could be a “buy”.

4. We know that July is already below 1348. July closed at 1339.

5. But it is possible for July to rise to cover the down-gap and close above 1348 today.

6. If you are a contrarian, you would be buying July at the open and place sell-stop at 1334 OL but do not short yet.

General commentary: The Dow rebounded by 90 points and the ringgit was up by 160 pips but FKLI did not rebound in tandem. What a disappointment. Let us see if we are just as anemic today. If FKLI closes below 1344.0 OL (June contract), then cut loss on longs. If you are trading July contract, the stop loss would be 1334.5 OL.

Upside Fibonacci target 1466(Revised on June 15)

Downside targets: 1294/1257/1212

Ichimoku chart: (Based on Kumo (clouds) FKLI is still long. Kumo support is at 1206. Ichimoku chart will turn short at 1205 OL) (Updated on June 11, 2007).


Average True Range for KLFE: A.T.R. is 15.61 points for FKLI futures. This implies you need to put a stop above/below this A.T.R. or you can get stopped out due to the volatility factor. We advocate a 1.5 x or 2 x the ATR. We are using a 5 days ATR.


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Kuala Lumpur Stock Market Outlook : Forecast for the day, 29th June 2007 !

KUALA LUMPUR STOCK MARKET OUTLOOK: Forecast for Friday, June 29, 2007: KLCI can fall further if 1348 breaks down but any rebound can ‘save’ the market from a downtrend. Watch!

Technically speaking:

1. As at Thursday’s close at 1350.72 the KLCI was lower by 6.71 points or 0.49%. Losers led gainers 511 to 393. Trading volume was 1.0 bln shares.

2. The local bourse was under selling pressure alright with stocks like BAT, IJM, KLK, IOICORP, BURSA, ASTRO, HLFG, SIME and COMMERZ weighing down on the KLCI.

3. Stocks are weak, and many of our stocks have triggered sell signals, like MRCB, EMICO, ENCORP, AIRASIA, ATIS, FABER, KUB, PBBANK-CA.

4. They are sold out as they have hit our sell-stop levels.

5. Right now, with the KLCI at the brink of falling below the lower Bollinger band, we would rather be safe and reduce positions by selling out those that have hit our stops.

6. But if the KLCI does not fall below 1348, the lower Bollinger band, but instead stage a rebound today, we may have to r-enter some stocks that we have sold out.

7. But as of yesterday’s close, we would classify this market of ours as weak.

8. Today we would wait-and-see, and stay out of the market.

9. There is no stock to watch.

10. The ringgit strengthened back from 3.4810 to 3.4650 for a gain of 160 pips. This could be a hint of a stock market rebound today.

CONCLUSION: The Dow rebounded 90.07 points, yet we lost 6.71 points or 0.49%. What is going on? It would seem that nothing works for the Malaysian market, regardless of how the Dow performed. What a disappointment. We hope to see a rebound today as any fall below 1348, the lower Bollinger band support may result in lower lows. Note that the RSI, stochastic and MACD indicators are already on sell signal.

Long-term Upside Targets:1492 (Target amended on 15/6/07).

Immediate downside targets: 1319/1291/1222

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Kuala Lumpur : Crude Palm Oil Futures

Kuala Lumpur crude palm oil futures: Maintain long/Sell-stop @ 2424 OL/F.B. @ 2501/T.P. @ 2560
SEPT CPO futures closed higher by RM32 at 2457 on relatively high volume of 11,525 lots.

1. We were again correct in calling for a buy and a “gap” to make up for the change of contract
month.

2. We are maintaining long but place sell-stop at 2424 OL to exit longs. If you want a tighter
stop, then use yesterday’s low, i.e. @ 2444 OL to exit longs.

3. If CPO breaches 2500, then “further buy” @ 2501 OH.

4. Next target is still at 2560.

General commentary: We were right about our “F. Tam white inside out up” pattern, which resulted in a higher close, up by RM32. Today CPO may consolidate or may rally to test 2560. We doubt it will stage a sharp pullback. But in case it does, our sell-stops are either at 2444 OL or 2424 OL.

Next upside targets: 2560/2749 (hit)/3313 (targets revised on June 5)

Downside support: 2466(hit)/2393(hit)/2307/2223/2153

Ichimoku chart: (Based on kumo (clouds), CPO is long. Kumo support is at 2111. Ichimoku chart will turn short @ 2110 OL (updated on June 11, 2007)

Average True Range for CPO: A.T.R. is 112.36 for CPO. This implies you need to put a stop above/below this A.T.R. or you can get stopped out due to the volatility factor. We advocate a 1.5 x or 2 x the ATR. We are using a 5 days ATR.

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Kuala Lumpur Stock Index futures

Kuala Lumpur Stock index futures: Turn long/Sell stop at 1368.0 OL
June futures closed higher by 26.5 point at 1384.00 on relatively high volume of 6,960 lots.

1. FKLI leapt by another 26.5 points to close outside the upper Bollinger band, at 1384.

2. This is a strong buy signal. We have turned long at 1362.0 and we are maintaining longs.

3. Place sell-stop at 1368.0 OL.

4. We expect a strong rally today to “flush” out heavy shorts.

5. We should continue to see sharp rallies for now, until FKLI hits at least 1466.

6. Thereafter we will look for a toppish Japanese candlestick pattern to exit and maybe
even short.

7. For now, expect the “shorts” to be slaughtered!

8. Upside Wave 5 target is 1466. After that we look for a toppish Japanese candlestick
pattern before shorting.

General commentary: Finally, we have an upside breakout of a consolidation, exactly as we had anticipated. This consolidation started at least from April 5 and is therefore a 2½-month consolidation. As such, now that it is seen breaking out – you can expect a powerful rally. Shorts beware! Expect FKLI to hit 1466.

Upside Fibonacci target 1466(Revised on June 15)
Downside targets: 1294/1257/1212

Ichimoku chart: (Based on Kumo (clouds) FKLI is still long. Kumo support is at 1206. Ichimoku chart will turn short at 1205 OL) (Updated on June 11, 2007).

Average True Range for KLFE: A.T.R. is 19.54 points for FKLI futures. This implies you need to put a stop above/below this A.T.R. or you can get stopped out due to the volatility factor. We advocate a 1.5 x or 2 x the ATR. We are using a 5 days ATR.

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KL Stock Market : Forecast for the day!

KUALA LUMPUR STOCK MARKET OUTLOOK: Forecast for Tuesday, June 19, 2007: KLCI expected to breakout, but only select stocks are in demand. Pick your stocks wisely. SLB/Hold.

Technically speaking:

1. As at Monday’s close at 1372.28 the KLCI was higher by 11.63 points or 0.31% but on slightly
higher volume of 1.36 bln shares. Gainers led losers 499 to 403.

2. Yes, we are just a whisker away from the all time high close, which was registered on June 6,
when it closed at 1372.38.

3. After witnessing this “breakout” of the Bollinger bands for a close above its upper band, you
can expect a “gap” up opening if the Dow closes in positive territory last night.

4. Note that the Dow is also a hair’s breath from its all time high. The Dow closed up 85 points, at
13639.50 on Friday while its all time high is 13692.00 clocked on June 1.

5. It doesn’t take a genius to figure out that if the Dow closes at a new record high on Monday,
you can expect our KLCI to “gap” up.

6. But, we are very disappointed with the performance of individual stocks even as the KLCI is
about to make another new record high close. There just isn’t much oomph at all on many of
our stocks as they remain lackluster and lacking in follow-through buying.

7. It is only a few situational stocks from the strong sub-sectors like property, oil and gas,
construction stocks that spice up what would otherwise be a very dull market.

8. Our stocks lack buyers. Where have all of them gone? Take a look at Singapore, Hong Kong,
Korea, Australia, China, Indonesia, Philippines and even Thailand where its index still sparkle
despite the political uncertainty caused by the military junta. It’s a crying shame for
Malaysian stocks not to be played up. Instead, at best we are only playing ketchup (catch-
up).

9. It is frustrating, as it would take a sharp-shooter to be able to buy the right stocks to see
some monetary gains. Again, what a shame!

10. Still, we are sharp enough to “zero in” to a few prospective ones like SAPCRES-WA, FAVCO,
BRDB, SAPTECH, EDEN, MUHIBAH, MUDAJAYA, BURSA, COASTAL, etc.

11. RANHILL was suspended after it was reported that it struck oil! It closed up 37 sen to close
at 2.18, off the high of 2.35. Based on Elliot wave, the targets are 2.65 and 3.70.

12. We think BURSA is potentially breaking out and the cheaper buy would be BURSA-CC,
which is at-the-money. It is good for 30 sen, at least, if Bursa hits 12.90.

13. New stocks-to-watch are KPS, BURSA-CC, SPSETIA.

14. PJDEV and PJDEV-WB also looks good.

15. The ringgit rose strongly by 350 pips from 3.4550 to 3.4200, and this should translate into
a stronger market for our stocks.

CONCLUSION: We expect a bullish breakout for the KLCI. Not all stocks would rally, as such if you want to capitalize on the KLCI rally, switch to stock index futures. If we are right about the Dow making new highs to 14400, our KLCI could test 1492 and FKLI to test 1466. This will be another good round for trend followers. Finally, our KLCI should be trending up for now!
Long-term Upside Targets:1492 (Target amended on 15/6/07).
Immediate downside targets: 1334/1291/1222

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Profitability of Technical Analysis

DOES TECHNICAL ANALYSIS WORK?

Investors often ask these questions: Does technical analysis work? Is it of any value to the investor as an investment tool to forecast market trends? Are the financial markets a random walk?

This book reveals that the stock market is not a random walk.

Of 13 technical trading systems tested on Malaysian stocks, 6 systems consistently beat the market. Which systems are the best?

THIS BOOK WILL REVEAL THE 6 BEST TRADING SYSTEMS!

The results also show that technical analysis tools as represented by the technical trading systems do in fact work.

Amongst other findings, the Channel Breakout (C.B.O.) 20-20 trading system has been found to be the most robust and profitable tool for the trading of Malaysian stocks.

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