STOCK MARKET OUTLOOK: : KLCI to gap down on what could be the second leg of the down trend. Market crashing. Do not touch Kenmark.
On Friday’s close the KLCI was down by 0.05 points or 0.00% at 1294.39 on lower volume of 674 million shares traded. Advancers led decliners by 313 to 275 with 277 stocks unchanged.
1. Ok there were more advancers than decliners on Friday trading. But we observed that volume was low which suggest that buyers were not strong.
2. Most importantly price remained stagnant on a small range day. A ‘doji’ candle was formed, suggesting “uncertainty”.
3. As well the KLCI stopped at the 50% resistance level of 1297 without closing above it. It closed at 1294.39.
4. All this suggests that the local market especially the KLCI, has hit a major resistance of 50% at 1297.
5. A “bear flag” can be drawn from recent activity. A bear flag spells of potential weakness. Any break and close below 1281 is a confirmed sell signal for the KLCI and stocks in general.
6. KEURO may succumb to the overall weakness of the market, hence we are raising stop loss to 0.80 or lower to exit. It may not hit 0.98 sen.
7. Last week, a little known stock called KENMARK made headlines with its sudden and sharp price plunge from 0.83 on 25/5 to 0.035 sen by 1/6 accompanied by huge selling volume that even exceeded its share capital of 181.7 million shares!
8. Then at about the lowest level of around 0.04 sen, One Datuk Ishak Ismail and company came in to mop up at least 32% of the shares between June 1 and 2 at firesale prices of between 0.035 and 0.06 sen!
9. To those of you who have studied the Wyckoff Method, this is a text book case of the Composite Man using the news media, and insider conniving strategies to cause public panic triggering all and sunder (including brokerages and banks who were holding Kenmark shares as collateral) to “dump” Kenmark shares at or near to its lowest point from 0.035 – 0.06.
10. And at about the lowest point, guess who came in to mop up the shares? The Composite Man! This Composite Man must be investigated by the Securities Commission, Bursa Malaysia and they must bring those responsible for this classical manipulation move used by the likes of Jesse Livermore since the 1900s to book. This is a long forgotten classical technique taught by Richard D. Wyckoff and it is now taught in a technical analysis course offered by the Open University Malaysia-IPD.
11. The authorities should have suspended this counter when it went limit down to 0.33 on 27/5/10 although on small volume of 1.5m shares. It should be suspended because 27/5/10 was a very bullish day when most counters went up. The KLCI was up 21 points to 1269. Why is Kenmark plunging on a bullish day? But Kenmark was not suspended till 31/5/10 but by that time it closed at 0.105 and 71.9 million shares changed hands. Obviously involved banks and brokerages houses were cutting losses as they read the headline news of Kenmark closing shop. That is another of the Composite Man’s fingerprint!
12. The authorities’ suspension on 31/5 was late but nevertheless was a correct decision.
13. But why did they lift the suspension so soon I am baffled. They lifted the suspension on 1/6/10 and allowed Kenmark to resume trading. By doing that it allowed the Composite Man to mop up more shares at firesale prices. Remember the buy on panic strategy?14. By June 1, 191m shares changed hands and price closed at 0.06 sen. By 2/6 it closed at 0.115 with 138m shares changing hands and by 4/6, Kenmark gapped up 0.09 sen to close at 0.26 sen with 101m shares changing hands. This means that the Composite Man would have made a cool floating or realized profit of at least RM11 million!
15. In my opinion, the authorities should NOT have lifted Kenmark’s suspension of 31/5/10 pending further investigations. Richard D. Wyckoff’s Composite Man Theory was at work then and still is at work if only people knew it.
16. My view is that the authorities should re-suspend this counter from Monday June 7 and do not allow the Composite Man to further their campaign till further investigations have been conducted to confirm there is no foul play, which I doubt. (For chart of Kenmark and the sequence of events, please see Excel spreadsheet). Otherwise a lot of investors are going to get hurt. Sad to say it is the banks and brokerages who are the ones who were hurt the most by this Composite Man!
17. Other than my view on the authorities handling of Kenmark’s price decline, there are no stocks to watch this Monday.
18. Instead I expect stocks to decline especially with the 300+ drop on the Dow on Friday.
19. The Ichimoku charts of the CAC, DAX, FTSE UK, DJIA, S&P 500, Nasdaq, Hang Seng, Australia, Shanghai, Singapore, KLCI charts continue to remain below the clouds, even with the recent rebounds, suggesting the markets are already in bearish mode. There may be a temporary rebound in the near term but soon or late a downtrend should resume. Be ready to short index futures.
20. The ringgit strengthened to 3.2630 from 3.2950.
1. Ok there were more advancers than decliners on Friday trading. But we observed that volume was low which suggest that buyers were not strong.
2. Most importantly price remained stagnant on a small range day. A ‘doji’ candle was formed, suggesting “uncertainty”.
3. As well the KLCI stopped at the 50% resistance level of 1297 without closing above it. It closed at 1294.39.
4. All this suggests that the local market especially the KLCI, has hit a major resistance of 50% at 1297.
5. A “bear flag” can be drawn from recent activity. A bear flag spells of potential weakness. Any break and close below 1281 is a confirmed sell signal for the KLCI and stocks in general.
6. KEURO may succumb to the overall weakness of the market, hence we are raising stop loss to 0.80 or lower to exit. It may not hit 0.98 sen.
7. Last week, a little known stock called KENMARK made headlines with its sudden and sharp price plunge from 0.83 on 25/5 to 0.035 sen by 1/6 accompanied by huge selling volume that even exceeded its share capital of 181.7 million shares!
8. Then at about the lowest level of around 0.04 sen, One Datuk Ishak Ismail and company came in to mop up at least 32% of the shares between June 1 and 2 at firesale prices of between 0.035 and 0.06 sen!
9. To those of you who have studied the Wyckoff Method, this is a text book case of the Composite Man using the news media, and insider conniving strategies to cause public panic triggering all and sunder (including brokerages and banks who were holding Kenmark shares as collateral) to “dump” Kenmark shares at or near to its lowest point from 0.035 – 0.06.
10. And at about the lowest point, guess who came in to mop up the shares? The Composite Man! This Composite Man must be investigated by the Securities Commission, Bursa Malaysia and they must bring those responsible for this classical manipulation move used by the likes of Jesse Livermore since the 1900s to book. This is a long forgotten classical technique taught by Richard D. Wyckoff and it is now taught in a technical analysis course offered by the Open University Malaysia-IPD.
11. The authorities should have suspended this counter when it went limit down to 0.33 on 27/5/10 although on small volume of 1.5m shares. It should be suspended because 27/5/10 was a very bullish day when most counters went up. The KLCI was up 21 points to 1269. Why is Kenmark plunging on a bullish day? But Kenmark was not suspended till 31/5/10 but by that time it closed at 0.105 and 71.9 million shares changed hands. Obviously involved banks and brokerages houses were cutting losses as they read the headline news of Kenmark closing shop. That is another of the Composite Man’s fingerprint!
12. The authorities’ suspension on 31/5 was late but nevertheless was a correct decision.
13. But why did they lift the suspension so soon I am baffled. They lifted the suspension on 1/6/10 and allowed Kenmark to resume trading. By doing that it allowed the Composite Man to mop up more shares at firesale prices. Remember the buy on panic strategy?14. By June 1, 191m shares changed hands and price closed at 0.06 sen. By 2/6 it closed at 0.115 with 138m shares changing hands and by 4/6, Kenmark gapped up 0.09 sen to close at 0.26 sen with 101m shares changing hands. This means that the Composite Man would have made a cool floating or realized profit of at least RM11 million!
15. In my opinion, the authorities should NOT have lifted Kenmark’s suspension of 31/5/10 pending further investigations. Richard D. Wyckoff’s Composite Man Theory was at work then and still is at work if only people knew it.
16. My view is that the authorities should re-suspend this counter from Monday June 7 and do not allow the Composite Man to further their campaign till further investigations have been conducted to confirm there is no foul play, which I doubt. (For chart of Kenmark and the sequence of events, please see Excel spreadsheet). Otherwise a lot of investors are going to get hurt. Sad to say it is the banks and brokerages who are the ones who were hurt the most by this Composite Man!
17. Other than my view on the authorities handling of Kenmark’s price decline, there are no stocks to watch this Monday.
18. Instead I expect stocks to decline especially with the 300+ drop on the Dow on Friday.
19. The Ichimoku charts of the CAC, DAX, FTSE UK, DJIA, S&P 500, Nasdaq, Hang Seng, Australia, Shanghai, Singapore, KLCI charts continue to remain below the clouds, even with the recent rebounds, suggesting the markets are already in bearish mode. There may be a temporary rebound in the near term but soon or late a downtrend should resume. Be ready to short index futures.
20. The ringgit strengthened to 3.2630 from 3.2950.
CONCLUSION: The Dow, Hang Seng, Singapore and KLCI Ichimoku charts remain below the clouds suggesting that these markets are still in a bear phase. In spite of the rebound we saw yesterday, the indices are ALL below the clouds. My conclusion is, therefore, I am bearish and it is sell market since the 50%-62% rebound level was hit yesterday and short index futures.
Upside Targets: 1283(hit), 1297 (hit)/1308 (Revised targets on 3/06/10)
Immediate downside targets: 1224-00/1154/1033 (Revised on 20/05/10)
Ichimoku chart: Span A resistance: 1288/92 (Revised on 2/03/10)
Upside Targets: 1283(hit), 1297 (hit)/1308 (Revised targets on 3/06/10)
Immediate downside targets: 1224-00/1154/1033 (Revised on 20/05/10)
Ichimoku chart: Span A resistance: 1288/92 (Revised on 2/03/10)
KENMARK 15 MINUTE CHART: FROM 25/5/10 - 4/6/10
THE INVISIBLE HAND OF THE COMPOSITE MAN IN KENMARK!
THE INVISIBLE HAND OF THE COMPOSITE MAN IN KENMARK!
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