Technical Analysis - October 6 2008

S&P500 (1,099, last week 1,213 or -9.4% w.o.w )

Another very bad week for the market. The bottom created a fortnight ago was replaced by this week’s 1,098. All the daily indicators are negative. The index is extremely bearish and it may take a while before any positive uptrend can be seen. Any technical rebound may be taken as a sell opportunity. The index may find support at 1,060 and 1,000 and while resistance is at 1,138.

KLSE CI (1,017, last week 1,021 or -0.39% w.ow)

The index was almost unchanged last week due to only 3 working days in conjunction with Hari Raya Aidilfitri. Just like last week, although most of the daily indicators remained to be weak, the MACD and its Histogram is still in a slight positive crossover. As noted in previous weeks, the index needs to work overdrive to turn the daily indicators to a positive position to avoid any broken uptrend. The general overseas markets sentiment may not help in this cause. The weekly charts continued to be weak. The index is expected to trade between 1,000 and 1,070.

HangSeng (17,682, last week 18,682 or -5.4% w.o.w )

Last week saw the gap of 18,600 to 17,800 being filled up. The Daily MACD which had a weak positive crossover last week succumbed to selling pressure and is now slightly negative. Although the daily parabolic SAR is still supporting the market, the index is likely to continue to be weak this week. The weekly charts are still in a negative territory. Support is seen at 16,700 and 16,284(recent low) and resistance is at 18,700.

Nikkei 225 (10,938, last week 11,893 or –8.0% w.ow)

The index worsened during the week and the hope of index giving in much work in order to have any positive readings in its daily indicators did not materialised. Infact, the index closed at its current low of 10,938 beating its earlier low a fortnight ago at 11,301. The weekly charts are still weak. Any technical rebound is an opportunity to sell. The support is seen at 10,500 and 9,500 and resistance is at 12,200.

* Now Europe is in the news feeling the tremors from the US's financial turmoil. The next big news will be from Asia........ Japan/S.Korea/HK/Singapore/China? European leaders have agreed to work together to limit the economic fallout, ease accounting rules and seek tougher financial regulations. Some current European fallout news: 1) Hypo Real Estate-Germany's 2nd biggest property lender, gets USD68b bailout from the government and lenders. & 2) Further to a rescue effort by the government, BNP Paribas of France will now buy 75% of Fortis Belgium for USD11.3b.

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* CNN: Stanford Financial expects that more than 100 banks nationwide to fail next year.

* Bank not safe anymore? Confidence crisis. If you have more than USD250,000 in the US, you may consider hiding the excess in your mattress rather than in your bank account? (For comparison purposes, Malaysia's insured limit is a mere USD17,600 or RM60,000 per institution!!!).

* CNN: The Federal Department Insurance Corp(FDIC) as at 30 June has 117 insured banks and savings and loans on its problem list. This represent about 1% of the nearly 8,500 institutions insured as at that date. The last savings and loans meltdown in 1991 affected about 10% of the industry.

* Australian PM says financial crisis is a Gordon Gekko mess " Greed is Good"

* BII went up 33.9% today on the resumption of trading. Somebody is laughing all the way to the bank...and he is not you or me..........