I have written in length, in my previous subject on why I believe trading will be prevaient against investment, eps will be prevalent against just quarter results and a bullish move in export stock vs political concern. 

Lets face it, the political situation thus far has brought about concern on the future of the country. This has led to many foreign investor pulling out at many point during the turbulent back and forth crisis while the ringgit fluctuate to its worst against the greenback and trying to recover. 

Now put yourself as a foreign investor looking in. Situation.....ringgit falling, investors jittery while the direction of the country is uncertain. More to that, with the uncertainty, we are sitting duck to terrorism, while many of our leadership still spewing venom at each other and not putting their finger on the pain point of the country has led to further downward spiral.

At this point, we are all at our wits end asking 

1. What will change in Malaysia? The local political concern has been abound for the last 1 year and the end seem very distant every time we thought the ending was near....here your guess is as good as mine.

2. What will change in US? The US market showing signs of revival with improvement in the job market statistic overall during Obama's 2 terms however his business prowness maybe lacking with just TPPA to show and yet to be completed. This really doesn't matter. In fact, his failure in foreign policy and trying to resolve matters through solely diplomacy. His only showing of fighting terrorism was taking out Osama bin Laden which was already an ongoing intelligence since Bush administration and he took credit for it.

Chart 1

I took a 1 year DJIA chart trend to gauge. On a single year to date the chart does not reflect the growth. In fact it did a double bottom.

Chart 2

Compare the 1 year to date in Chart 1 vs the 5 years of DJIA trend in Chart 2. See the growth in DJIA?  At this point, I would have liked to see a higher support for the second bottom however it really makes no difference though the second support if its higher may mean that the market is ready for the next round of uptrend instead of double bottom. Refer to Chart 3 below where the ridge was deep in one of the years taken over the 10 yrs trend but did not do a double bottom and the recovery was swift.

Chart 3

As most of us understand the frustration and wanting change in the current Malaysian politics, the US is no different. The exception in US is the max 2 terms for the sitting President and the citizen gets to make their choice. Cutting the chase, the point here being frustration in US will bring about wanting a different President for the occasion. The occasion here being, wanting a President to address terrorism in the most sterned way living up and above the "no negotiation with terrorist" principle. Secondly, the over repeated tagline used in the Presidential race....."Making America great again" would require nothing less than a shrewd leader with personality to match.

while I am not supporting any candidate in US Presidential run up, we MUST be realistic in putting our bets here in Malaysia due to the fact that our ringgit is riding against the USD in performance, terrorism affect business globally and even more so locally if we are attacked and crude oil and alternative energy are mostly spearheaded by US vs OPEC vs Russia

3. What will change in China?  This is my last point because I am not touching Europe as of now since they have contributed too much in the last round with Greece, Spain ........ I mentioned in one of my article (something which I feel very very important)  i.e. "market always want to recover". This may be in opposition to what many believe that we live in a negative market.  By that, what many are saying is that there are more downs than ups in the market hence contributing to the term negative here and bearish.

Here China will represent the Asian market. My personal outlook of China is that they are testing the global market while experimenting on leverage for their own. They own large assets all over the world, their curency reserve in US is in Trillion, while they continue to lead Asia where manufacturing is concern through Asian industrial and raw material usage while their import of finish product is also increasing. 

I believe China have not grasp the actual barometer in their tweaking as yet and any changes as they know now, have sizeable impact not only globally but in China itself as seen by the 2 successive market avalanche after devalueing their currency. Since then they have remove the activation of the circuit breaker base on 7% change. This means that the circuit breaker will not kick in and the market in China will not be halted if it plunges 7% or more. 

Based on the 3 scenarios above at this point, we can be sure that the US market in order to climb further needs to control the global market better and whilst TPPA may ensure a more predictable playing field, it remain that they need dynamism to control China who is pushing the boundaries at every opportunity. Given that my statement "market wants to recover at every opportunity" we need dynamism that can counter the changing landscape and US knows that it cannot continue to be held at ransom in the oil trade, global market space and to terrorism in order to be great again. The dynamism here equate to the Presidential candidate this time around who will be President because he needs to be a shrewd leader, business minded and able to turn the table against the changes in the market on the go.

The US Presidential Election will be on 8 Nov this year. From now till then, the polling result of the running candidates' standing will change and more terrorism attacks will continue, more market fundamentals will be challenged which will drive the US citizens to want the change in their leadership to someone more extreme and less diplomatic in his handling of situation and addressing their economy.

The harmonics of the changes in US will strengthen their currency towards their Nov 8 date and China's pressure on the global market will act as a pressure valve in dictating the winning candidates with the strongest resolution to the their economy woes. Further to that, rise in terrorism will demand a stronger leader. This winning candidate will bring optimism to the global market and that will include KLSE. The chances of China being managed better will also be higher if dynamism can be brought into the equation by the new President. 

All that is left now is Malaysia ourselves and our political woes.  As i mentioned, nobody knows when our situation will improve, change  or shed some light, but what I am certain with is that IF a change does happen here and perceive as a middle ground or compromise, our market will have the biggest bullrun.

So YES, I still do believe between now till year end the KLSE market will have a good chance of a BULLRUN, and in shorter term till the coming financial results (majority end of this month) will have a uptrend following the prolong and mostly unnecessary correction/consolidation

Pls note: This is purely a logical view with best determination base on my experience and should not be use as buy signal if you are not monitoring proactively