After I wrote the some of the earlier topics on my views of the market i have been consistently getting request on daily basis of market outlook. The view presented is purely reflective of the believe that Malaysia (during Mahathirs era esp in the 90s and in particular the AFC in 97/98) have put in many preventive measures to be resilient. If you like, you can think of the measures as airbags in modern cars today whereby the more airbags at the RIGHT places will prevent many fatality however getting the wrong type of airbag may cause more harm. 

Good or not good, most can view with consistency of the methodology applied to solve the problem. Right or wrong, I believe some of the problem was self created then (in the 90s) as it is now, though global contributed partly to it. In the 90s, it was mostly Asian affair with the leadership then taking the opportunity to dabble in the currency (FOREX) however was met with a counter dabbler in Soros. Without going to much into detail, it is suffice to say that both Mahahtir and Soros being opportunist of the Asian calamity bet against different currency as hedge. We know the outcome and since then many prescription has been put in by the Doctor of the day to resolve and make better resilient of the situation. So we thought!

Moving ahead into the millineum, many things have change. For one, information is made widely available and market is now proactive. It is proactive because systems will trigger alert and alert will demand action. This is normally applied by the modern day dabbler (ie fund managers or syndicates). It is important to note that the fund managers and syndicate may be on different side of the court for a desired stock. So when the system trigger for a sell to the fund managers, the syndicate will wait for it to bottom out using the method of RSI and Volume to buy which I have shared in earlier topic. Though simple enough, low buy rate at high volume is a no buy in yet. So have a look at your current desired stock and see at various hours when the stock price and buying settles down to see if the time is right to buy again or sell. 

Part 2

 I have written a topic on how to read the body language of the market in a precise way. Having said that and monitoring the current situation

1. I have mentioned that "Market always want to recover" this recovery happens at every opportunity . We have seen the KLCI, swinging up and down in the recent volatility. This to me shows confusion. Market indicators and our political farce are confusing many investors especially in Malaysia and foreign investors coming in.  In actual fact, this has been happening for the last 4 yrs, starting with the freezing of withdrawals from EPF for any other investment (eg unit trust) to the recent pass year annoumcemet of  EPF withdrawal at age of 60(hence encouraging working until 60). The earlier was to support the pull out of foreign investors and latter something else. The message here is the govt tried to moderate the pull out of foreign as early as 3-4 years ago. Another initiative was the SRR announced last month by Bank Negara for the same reason and to create liquidity into the market.

2. Malaysia being an economy dependent on revenue contributed by our natural resources will now come to realise this dependency and not take it for granted. Just taking only 2 main contributors to illustrate my point. During GOOD times, our avg revenue from Oil was RM110-120Billion with another RM80B coming from CPO. A whooping RM200B annually. Even if you give RM1Mil to each of the revenue to the 30M citizen, the damage would have been RM30B.  Now with the crude priced below USD30/barrel vs the high of 110/barrel would mean decline of 75% revenue ie current you can approximate at RM30B in revenue. Even with GST to support at RM50B it will not surpass the RM100B we previously enjoyed.

3. Of late we have heard on mainstream media that the Govt also sold landbanks especially to China followed by the Chinese offering the local Chinese citizen ship or something to that effect. Essentially what they are looking for is human capital. Right or wrong ethically here is not the matter but more to that it is building a hyper conglomerate to sustain global endeavour. ITS BUSINESS FOR THEM!

4. US as I have said earlier WILL be looking for a strong President this time around. Not a diplomatic President or a President looking to improve foreign relation or negotiating for sanctions or finding middle ground....They are NOW looking for a President who will take and win the financial market, stop terrorism in the harshes manner, command respect of allies and business partners and ......

5. TPPA ...... which is to create a level playing field as much as they can. This is the closes US will get in moderating their own currency globally. In my opinion, this is no different from trying to create a single currency like in Europe ie Euro currency back in the 90s except that ensuring USD in this case (thru TPPA).  In currency, how relevant a currency, it depends on how tradable and volume of transaction. In the 80s and 90s everyone wanted to be the hub in this region for the same reason except that towards the millineum, the term "decentralise" came into the equation. We no longger depended on a single hub even in Malaysia now that states like Penang, Selangor, and Johor are moving up the echoleon of revenue contribution. So TPPA is just another attempt at it in the global perspective

So what is the likely outcome base on the scenarios above?

Though it may sound complicated with so many variable, the market always simplifies for us. In fact it is us who complicate the market? 

The market on the other hand will time it. As mention the "market wants to recover" while TPPA though signed, is 2 years ahead before enforcement, this is due to the laws that need to be ammended prior. Hence the market will treat it as positive for the time being because any effect is not known yet as the laws are also not ammended or tabled yet.  1 and 2 has been addressed by the govt though we know it is NOT sustaining. The money from landbank sales will soon require another top up while the SRR will also dry up and GST is to help support the declining revenue from our natural resources.  When that happens and no new announcement, the ringgit wont sustain. The only other way is to increase GST??

As for Global, TPPA is seen very postive for US temporarily but the new elected President will provide the dynamism to the final equation.