Market Sentiment

Market sentiment is certainly pessimistic at the moment. You don't need complicated technical indicators to tell you that. Top concerns for investors include the US recession and the Euro debt crisis.

It's almost 10am and our FBM KLCI is down about 1%.

As far as I'm concerned - I have two possible option with regards to my investment strategy, depending on prevailing market conditions:

1) Bear market - If we are heading towards/are in a full-blown bear market, then the strategy would be to sit on the sidelines and keep stock exposure to the absolute minimum.Wait for signs of potential stabilisation before purchasing blue chip stocks.

2) A correction to a secular bull market - If we are in a correction to a bull market, however unlikely that may be, I might take small long positions if the FBM KLCI makes a huge rebound off lows. Exposure will be very small - ideally 20-30% of total equity.

1425-ish level is a key support. Besides the low on made on the 9th of August, it is also the 78.6% Fibo. Will be very interested to know what goes on when we test this level again.

I don't predict anything. I wait for things to move before I jump in. That might reduce my potential profits. But in terms of probability of success, this strategy generates higher %.