To gauge whether this is a bear market rally,let’s recollect some of the comment given by the pros:
“It’s a bear-market rally because we have not yet turned the economy around,”. “This isn’t a financial crisis like all the other financial crises that we have experienced in our lifetime.”
” Yeah, it would be too soon. We are not reaching the end. At some point, we’re going to reach the end and I don’t know when that will be, but I know whatever the day is, May 4, in terms of the figures we’re getting out of all our businesses. The American economy is very slow and at the moment and, still getting slower. But that will turn and I can’t predict when. I hope it’s very soon. “
Wilbur Ross, Chairman and CEO, WL Ross & Co, said
“the US government’s stimulus programmes have prevented the economy from going off the cliff. But was quick to add that the revival in the US economy will take time.He feels a V-shape recovery in the near-term is unlikely. “
Tan Teng Boo
“We are in the early stage of a bull market.”
“the economic outlook for the Asia and the Pacific region will take longer than other parts of the world to recover from the global slow-down”
Volume in KLCI has been surging but the index is directionless now. That’s why the index gain so little with such a huge volume.I think small investors are jumping into the market and big government funds are selling their shares now.
This situation may continue for quite a long time because the funds which are holding huge volume of shares can only sell a billion shares per day.
The big funds can’t sell them at once because the volume can’t be taken by small investors in a day. They need to do it slowly to avoid massive selling in the market which may spook small investors. If small investors turn their heads away,big funds will be unable to unload their shares.
I believe the funds still need a few weeks to unload their shares to retail investors.When all the shares have been unloaded into the market, the KLCI index will start to drop slowly but daily. This happens because small investors who are mainly speculators/traders/pigs , will wait for huge rally so they can sell their shares at a profit. But what if the huge rally does not come (the number of sellers > the number of buyers)?
Small investors will unload their shares to cut loss/margin call. Other small investors will panic and when all of them sells,massive selling will be induced.
This is how the big funds architect the ups and downs of the market. Small investors have to go back to work,save some money and come back to play again when the market is UP again.
It’s an ongoing cycle which keep most of us working for the rest of our life.You can’t really go against big funds which have a team of professionals plus big capital.
These big funds don’t have to compete against each other because the number of PIGS to be slaughtered are enough to fill their hunger.They just have to coopoerate with each others to push up the market.It’s not an open/efficient market here in Malaysia when the whole market is monopolize by government controlled vehicles.
Do you think you can beat them in the game of investing?Well,think again.