Market Outlook as at February 24, 2009

The KLCI has been hovering around the 890-900 level for the past few days. Compare to the bashing in Wall Street, our KLCI looks like a safe haven. But, don't be deceived. We are at a tipping point, where a further loss of 10 points could change the market psychology from cautiously bearish to outright bearish. If you need a recent example, just look at the KLCI in May 2008.


Chart 1: KLCI's daily chart from Feb 23, 2009 (source: Tradesignum.com)

If the mounting problems in the US financial system were not taxing enough, a new problem has now cropped up. Eastern European countries, weighed down by foreign currency loans, are now imploding and this could drag down Western Europe (go here). With each passing day, the global economy & financial system are getting weaker & weaker. Can we step away from the abyss? Only time will tell...


Chart 2: DJIA's daily chart as at Feb 23, 2009 (source: Stockcharts.com)


Chart 3: S&P500's daily chart as at Feb 23, 2009 (source: Stockcharts.com)