KLCI
Source: Nextview
On KLCI, apart from Bollinger Bands, it is also on the verge of breaking its narrowing triangle. Although there were some last minute market down just now (I suspect it has something to do with what happened on Hang Seng. Indonesia too was very Bearish today as they lost 3.1%), it was still within the triangle. Bollinger Bands is very tight at this point and awaiting a MAJOR Breakout. From such tightening formation, I would not be surprise if KLCI reacted as much as 100 points in short space of time. In fact, such formation and tightening of Bollinger Bands almost always result in violent movement.
Bollinger Bands would tell whether there is a violent movement coming up, and technical formations are rather Bearish, so the intellectual guess would be down. Technically, it is preferable to wait until it is confirmed. But you know the drill; once it is confirmed it is very difficult to get out.
I know most of us are on holiday and I mentioned that if anything drastically negative were to happen it would be next year, but next year is less than 2 weeks away. Lets not get too obsessed on when it will happen. To me, once market has triggered the critical levels, we have to react. Remember that if market goes down this time around, chances are it would be changing market uptrend, meaning that we have to change the strategy from buy on weaknesses to sell on strength.
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