In the past 2 days the tell-tale volume (something I was watching out for) spiked on the KLCI. Since it was not accompanied by a spurt up or down, it looks like we have heavy disribution this week. Whether this leads to a move up or down is anybody’s guess. In the 3 times this has happened this year we have had 2 reversals and 1 consolidation. Not a good sign in my books.
It’s interesting to note that plantations fell off a cliff today, following oil. So even though palm oil is supposed to be a substitue fuel, it has reacted negatively to the price of falling oil. So in the short run, it is actually correlated to it. This is because palm oil prices have risen on crude oil fears and now that those fears are receding, palm oil prices have dropped as well. However, Industrials are up, offsetting plantations and holding the KLCI largely where it is. So the big question is, now that the energy story is over, whether we think that Industrials will keep on going, or whether some other sector like finance or construction will take over, and if so, which… I’ll be back as soon as I have figured that out!
