I first read about the Kuala Lumpur Composite Index (KLCI) crossing the magical 1,000 mark while having teh tarik on Nov 4. I did not realise it had happened although I had entered the market to buy some stocks, based purely on my reading of its state, which is "rosy for now".
As a chartist, I did make a forecast on Sept 6 this year on the "1,000 mark" in response to queries over Global Malaysian Network (GMN) via a thread I initiated under "Global Malaysians Forum: Business and Professional Networking (topic: Forecasting Economic/Stock Market Trends)". This thread is easily accessible at www.globalmalaysians.com/forum/forum_posts.asp?TID=260&PN=1.
This is what I said then: "Guys, the elusive 1,000 mark? Let me look into my crystal ball for a second… not so soon, but watch out for as 'early' as Oct 30, 2006, most likely by Nov 17, 2006, or latest Jan 23, 2007. This is purely my prognosis from my charts.... you can believe it or not, but just be alert. That's my advice."
As a rejoinder to that statement, here's what I posted on the GMN Forum on Nov 4, 2006: "In fact, I have made a somewhat 'pinpoint forecast' there... I have said that the earliest KLCI may touch 1,000 is by Oct 30, 2006... it seems I have missed by a few days there. But on second look, I made a small mistake in counting the days... I forgot about the DeepaRaya holidays (you see, American charting software does not take care of Malaysian holidays). Add on three or four days and hey presto! the 1,000 level as forecast was indeed (reached) on Nov 2 or 3. Well, I'm a bit of a Nostradamus now, I guess. What happens after this 'first attempt' at penetration (over 1,000) is another matter."
The point here is, not many analysts dare to make such a bold forecast and stick with it. Over the past few days, we have seen the positive newspaper headlines and stockbrokers painting rosy pictures in the print media and online. And they will not stop at that. The chances are there will be more bullish commentaries. Well, I don't blame them. It's what market players are looking (and hoping) for.
I'll not attempt to repeat what the others are saying now. The fundamentals are out there for all to see — there is no doubt about that. Things are getting much better in the economy, with the government proposing more mega projects under the Ninth Malaysia Plan. Still, there is a limit to what the government can (and should) do. It is now more a question of whether the private sector can (and is willing to) come up with the funding, either via private finance initiatives (PFIs) or any other feasible means.
I think the private sector will be able to fulfil "its end of the deal", which explains the rosy picture for business in the Malaysian economy. How the equities market responds is another ball game. Bear in mind that when the KLCI breached the 1,000 psychological barrier on Nov 3, it was doing so after several failed attempts over the years. In technical terms, the KLCI has emerged strongly. This bodes well for the market as a whole, not just the blue chips.

What's next for KLCI?
Now that the psychological barrier is broken, the chances are that the 1,000 point will in due course become the next support level, which is a strong technical analysis that is worth noting.
For the longer term, I had painted a rosy picture of the KLCI in my April 25, 2006, analysis that appeared in this publication under the headline "In Search of the Da Vinci Code". I applied the Da Vinci Code's so-called "pentacle" geometry to my own Bermuda triangle analysis on the KLCI megatrend — KLCI monthly chart with database stretching from January 1970.
Those who missed that article can take a look at Chart 1. Observe that I have marked Wave 3 with an arrow pointing upwards to a question mark. This trend points towards the KLCI going slightly over the 1,000 level by yearend. That was my longer-term benchmark for the KLCI. I was confident about my analysis and have stuck with it ever since. I believe "statistics don't lie, but one can lie with statistics".
So, how far can the KLCI climb before yearend? Chart 2 illustrates some of my conclusions for now. The KLCI's short-term trend (by Elliot Wave Analysis) has just completed a 1-2-3-4-5 impulsive wave sequence — with Wave 5 right on the dot on Nov 7. This may mark an important change in trend downwards for a brief A-B-C correction.
Or, if sentiments are still strong (the KLCI closed at 1019.93 points last Thursday), then the uptrend will continue for quite a while to around 1,035.32 by Nov 22, 2006. When that happens, the waves may require a recount. As it is now, the bulls are not eager to surrender just yet. Hopefully, it will not turn out to be wishful thinking for them.