10:21 am - Market Report by Bill Wermine

Dear Traders,

The world stock markets are on hold and are yet to resume their downtrends until the powers that be in Washington decide on the bailout. The cartoon below expresses
my feelings. No matter what they decide the bear is in control and will claim more victims.

Just the way we like it, a bailout with no strings attached.

Former Republican house speaker Newt Gingrich weighed in on the Wall St bailout " I find it inconceivable that the Treasury and the Federal Reserve could manage the whole economy of Wall St. And yet that is what Paulson is proposing. I think that is an undertaking of such gigantic delusion that is will be a nightmare," Gingrich declared.

US Treasury chief Paulson and Bernanke have used every trick in their book to prevent a bear market from materializing on Wall St, before the presidential election which now threatens to eject the Republicans from the White House. They have been unsuccessful

Notice the attached Dow Futures chart which is in a relentless downtrend. I would like to see a high volume panic capitulation which is evidence of professional buying before committing to the long side of the Dow. Even then it would be a short term trade with careful risk management

The Federal reserve has tried to put a floor under the stockmarket by slashing the federal funds rate 325 basis points from a year ago to 2 % today, far below inflation. Futures traders in Chicago are betting on a 1/4 point cut on the Fed Funds rate in October as perhaps their final bullet to halt the downwave.

In my opinion it will fail: The reason is that Wall St, and the US financial insiders/ powers- Masters of the Universe have been running perhaps the biggest pyramid scam in all of history being the subprime mortgage scam. The pyramid is collapsing- major financial houses such as Lehmen/ Bear Sterns are bankrupt. Washington Mutual, a 150 year old bank failed- being the largest bank failure in US history. Depositers in InDi Mac Bank in California are still waiting to get back their deposits after it failed. The list goes on- AIG failed being taken over by the government/ Fannie May etc etc.

The housing market in the US continues to collapse with the highest foreclosure rate since the 1931 depression. This is destroying the wealth of the Middle class whose house is their only asset.

If you have assets/currencies in the US I suggest you exit. There is a possibility the US could declare an emergency- impose exchange controls and you could not get your money out. The US mint last week suspended the sale of American Eagle/ Buffalo gold coins. In 1932 Presendent Roosevelt in the US declaired an emergency and made it a criminal offense to hold gold coins or bars. There is a huge demand for gold in the US as a safe haven. Gold dealers are selling their stock of gold coins in some places at a 10 % premium to the gold price.

Open a Phillip Wrap account in Singapore where you can hold any currency cash deposit you wish - ie AUD/ Euro/ BRL. One of my clients opened a Wrap Account and placed his funds in the Lion AUD fund. This fund only invests in short term commercial paper and AUD Treasury bills. It is super safe and for AUD Lion Fund to fail there would have to be a nuclear holocaust and Australia would cease to exist. There are no Fannie May or mortgage bonds in this portfolio. If Obama wins that could ignite some furious trends in the currencies and commodities should benefit.

Continue to run your short US Dollar/Long Euro positions. Hold quality KLSE shares focusing on shares such as Dutch Lady/ F & N and Nestle which I hold for myself and clients. We still have to eat and these companies have solid balance sheets, are well managed and will survive the current volatility. Unlike the Dow, the KLSE had a capitulation last week, selling has dried up, and a solid base is forming from 1000 to 1050. Near term target 1200. I am looking at the CPO market. If the US Dollar collapses on a hint of an Obama victory that would benefit plantation shares and the CPO futures. CPO is forming a floor, there is evidence of professional buying in this environment of maximum doom and gloom, bad news, extreme fear. Reward is the greatest when uncertainty is at the maximum.

Have a good week
Bill

9:49 am - KLCI is likely to move sideway to downward pending on the Maybank - BII deals.

11:18 am - Chart of the Week - Dialog

Buy when it comes back to the support at rm 0.90 - rm 0.92 with stop loss at rm 0.85

10:08 am - Trading Book by Stuart McPhee

Dear Trader,

My friend and colleague, Stuart McPhee, has just released his new book 'Trading In A Nutshell, 3rd edition'. Daryl Guppy wrote the forewordfor him. This is good value and I highly recommend his very reasonably priced products.

Stuart is the real deal. He walks the walk rather than talk the talk. He trades shares and futures in the Australian market and his focus is on Discipline and having a Trading Plan- without which you are a dead duck. He is also an honest man and keeps his word.

Several of our Traders Club members including myself and Martin/ attended his seminar on Trading Plans in the Concord Hotel in 2004 and it helped our trading results .

Acknowledging that there are thousands of trading books out there, he decided to do something a little different with this book. He hascreated a little trading bundle to accompany the book, however it is only available from his website - not in bookstores. He has included about 10 hours of multimedia training, both video and audio tutorials on a bonus CD to compliment the book.

The bonus disc contains a number of useful items, including: Supplementary instructional videos corresponding to the charts withinthe book to further explain his trade examples and strategies. > 7 hours of audio interviews with him answering his subscribers' toptrading questions, including how he trades his two different methods.> Two additional PowerPoint presentations on chart patterns and reversal signals from his Triple your Trading Profits Workshop.

You can read more about it athttp://www.1shoppingcart.com/app/?Clk=2602942Make sure you grab a copy to empower you to compile that trading plan you need. Before you ask what is different in this book from the othertwo editions, please go and watch the video from Stuart at http://www.1shoppingcart.com/app/?Clk=2602942

I know having a library full of quality trading books is essential and has helped me - I also know this book will be a valuable addition foryours.

Regards,Bill

PS: If you wait to buy the book in MPH you will only get the book - nothing more and not have the chance to get the bonus products. You will also have the opportunity to deal directly with Stuart.

9:30 am - KLCI is moving sideway as Crude oil is moving sideway

Plantation will move sideway too.

5:16 pm - Another sideway market for KLCI

10:54 am - CIMB Research with List of Mega Sales of Companies at Deep Value

Still, look at the price, volume chart of these counters. If you see a stage 1 going to stage 2, take a pick and know where are the support for these counters.