encik wan - Trading Developer on Global Investment and Technical Analysis

Conclusion: 100% cash, e.g. no adjustment

Analysis:

MSCI indices (daily) - US, Emerging market Asia, Europe (2011 Aug 31)
A drop of around 20% for 3 major indices in one month warrants some caution. Since this is a monthly asset allocation review, e.g. no buy or sell except beginning of each month and there is no style restriction, e.g. must buy something, therefore 100% cash is a reasonable conclusion. Even there is a sharp rebound, it will not be done in September 2011. See monthly chart below. Another reason for less than 50% chance of sharp rebound is fear of spread of economic crisis from Europe.

MSCI indices (monthly) - US, Emerging market Asia, Europe (2011 Aug 31)

Note : This is NOT investment advice. Details of asset allocation can be found here

It is time for almost annual currency analysis of US Dollar, Singapore Dollar and Malaysia Ringgit. You can find past analysis of USD, SGD and MYR for 2010, 2009 and 2008.

USDSGD Rate
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Long term support of 1.4 is broken decisively in early 2010. In the short term USDSGD may revert to current resistance at 1.30 (lower bound of short term down channel) before heading for 1.2 and beyond. What could be catalyst of USD rebound? End of QE2? . If that happens, what happen to equity market and commodities without cheap money?

USDMYR Rate

Long term chart pattern of USDSGD and USDMYR is similar : weakening of USD. However in the short term USDMYR may revert to 3.05 from 3.0128 (April 22 2011) due to divergence in USDMYR trend(down) and RSI(up). See chart below.

SGDMYR Rate

For the long term, SGDMYR is on the way to test multi-decade high of 2.5. In short term SGDMYR is also in bull mode. It breaches previous resistance at 2.40 and 2.42 in 2011. It may go up as high as 2.46 within 2011 since it is still not overbought (RSI) at 2.4357. See 2011 SGDMYR chart below.

Thanks to The Monetary Authority of Singapore policy to use stronger Sing Dollar to fight inflation, I think we can assume SGDMYR may reach 2.5 within the next few years as long as there is no currency competitive devaluation.

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