Sunday, May 09, 2010

What more to expect?

I have been asked many times, what more can we expect. Will the market now drop further?

Briefly, the problems arising from the Greece debt crisis do not seem to be over. The problems in Greece worsened because its citizens did not take kindly (e.g. riots) to the austerity measures undertaken by its government to reduce its debt (in order to be able to borrow from its lenders). Portugal and Spain seems to be next in line - in terms of debt crisis.

The Chinese property bubble does not seems to burst just yet. But the Shanghai Stock market had apparently corrected more than 9%. I believe the Chinese property market is just too speculative and might just burst soon. If it does, I would think the repercussion would be felt worldwide.

Most governments/countries are easing on its economic stimulus package. Whatever impact of the stimulus package would have been felt by now. Once the package is withdrawn, we might see a drop in key economic indicators unless the current growth in economy is sustainable on its own (as in without the stimulus package).

Be mindful that the markets just need an excuse to retrace itself.

As for me, I am preparing to invest in good Singapore stocks (by identifying the stocks). I have liquidated most of my portofio months back. Once the correction is almost over, I will come back with vengence and invest most of my funds identified for investment.

Cheers !

PersianCat

What a Week - DOW drops 1,000 points intraday.





Woohh ! What a day it had been on last Thursday. The DOW 30 just dropped more than 1,000 points in an intraday low. The NASDAQ Composite index and S&P 500 also dropped accordingly. Though the markets recovered most of its loses, it still ended significantly negative. Friday's close continues with the downtrend.
There are many reasons (or excuses) as to why the market dropped in such a way. To me, it didn't matter anymore. What is more important is that we have been expecting a major retracement from the major uptrend (starting from its March Lows). This could be it. However, we need to monitor closely the various critical levels identified in the above 3 majors (see the attached charts).
A study of the daily charts for the 3 majors since the 2007 High shows some interesting developments.
  • The last Thursday Lows break below the SMA 200.
  • The 2008 breakdown level becomes a resistance level.
Somehow, I do much better in a downtrend. I suppose I will just have to be more thankful during this period.
Cheers !
PersianCat

Monday, May 03, 2010

Goldman Sachs or Goldman Sucks!

Goldman Sachs (GS) was very kind to me. It turned a discomforting paper loss to a very comfortable real profits on last Friday. I have no position in GS for now. Since GS did not rest from its downtrend on last Friday, it is very likely that GS opens positive today.

I would love to short GS again - possibly today. The next target could be around $137.30 (38.2% Fibonacci level).

The big questions are:

  1. Would criminal charges be made on GS and/or its employees ? Not sure

  2. Would there be any civil suits against GS and and/or its employees ? Very likely

  3. Would Goldman settle the matter out of court? Possibly

  4. Would the whole fiasco significantly affect GS's earnings? I think so

Cheers!


PersianCat

The SPY Who Love Me?

The 3 major indices (Dow30, S&P500 and Nasdaq Composite) are showing potential reversal (towards the south) since the last 5 trading days. Potential short plays could be considered if the market drops the low of the last 5 trading days.

As for SPY (S&P500 ETF), the potential short plays could be made if the SPY drops below the Low of last Tuesday. Since the market did not pause from its downtrend on last Friday, it is highly likely that SPY opens positive today. Whether it remains positive at closing time remains to be seen.



Cheers !

PersianCat