Lets look at the STI and HSI weekly charts so far.....
STI is still firmly in a downtrend. Any rebound from here is going to be capped at the 3000 level and a break downtrends will indicate a midterm target 2600 as the next level of support. Volume is thinning out compared to last quarter of 2007 pointing to signs of bottoming out but prices are still dropping so there's no reason to get aggressively long yet. The last bear market lasted for 2 years from 2000 to 2002 and we are currently only 1/2 year inside this bear. No one will know when this bear market will end but bull markets traditionally last for 2-3 years. Lots of speculators have lost tons of money saying " this is tooooooo cheap".
To put things into perspective, the typical bull market lasts for average of 3 years. Lets say u picked the exact bottom. That would just mean u are 2-3 weeks ahead of those u invest their money when all the signs are clear. Would that make us a lot richer to pick the exact bottom? i.e 2-3 weeks advantage in a 3 year bull market. I think its not worth it. The more possible scenario is for us to lose all our capital picking the bottoms and when the bull market comes, our investment capital has all been spent. Pick ur choice.
HSI is weaker than our market for the past week due to the influence of Shanghai Index. China keeps crashing everyday. The bubble has burst. Its very likely that HSI will see itself below 20000 mark in the past few weeks.
The week ahead:
FOMC meeting is on Tuesday night at US side so everyone will be watching out for the rate cut news. This time round markets are quite mixed going into this rate cut and there is no clear trend yet. Monday and Tuesday will be very interesting for STI and HSI to see how it views the upcoming rate cut. Interesting --> Volatility.
We all have to learn to love and hate volatility right? :p
STI is still firmly in a downtrend. Any rebound from here is going to be capped at the 3000 level and a break downtrends will indicate a midterm target 2600 as the next level of support. Volume is thinning out compared to last quarter of 2007 pointing to signs of bottoming out but prices are still dropping so there's no reason to get aggressively long yet. The last bear market lasted for 2 years from 2000 to 2002 and we are currently only 1/2 year inside this bear. No one will know when this bear market will end but bull markets traditionally last for 2-3 years. Lots of speculators have lost tons of money saying " this is tooooooo cheap".
To put things into perspective, the typical bull market lasts for average of 3 years. Lets say u picked the exact bottom. That would just mean u are 2-3 weeks ahead of those u invest their money when all the signs are clear. Would that make us a lot richer to pick the exact bottom? i.e 2-3 weeks advantage in a 3 year bull market. I think its not worth it. The more possible scenario is for us to lose all our capital picking the bottoms and when the bull market comes, our investment capital has all been spent. Pick ur choice.
HSI is weaker than our market for the past week due to the influence of Shanghai Index. China keeps crashing everyday. The bubble has burst. Its very likely that HSI will see itself below 20000 mark in the past few weeks.
The week ahead:
FOMC meeting is on Tuesday night at US side so everyone will be watching out for the rate cut news. This time round markets are quite mixed going into this rate cut and there is no clear trend yet. Monday and Tuesday will be very interesting for STI and HSI to see how it views the upcoming rate cut. Interesting --> Volatility.
We all have to learn to love and hate volatility right? :p
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