Tuesday, August 14, 2007

The Market......



Many people still bullish on the market. For me in the long run I have totally no doubt with them but in the near term, I still not Confidence to the market. The reasons which support my view as the below:


  • The Subprime problems has already spread through worlwide from US to Europe and of course next will be Asia ( China and S'pore). A smart trader will definetely know the danger when he saw all the Central Banks are start activated their rescue plan to provide liquidity to the market where by the last time it only happened during 911 incident. This indirectly has shown us a very clear picture that the global equity market is really SICK.

  • The Superb China market is another fear factors which we need to take into consideration. Just remember "Newton Gravity Law" ( anything which u throw up will definetely come down) F=ma; F=force m=mass a=acceleration. The higher the momentum and the speed then the greater the force it will be. This week Shanghai can up 200 points for you next week it might drop back 250 points for you too.

  • 7 days later China Central bank will announce the report regarding which of the bank are actually engage to the Subprime problems ( ICBC, BOC, and CCB) are amongst the hot spots.

  • Beijing 2008, according to the research China case is really a different story from others host Country. So it is difficult to predict the market will still bull after 2008. Moreover China has their triple bubble problems ( Quality control, Equity, Polllution)
  • Goldman shares were sold down aggressively as investors worried that market turmoil had generated significant losses at two Goldman-managed hedge funds: the flagship US$8 billion Global Alpha and North American Equity Opportunities. Goldman Sachs executives said risk and leverage in those funds had also been reduced. Global Alpha has fallen 27 percent this year, with half of that decline coming last week.

What's happening now? While some hedge funds have put their "no redemptions" clause into action, most are deleveraging, hence the volatility due to the unwinding process

As a conclussion, Physchological problem is still the biggest barriers for the market today.

2 comments:

pekkeong said...

fyi, f=ma, where f=force, m=mass, a=acceleration. The 'm' does not denote momentum.

Ali BAba said...

thanks for the correction pekkeong