Tuesday 24 July 2012

STI now up by 22 points, Panic subsided in Asia, why?

Dear Friends,

Some friends asked me about the market yesterday. They asked what is my feeling of the market. When I reached home, even my mum tells me that US market has dropped a lot after hearing from TV news.

HSI dropped 500 points and FTSE dropped 100 points yesterday. To answer the queries, I wrote 2 articles yesterday:


In the articles, we emphasized not to panic. That is the last thing a trader needs to do. Today Asia market stabilised as what we predicted last night. STI is up 23 points at midday. Hong Kong is closed because of typhoon. Shanghai is positive. Nikkei a bit down only.

The reason why Asia recovers is because of how US market recovers in midday. In fact, yesterday before US market opens, we already told our readers to watch the movement of the DOW. It will determine if the panic still carries on today.

Our definition of a real panic don't last for one day. It needs to go down at least 3 consecutive days. And in each of the days, it stays down and down. Not a V-shaped recovery like yesterday. Yesterday traders seems to take the opportunity to buy after the 240 points drop instead. Seems more like panic buy and cover shorts.

Confidence is still in the market... Mid Term (next 2-3 months we are Bullish).. Try to accumulate your stocks now!


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