Friday, 21 September 2012

Who says we are bearish now?

Dear Friends,

I have a friend who posted me a question when she saw her stock dropped in one day. I am surprised that some of us think that the market is bearish. At this moment, I have not seen the panic yet. The bullishness is intact.

Let me indicate to you what I might think as a slightly bearish scenario, one that may cause me to take note.

1) Dow decrease by a triple digit and close at a low (prepare to sell)
2) Dow falls by 2 days with each day closing at low (might sell liao)
3) Dow drops by 3 consecutive days in a row (prepared to enter when selling panic subsides if I think mid term still bullish)

That is an easy way how I gauge the market sentiment. Today, I can't see DOW falling much. Dow falls and gaps down with the stocks at the opening bell because of bad economical report from China and the jobless claims. But it recovered beautifully when the manufacturing Philly FED beats expectation. It shows 2 things here. 

First, there isn't any need to press the panic button, not by the recovery we have today.

2nd is that now that the QE3 thingy is over, market has returned to its normal status where bad economical reports are no longer good for the market. Bad are bad now, and it will cause the market to drop. So shift our eyes back to the jobs status and enterprise output and earnings reports next month!

In fact I treat this slight pause as a good bullish signal. The bullish vehicle can't go on without resting at the pit stop! The bull can't go on without worry!

Don't worry when your Singapore stock falls by 1 cent! Hold it still....

Rgds
Daniel
www.danielloh.com



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