Saturday, January 31, 2009

Short Term Market Directions

Market nearly tested the low in end January. My belief is that we are at a critical juncture. My bias now is that the market will be up on a bear rally short term - maybe a few weeks or even 2-3 months. It may test the low of Nov21st 2008 before moving up. Last week's actions seemingly indicated that it may not test the low. We may be seeing a rally next week! Remember that we cannot be dogmatic about a particular outcome and that it is in fact dangerous to become attached to any possible result. It is all about probabilities.

If the market fails to hold SP 810, it will move quickly to SP 750. If it fails SP 750, it will probably go very quickly to SP 650. There is a lot of fear but a lot of sideline money waiting to load up. This underlies the importance of using stop loss while you bet on a trend.

My bias now is that it will go up temporarily before resuming the downtrend. This is known as the bear trap in the world of stock market jargon.
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About Me

An engineer by training graduated with B.Sc (hons) and MBA from Strathclyde university in Glasgow, Scotland. Started as an engineer in R&D for 3 years with Philips. Then, worked with DuPont for 13 years. Last job was VP, Marketing for Asia Pacific. Left to start a number of companies in various segments which include a large electronic distribution, a VoIP provider, an internet trading portal in Australia,and an executive training consultancy firm. Have listed companies in NYSE, Australia Stock Exchange, Singapore Stock Exchange Main Board. I was on the Board of Directors for 1 company listed in Thailand, 1 in Singapore and 1 in Australia. Was in the senior management of a company listed in NYSE. Still holding major share positions in the VoIP and Executive training companies. Both are private companies.

Disclaimer

These articles merely reflect the opinions of this author and are by no means a guarantee of future economic conditions, market or stock performance. Though the author strives to provide accurate and relevant data, he sometimes relies on external sources and cannot assure the reader of the accuracy of these external sources. Additionally, these articles are provided for INFORMATIONAL PURPOSES ONLY and are NOT MEANT to provide investment advice to anyone. For investment advice, please consult your professional adviser.