Tough Times in Stock Market?

Posted by admin on November 5, 2009 under Articles | 2 Comments to Read

“Tough Times”

The market is filled with pessimism and “loud cries” at the moment. Stock prices “seem to be” descending, particularly for pennies and small caps. Time to fully exit the market? I believe TA-wise, things are looking bad. Some are anticipating a big correction or even a crash bigger than previous.

While I concur that there’s nothing at the moment for STi to scale new heights, I do no expect another “crash” soon. TA’s measurements and forecasts are generally within shorter term context. For example, the change in market sentiments is “measured” from its peak (2739 if I am not wrong). Not hitting a new high and starts reversing imply bearishness? FA-wise, there is no concrete basis for a substantial dip though prices should not have gone so high earlier…

While the sentiments are currently based on “good news is bcos there is nothing bad now”, a consistent climb for indices will be difficult. In fact, we are at a stage where good news (from individual companies, countries or regions) are beginning to be ignored. Economic situation has becomes complex, requiring delicate balance in transfer of “stimulative economic baton”.

During such periods (downwards drifting), it’s not advisable to take new longs, especially with money that you are not supposed to or comfortable to use for investments. For traders, perhaps your number of profitability bids should also be reduced when doing intra-day or within T + 5. My unrealised profit for remaining 3 counters is reduced to nil but will not be liquidating my counters (for now) due to these reasons:

* Businesses and profitability are not affected.
* I believe it’s a passing dark cloud for now. ~ of course, this comes with a need to review closely
* Shortists are also having a difficult trading period.. else you would have seen numerous messages in big caps or hear their loudest bragging rights.

Franklin
RMAO
1.00pm ~ 5 Nov 2009