Well, it is still too early to tell but the signs are there. Dow ended the day down 79pts while S&P500 was 7pts lower. Tech shares led the fall with Intel and Advanced Micro Devices at the top of the list. Energy stocks also saw some losses. There are market talk about the recent rise on Wall Street were caused by short covering and not actual demand rising. So once short covering has ended, would the market still have the fuel to move on higher? I am begining to doubt my change of heart last week where I changed my bearish view to a bullish one. Things are not what they appear to be. The US markets could still be the Wave-B, which is sometimes referred to as a bull trap or bear trap. Well, in this case, a bull trap.
Both KLCI and STI corrected in the afternoon in line with what happened in Hong Kong. KLCI ended marginally higher for the day but STI ended 39pts lower, about 70pts from its intra-day high. Hong Kong's HSI, saw a swing of 1,600 pts intra-day. The way it ended the day suggest that this could be a buying climax. Is this the end of the Asian bull run? Yes and no. I think this would likely be the top for the next 2 months but for the longer term, the bull run is still very much intact. For now, I would suggest investors to stay cautious and do not take unnecessary risks!
Yes, Surewin, i think your friends are a smart bunch of investors. Just be cautious and keep to your cut loss points.
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