Saturday, October 18, 2008

Still hopping for the elusive rebound?

US markets seem to have stabilized a little bit. But the trend is still down:
World Longterm Midterm Shorterm
S&P500 Down Down Down
DJI Down Down Down
NasdaqComp Down Down Down
Nikkei 225 Down Down Down
Kospi Down Down Down
SSECI Down Down Down
HSI Down Down Down
TWII Down Down Down
STI Down Down Down
SENSEX Down Down Down
FTSE Down Down Down
DAX Down Down Down

I guess every country's leader will come out to calm the market. Fundamental is still good, will not be affected by USA and bla bla bla. But don't believe what they said. Why? Let's analysis the different scenarios:
  1. If the market is good, nobody needs to say anything. Everyone will know it.
  2. If the market is bad and if the leaders say that it is bad, everyone will panic and the market crashes to almost zero instantly. This is something we don't want to happen.
  3. If the market is bad and if the leaders say that the market fundamental it is still strong, some will still believe the words, some will not. Some sell, some buy. The market may drive lower or it may go higher.
Given choice no. 2 and 3, of course the government will take no. 3 because it gives them a hope. No matter which choices is taken, the smart one will still get out of the market.

I think that there will be no safe place to put your investment in this climate. Even gold looks vulnerable now. Remember that everyone is deleveraging. I think that some hedge funds may be selling gold to raise cash. This is the last commodity that has not crash yet. Gold going to 700 or 550 is possible based on the chart.

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