Sunday, October 12, 2008

World Market Sale Off

What happened to the market? How come the selling was massive? Apparently, according to Don Fishback, there is a rumour that this is due to the margin call that was issued by Goldman Sachs and possibly Morgan Stanley on 2 & 3 Oct on the hedge funds. According to him, a lot of calls will be due on 13 Oct.

Let's look at the world market:
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

Panic selling around the globe. So, the question that comes into our mind now is: Is Friday low represents the bottom?

First thing I want to see is a technical rebound. The chart has gone into overwhelmingly oversold position. Maybe everyone will calm down now. Both US S&P 500 and DJI charts have given a glimmer of hope with a long shadow candle. We may have a bounce next week. How long will it last? Until the next window dressing period (Dec 08)? Monday will give us the first clue on what the market will do.

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