Morning Roundup

Morning folks.

The US markets ended in a bloodshed as expected. Someone asked me bout price preceding news and what it means. Have you ever heard of end of day reports, eg "STI closed 2% lower on economic worries". Ok that is because they can’t find a good reason for it. The US charts showed a retracement is upcoming, and when it happens, analysts will pin it down to whatever news that seemed to cause it. So for the US markets it will have something to do with a recession confirmation and what Paulson said. The idea is, we know from the charts that there is a high possibilty of it coming down, we just don’t know the news. And frankly, traders don’t bother what news it is. News, is a catalyst. Price precedes news in most cases.

The down-draft on the US markets took roughly 50% off the gains from last week, with very light volume and this will be interesting to watch. Obviously, it wasn’t much of a panic sell but rather, a lack of buyers. At 3pm once again, the market sold off after trending sideways. Support for S&P is around the 61.8% retracement level which is around 800.  At some point I would expect this to be tested, be it at a close, open, or intraday.

As for the STI, watch out for the trendline support. I think it stands at around 1610 or so.. Connecting previous 2 lows together.

Shorts entered are Capitaland (I like it opening higher and trended down, unlike CityDev) and UOB on break of 20MA and good risk reward. Risk is around $1.. reward.. is more than $1. haha.

Back to work… later folks. I wonder if there will be gap covering!