Tuesday, May 11, 2010

Sell On The Run. Share Market Might Not Stay Longer Enough?

Last week we have experiencing quite a drastic move from the world equities market and the Dow Jones Industrial Average (DJIA). Both market have tumble quite lots with the DJIA experiencing at one time DROP of 1,000 points in just 5 minutes. Looking at this scenario, we can say that the DJIA is heading for a correction. A correction that I have been expecting all the while but I didn’t expect it to be so drastic.

Yesterday as we can see, the Malaysian share market has started to rebound after most of the counters have experiencing some downfall recently. I’m not talking about the performance of FBM-KLCI as the FBM-KLCI didn’t represent our whole market true picture compare to other regional markets around the world. I’m talking about the overall Malaysian share market performance.

Overall counters have started to rebound but for how long the rebound will be? From my judgement; I would expect the technical rebound will last in few days but this will based on how the DJIA and the world equities performance. Looking at the rebounds today, I would rather say the rebounds that are happening were just a technical rebound and it won’t last long.

It is true we are seeing that the whole world equities markets are power up just like super Bull Run but for how long? Don’t get caught by this huge rebound. It might be a Big Bull Trap. A trap that might hurt us even deeper.

We have to be careful because after this technical rebound, it would eventually bring down the share market movement and the prices will eventually move lower. Why? The overall sentiment was hurt by the crisis in PIGS country and one thing for sure this is just a beginning. Basically whenever the share market been hurt by the drastic fall down, it would take some time to heal the wound. But I’m doubt that the wound would be heal on fastest phase.

I might be wrong in the whole process but we have to be extra careful. My comment was based on my 15 years experience in watching how the whole markets behave. As I have mention, this comment was just totally my point view and we cannot take it that this outlook will happen. You have to judge it deeply.

No one is great and no one is clever, only the smart one will win the last battle.

28 comments:

Share Journey said...
This comment has been removed by the author.
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