Unlucky 7th day, A Sign?
By Daniel at 30 December, 2009, 1:49 am
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My interpretation for US markets ending 6 days Christmas rally is that the Markets are now on the blink of changing trend.
World wide markets had been up a consecutive days before Christmas eve, then there were circulations in financial channels predicting the last trading week of 2009 should be a strong week, as bullies are gearing up for building a solid foundation for 2010 growth; Both UK and Australia markets closed on 28th December for boxing days, with local medias and business publications emphasizing on a possible Santa Claus effect.
It appears to me that the markets had been setup to catch “piggies” who sought what is called “December Effect”. I couldn’t see many financial traders are in heavy Long positions now. Fund managers who are smart enough to stay in the business wouldn’t load their inventories after Mom and Dad investors buying up the already overpriced securities – Most stocks are very thin in their fundamentals at their current prices. Even with Mom and Dad investors, how many more of them could afford to invest at a level that say us;IBM at 131.85 a piece, or Australian favorite au;BHP at 42.92 a piece, at a time columnists are still looking for signs of economy recovery? So based on “Greater Fool theory”, who is the next fool?
Also, volumes give another hint, while the prices were still rising, most stocks, doesn’t matter if they are from Dow Jones, FTSE 100, DAX, CAC40, HENGSENG, TOPIX30, are currently trading at ½ or 1/3 of their average volumes. Some may say that the volumes are lacking due to many traders are on vocation now. Well, while the markets were rising, if their intentions were to acquire, could they afford to take a vocation and then come back to load securities at a couple of %s even higher?
It could be very interesting to see what happen after this.
- WalterGuan
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