well, diverse views exist in the markets. some say the bouce from 878.94 was the bottom of the current down move, poised for a Wave 5 upwards to 930-960 to meet the 200 days moving average. Some say it would test the 50 days moving average at 830.
As for the sentiment on the ground, general public has been cautious however with optimism. In Asia country recent property launches has met with sales target comparable to those in 2007. Developers lower prices, and people with spare monies come to the market buoyed by the stock market rally.
The property overhang is still substantial with new completion coming online towards end of this year and next.
In China, there are 200 IPOs waiting for the Government green light. The Shanghai Stock Exchange is still at its peak. Hong Kong Index has pulled back but with low volume. There is no panic or worries. Moving averages have cross upwards, signaling Fund Managers to load up Equities. Analyst forecast China stock markets are in initial stages of Bull move.
In Asia, especially China, people throng the airports for inter-city flights, there is no lacking of shoppers.
As some may say, "What Recession ? ".
My forecast in a nutshell is a song :"Killing me softly with his song" a.k.a. slow boil frogs in water.
Nonetheless it is not a straight line down move, but with bull rallies in between. Hence rather difficult to trade for the Day traders, not certain of the genuine direction.
If you are in Long position, probably save up for the eventual rise end of month, if not end of year. If you are in Short, look to take profits along the way.
The low at 666 would be tested at somepoint, whether it wuld be broken towards 500, that would depend on the general mood. So far there is nothing to warrant even a drop below 700. Bços ban on short selling is coming, derivatives and CDS are going to be caged. Credit Spreads are at recent low. Monies is flowing again. Reflation trades are put back on.
Tice of Federated Investors who run the Prudent Bear fund is casted on weekend TV repeatedly talking about his view the low would be tested again and broken into 400-500this year.
A casual talk with my frens show that they are readily shorting the market with CFD, however holding some long positions as well. This guarantees that Volatility is in, and general folks have no idea where the market is heading, which they are made to believe.
When we see capitulation of this down move then the end has come, otherwise it is whipsawing to the downside.
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