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Trading Diary (March 31, 2009) --- The Dangers Approaching
My judgment on last Wed/Thu – TAKE PROFIT and wait for a 10% pullback to decide what to do – seem to be right call. At the end of day, this news-driven rally plus some tentative sign of economy stabilization have failed to defend Hengseng above 14K and SPX over 800.
I think markets clearly sense the dangers approaching, given 1) Poor earnings outlooks: Not only banks are warning March wasn’t as good as Jan and Feb, but the earning expectation for 1Q09 S&P are -35.6% yoy; 2) Bond may suffer in 2009: GM news suggests that bond holders may be the 2009 victims as equity holders were already beaten hard in 2008. Also, Fed’s QE exercise O/N suggests that their buying didn’t match the market expectations and the constant supply; 3) More concerns over Europe: I reemphasize EU as a wary as I saw a bank bail out in Spain, the D/G of Ireland (AA+) and Hungary(BBB-) by S&P and a continued debate about ECB policy shifts.
I think with G20 going to meet in
Overseas Market Reviews
Overnight, global equity markets declined 3.8% with -3.5% in US, +3.8% in EU, and -4.5% in