Banks, Off-shore & Marine & Property plays continued their weakness today. After a lacklustre morning, selling came after lunch with strength. Amid the reasons i heard in forums includes bird flu and GM's supposingly filed a chapter 11 (Bankruptcy protection). The index has now closed at a new low not seen since 30th June 2005. We need bargain hunters to return to push up index. Otherwise, more sellers are expected as they will lose confidence in holding on to their shares. It must be noted however, a rebound from here will be a good sign as it will create a new support level as this was the previous low set last Thursday. The ironic thing is, we have pretty decent earnings report other than creative's results. Tomorrow DBS & UOB will be showing their results which according to analysts are expected to be good. Poor consumer index reading could hurt stocks a bit. I suspect the poor CPI is due to the immediate after effect of the 2 hurricanes. Once lives are back to normal, people will start to have jobs and will spend money again. Currently we still have not seen earnings being affected by the high oil price. Hence I am still bullish about equities. It must however be noted that opinions are often wrong, market is never wrong. : ) I will just observe and take the neccessary actions.
My breakout counters have retraced. However, if you notice, the volume of the retracement is less than 50% of the breakout volume. I would attribute it to weak holders who decided to cash out their profits in a stormy market. I would worry more if the retracement is of a heavy volume or the retracement continues with constant or increasing volume.
Have you notice I had been talking about volume alot? Volume and price actions are the most neglected essentials in most analysis. This is the true parameters that the market technician should be most concerned about as they show the sentiment of a stock.
