After a splendid close to the year, we open the year 2007 on shaky ground. DJ closed down 88 points on Friday and let us not forget Wednesday it fell horribly from a high of 110++ to close up 11 points only. The inability to close above 12,500 is something to watchout for. A possible pullback could happen. I read the VXO index, we are now at the resistance level. If we break this level, US market can have more downside with possible support at 12,380 thereabts... if that gives way, it should be a spectacular end to January.
As for the local scene, we are a small market and will be no doubt under the influence of US. What's in stall for HSI? After a mouth gapping decline of 400 points, Friday's actions seem to suggest bargain hunters stepping in. But do not mistaken it for strength, strength will be to see HSI break 20,500...if it falls short around there, we can buy PW. Will the bargain hunters be hunted tomorrow? We shall see. Trading volume for our bourse is very high and this is something to watchout for.
An ideal scenario for tomorrow will be a poor low volume open down in the morning and strayed aimlessly not threatening to head lower. Then we will have a chance to close high. The open down is due to reaction by "kancheong" spiders to DJ's 80 points decline. But watch out for HSI.
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