Sunday, November 29, 2009

Dubai shocker and what i will be doing

On this night, i shall write about my thoughts on the latest market shocker... Dubai to delay payment on its US$60B debt. Global markets had already been greatly shaken. STI will open Monday and it's direction is highly anticipated to be down, the magnitude is everyone's guess though. Next question will be... is this Dubai a non-event? Or a perfect reason for prices to pull back? Is this the end of the bull?

Firstly, my opinion on the fundamentals is, US$60B is chicken feed for UAE to rescue it. Surely we saw how the government in a concerted efforts print hundreds of billions in 2009? Also oil-rich state? How to go belly up? Then the news say, it's the repercussion that they are worried about. Hmm... recent years, i didn't read about any major interests in that city... they are neither key exporters or importers in global economy. however, as a green horn, i shall watch how the market reacts to it.

STI breaks 2700 points... should i be happy since in my earlier posts i had anticipated it to give way? Happy i am not because only the banks are moving higher. The rest of the sectors were lacklustre. In addition, my own portfolio basically at a standstill... near breakeven level only or sometimes swing slightly into negative. Like i say, if my portfolio didn't grow money, i know i am still not right as yet. What awaits me this coming week will be daunting.

Daunting because i have two choices, do i run my stocks? (SGX, CDL-HTRUST, Hyflux) or do i look to long? Maybe i should short? I am tempted to set up a very complicated hedge where i short some on Monday to hedge my longs. But i do not have the luxury of time. These days alot of travelling, you have a higher chance of meeting me in KL than Cityhall. Thus, i have decided to stick to my stop loss levels. If time permits, i will post in coming days. In time of chaos, only technical levels is what i can depend on for surely if i were to trade by opinion, i may bleed. So this takes care of my current stocks.

Now if this is just a blip the market is looking for, it is a glorious opportunity to load more into the year-end rally. If stocks do not breach my cut loss, and reverse from near support, the risk/reward favours a long. Even if i am wrong, the stop loss is nearby. But if i am right, the reward outweighs the risk.

How about shorting? Yes, i will not hesistate to liquidate my longs and turn short if those significant support levels are compromised this coming week.

Sorry that i disappoints anyone who is used to this recently, i have other priorities to take care of. If got good opportunities, I will update via here. If you are a graduate, do use the forum, i will give my two cents there more often.

DISCLAIMER: The contents in this website are for fun reading and must not be taken as a buy or sell advice. You must do your own analysis on top of my postings. By reading this blog, you agreed that i am not responsible for your trading.