The Morning After

STI, after a stunning sell off (-115.95 point or 3.26%) we are witnessing a strong rebound (+50 point or about 1.5%) One must be asking, Bear Trap or clear skies ahead. I am uncertain as well but here are my thoughts.

1.) Banks and Financial Institution with sub-prime exposure slowly coming out. Latest being Bear Stearns (3 for BS), HSBC, Macquarie. More to come?

2.) One lender is US lost 90% of its market cap as it sitting on possible bankruptcy. 1st of many?

3.) Many people say that SG is not exposed to sub-prime but do they know it for a fact? Nobody likes to hang out their losses. I maybe paranoid but I believe "there is no smoke without fire"

There are many bulls and bears in the market, which is good. The sanity check will give most of us some perspective. I am light on my portfolio, for a small time investor/trader I prefer to wait for clearer direction before stepping into the colosseum to wrestle the might market lions.

Market Talk

I highlighted 4 points in my previous post.

I will still stand by them. The sub-prime episode will not be fully comprehended until everyone show hand.

One by one, more institutions are telling of their sub-prime commitments. When will it end, no one know.

The Yen carry trade, some unwinding in progress as Yen move up from 123.xx to 118.xx now.

Does not look good for the moment. I think clearer direction Will emerge after a few more days.

Lets wait and see.