The More You Know, The Less You Know

I will officially tone down my bearish view on the market unless there are more negative news to justify the view.

Everyday, it seems the more I learn, the less I know about the market. It is pointed out to me that the US yield curve is normal or positive. From this knowledge, it is better to hold a less bearish view.

If there is change in the yield curve from normal to flat, that might raise a few flags.

The market reacted negatively to today's CPI numbers would likely mean that the Fed would reconsider its aggressive rate cut position and take a more hawkish inflationary watch MODE.

AIG's CDS

CDS iceberg is tipping out of the water, weather it hits like sub-prime, it will unreveal soon.

Today it is just AIG unable to value its CDS, AIG's stock dropped 10%. Will we see more? I think so.

As of this post, Dow is trading at 12132 (-50 pts), off it low.

STI Monthly

The STI is up 200% since the start of 2003. Today, we are correcting and it is down 73% from its recent highs. Most ppl think this is a correction but technically speaking, when an index is down 20% from its highs, it is the beginning of a bear market. I thing 73% speaks volume.

Seldom are we able to pick the bottom or sell the top, I hope we can see a bottom soon. For the moment i see the bottom around 2200 to 2600 for the STI.

STI Charts

Cannot pass the dotted downtrend line. I think STI may close at 2888 today. Looks like the rut on Wall Street is not over yet.