Chinese New Year

Apologies if you've checked back several times just to find the same blog entries. In view of the Year of the Fire Pig (I wonder why the media keeps claiming that this is the Year of the Golden Pig), I would like to wish everyone an enjoyable year ahead!

Too bad for those who thought that they've given birth to a little gold piglet. Tough luck. Life is capable of playing more cruel jokes sometimes. It pays to be a little more well-informed, although too much information can cripple action.

My unofficial extra-curricular activity has taken a back seat in light of the recent workload at the university. I still try to read related articles whenever I can.

The recent run up of the STI has kept many people to wonder when the correction will come. Bulls keep chanting higher while bears are taking up defensive positions. Being risk-adverse, I'm mostly playing spectator these days. Some opportunity costs involved here, but the market will always be there. Capital protection comes first for me.

Even if you're not really keen on news and the stock market, you should have heard something about the STI coming down 80+ points on Tuesday. This was followed by another drop of 120+ points on Wednesday. Although fundamentally, everything remained the same, the prices were a bit too high for people to believe in. Hence, any bad news becomes exaggerated while good news about earning profits are drowned.

From my limited knowledge, 3 main events triggered the sell-off.

1. Rumours that the Chinese Government will impose a Capital Gains tax to curb speculation.

2. Mr Greenspan's comment that US may possibly go into recession this year (note that he said possibly, not probable)

3. Rising interest rates for Japanese yen


Well, I don't think the market is going to crash. But my belief is that STI may continue to drop to the range of 2800-2850 before any form of uptrend is evident again. Of course, this is only my opinion. It pays to bear in mind that I'm not even trained in technical analysis...yet. I also do not have the advance weaponary that are used by the fund houses.

On a sidenote, this correction period has highlighted 2 things to me. Firstly, I seriously need to learn more Techinical Analysis. Secondly, knowledge in what warrants are may be helpful.

I hope I don't get barbequed like a pig this year in the stock market.