SET Index : Chinese CPI could force a sell-off to 950 or so Tuesday.

The SET and indeed global stocks, commodities and forex await Chinese consumer price index data Tuesday, and if it prints a strong number the chances are stocks will pullback, including the SET, metals will probably bounce a tad and oil trade down to last week’s lows.

The SET has major VST resistance from 970 to 973, and if the Chinese CPI points to strong inflation – which it should unless someone has been playing about with the input data, then we should see the SET head right back to 950 or so, with 959 the day breakdown point. As such, an early bounce will offer a shorting opportunity, or for those who long from late last week, a final exit opportunity for the rebound trade.

The SET has a bad habit if creating lots of gaps on the chart, but at least it has the manners to close them pretty quickly for the most part. Monday’s gap will be filled very soon we caution – to 951.74.

However a daily close or two below 940 is needed to really turn this market bearish, and with a massive amount of global economic data releases this week, external shocks could effect what is already a shaky market in Bangkok.


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