SET Index : Show us the money
March 1, 2011 Leave a comment
Once again the missing ingredient is strong volume. The SET and indeed most global markets are going up on what can only be described as weak buying power. This occurs in western markets when shorts are badly squeezed and algo trading can’t really let rip because volatility is low, but in Asia it is due to a lack of conviction from hedge funds and other recipients of free cash from the Fed.
The issues in the Middle East have put a brake on the wholesale flow of the QE2 trade in ‘anything but the dollar’ in Asia, and in our view this is key to near term direction – or lack thereof for the likes of the SET. As noted in an earlier comment, flows would need to increase to 42-45bn for a day or two for the 1000 mark to be taken out.