SET : After 1100, its 1125 then 1140
April 10, 2011 2 Comments
We doubt the SET will fail at 1100 this time, due to the elections and the continued flow of foreign hot money from overseas. A near term top at 1100 or 20 to 40 points higher is possible, an a solid correction would not be a bad thing, but overall we think the market will manage to go higher during Q1, and could easily hit 1140 if not a tad higher in late April or May.
The wild card is of course the global QE 2 rally, and if something happened like Bernanke cutting short his epic spending spree, then yes the markets will correct like a ton of lead…and the US Dollar will rebound with style.
So keep an eye out for a huge correction on the Dow – 2.5-3.00% in a session, due to bad news for the markets (QE2 ending before June).
Otherwise we think the ramp will continue for several weeks yet, and eventually, maybe in May or June the correction will strike and at very long last we will have a sea of red on the screens.
Make no mistake, this rally is fueled by the mad Americans, and with the British and Japanese all playing the loose monetary hand without much chance of a change any time soon, the immense liquidity in the market will not be stoppable just yet we think.
That the Fed does not see inflation as much of a risk is a sick joke. Anyone who eats drinks or drives will attest to it being a major issues, but alas the US only focus on their home prices, which of course are not going to see gains just yet.
The SET is in a sweet spot, and our best advice, (which we follow ourselves) is to trade hard and fast when the going is good….and it’sas good as it has been for nearly 20 years in Thailand right now. Only the mad ramp of the early 199’s was more fun….and profitable.