SET Index : Charts suggest a big move imminent, with politics deciding the direction
June 25, 2011 1 Comment
Friday’s bounce on news the Chinese may think they have tamed inflation was a welcome surprise, but does not change much because the next move will be dictated by events over the coming fortnight by the politicians. Much can go wrong for the market, and there is much to point to a hefty sell-off, but if by some chance calm prevails and lady luck is in town, then a swift move to 1070 or so could possibly prevail.
The odds are however for a dip by mid july to 940-950, and possibly 5-7% lower – if things turn nasty.
Our preferred strategy for the week ahead is to trade for intra day gains and…wait and see before loading in to swing trades.
As a side note, Chinese (and indeed SE Asian) inflation has not been tamed. There is a lull in the commodities markets. Simple as that. If you see GOLD trading circa 1300 an ounce, then we can say commodity inflation has been sorted good and proper, but for now risk of food price increases and strong energy rates are far from off the menu.