SET Index : Read what we wrote on Aug 10th, and prepare for sub 1k levels on the SET

Hoonthai has just returned from a well deserved holiday in sunnier climes, and has ignored the SET for a fortnight because we knew it was going to be a dull period – and we were right. OK, there’s been plenty of day trading opportunities in a large number of 2nd and 3rd tier stocks, but as we said on Aug 10th…“Summer 2011 is looking like a summer of discontent, with much anxiety, tension and resentment in the public mind from China to the USA, and of course Europe too. What this means is stocks could be under significant pressure for a while longer – several weeks – with the SET going down below 1000 once again.”

So the SET has come down to 1025 – its 200 day EMA value, but there’s more to come and we stand by our call that sub 1000 levels are soon to be seen. We still think 980-988 is within sight. Indeed a more severe move to the downside is likely, and the catalyst for such will be the Fed. We believe no QE3 will be announced on Friday (26th)when Bernanke speaks. We think the markets will get upset, through a tantrum and come down with haste.

For the SET this could well mean a pullback to somewhere between 910 and 920, even a low as 880-900 if something really bad occurs in the world.
















Remember, Europe (ex Germany) is essentially xxxxed. Make no mistake the global top 20 market makers (Goldman Sachs etc) can whack equities the world over, and that is what we expect they will do when the Fed disappoint with a ‘wait and see’ attitude tomorrow.

Gold is likely to pull back quite a bit further, oil will consolidate with an upside bias and the US Dollar will of course regain some ground against nearly all crosses (Baht included) from now until late October, possibly even a tad longer.

Remember what we said on Aug 10th ?

Sell the rebounds but be increasingly careful buying the dips










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