Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: Cynic 2005 who wrote (8273)	10/28/1997 7:53:00 PM
From: Paul Yang	Read Replies (1) of 94695

I am a little puzzled by today's movement. It took investors twenty four hours to turn bull from bear. I don't think much of it are short covering. Since 7 out 10 times in the past, market rallied the day after a drop of more than 8%. Base on this observation, investors on the sideline jumpped in early to participate in a tremendous rally today. This morning around 7:00am, Dow turned from -145 or more positive in less than twenty minutes. That first wave is definitely the institutions, then small investors jumpped on the bandwagen and sustained the rally. Maybe this startled some managers who dumped earlier, and they jumpped in to take on new position. The first jump was quick, the second jump was just as quick and strong. Anyway, this is my opinion. It will be interesting to see what develops tomorrow. What troubles me more is the action in Hongkong. Continuing snow ball effect will have a detrimental effect on the economy. The situation was bad enough already when HK central bank decide to fight currency speculation with hiking the overnigh rate, a move that I don't understand --why don't they used $80billion in foreign reserve to defend the Hongkong dollar. Now that HK market and most of the southeast Asian countrie enter a period of slow down. U.S. will have tougher time exporting to those countries, which means that lager coporate earning will take a hit in the upcoming quarters. The implication of this is a slow and painful slide downward of the U.S. market, triggered by disappointing earnings. Yes, bear may come and stay this time.

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