Hi Douglas
You wrote:
<CREAF is currently in a bottoming process. However for seasonal reasons due to the Japanese markets, I figure that we will "waffle" around this $17-20/share price range until we get through the Month of March.....>
I agree that CREAF is currently in a bottoming process. CREAF seems to have a 'cycle' of its own: being 'thrashed' down a month or two before earnings release, and then start shooting up a week before and until the day before earnings release. (This is not a technical analysis but an observation that appear to hold for most of the quarters since 1996, the last quarter being an exception).
The bigger worry is that the DOW will suffer a tremendous drop sometime soon (in excess of 2000 points). Even Greenspan is getting worried about a 'deflationary' era. Most investors in Asia has been so badly hit recently that there do not seem to be much faith in the stockmarkets now. Any short-term rally is being used to 'cut losses', and that includes CREAF.
Regarding the recent IMF bailout package to South Korea, Thailand and Indonesia, quoting from an article in the Washington Post on Jan 6:
"The global institutions designed after World War II to promote growth have become agents of economic austerity. The winners are the large investors who get rescued in this periodic bailouts. The losers are the ordinary people. The International Monetary Fund and the U.S. government are both playing with fire. The Asian financial crisis is the most serious threat to global prosperity since the oil shock of 1973. ... Yes, South Korea needs to open its economy, but at a bearable pace and not at the price of a deep depression. This eerily echoes the 1930s, but you get the feeling that the IMF would rather score some ideological points than help these countries."
Indonesia has totally disregarded the requirement of the IMF in its latest budget unveiled on Jan 6, which had led to 2 days of unrelented selling of currencies and stocks in Asia (including Singapore and Hong Kong; and remember how Hong Kong had precipitated a 554 points drop in the Dow late last year). Thailand has asked to renegotiate the IMF package. (But Indonesia and Thailand are insignificant in the world context!). What is more worrisome is the tankering of the Korean economy which would have disastrous results for Japan (which holds 24% of Korea's debt) and Europe (approx 50% of Korea's debt). And if Japan topples (it holds about $381b worth of US treasuries), then the US will be in s**t. In any case, the recent slide of the Asian currencies will in some way contribute to the coming 'deflationary' period. (China is already in a deflationary situation).
Looks like history may repeat itself! The 'silly old fools' are still in the driving seat.
I'm just waiting (and holding my breath) for the 'run-up' of CREAF prior to earnings before liquidating.
Good luck to all.
Alan |
