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Politics : Idea Of The Day

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To: IQBAL LATIF who wrote (16187)	1/8/1998 11:48:00 PM
From: IQBAL LATIF	Read Replies (4) of 50167

I see some signs of stability in ASEA- the green shoots are a successful intraday test of supports in HSI - Japan and Hongkong are higher than earlier lows - it would be good to see Japan above 15000 and HSI to close above 9000 after being as low as 8700- one good factor is Jakarta it has shown some kind of bottom it did go up strongly early inthe session but later retreated strongly.It is mix story in ASEA today- Jakarta stability will atleast take some sting out of yesterday worries of Indonesian debacle much as I consider ASEA to be a key for global growth it has to be Japan Korea and China where the real problems will result in global slowdown although we have seen evidence of slowing down but in face of US economy extraordinary performance this cooling down may what was really required- overcapacity and Cheobel led cartels dumping markets with products coming from factories built with subsidised cheap loans may now be curtailed so bringing some slow down this ASEA crisis will also remove dumping of products which really exerted a lot of pressures on manufactureres in the west. I will expect ASEA to rebound nicely very soon although Korea is down today but after five days of solid rally this should have been the case of profit taking- Jakarta and HSI inability to take out supports albeit temporarily still is a first sign of bottoming action- I think we will see the worst be over if levels I have mentioned are not broken on closing basis but jury is still out we can still keep our bias on holding of key supports but caution is the order of the day- I will assume that todays market action will revolve around the spin market puts to the numbers weaker numbers will not help ASEA and SPA it has to be strong numbers showing continued strength in face of ASEAN crisis- this we will probably get- last few weeks we have seen lower than expected PPI's CPI's and strong employment numbers if any ocassion we needed this more it is today- market will certainly be looking for signs of economy growing strongly- the new economy withoput inflation. 980 on SPA is a resistance - aclose below 962 should take us to 943 area early next week a close above 980 will be very helpful- I will bet on long side aboce 967 break. Bonds will sell one full point to 121,14 area. SOX will resist 262 break even I expect some positive action in SOX leading to first suppport at 275 I will only initiate positions if 280 is taken out on closing basis and not once but twice. A break of 260 on closing basis will require put spread to be established I will anaggressive seller of 200's and buyer of 250 2 to one as I strongly believe that any test of lows will also see a very strong rebound and short positions will be difficult to unwind - 200 put looks to me a safe bet to sell for March and long 250 for Feb a calender spread with an exotic price and size put spread for ocassions like this. In case we see break of 962 I will see major selling in banks and oils- even new round in ASEA crisis will now mainly hit the financial sector, for me diversion of sectors will be very evident if selling pressures persists in ASEA. Lets watch for good action on upside today- if market sells off due to strong number alongwith higher hourly earnings I will take the ocassion to go long at supports.

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