My read is that it is going to be very difficult for the market to break decisively to the downside from here. Nikkie futures are trading down 335 to around 14600 right now, but it is very illiquid trade. In order for the Nikkie to mean real significant problems for the insurance companies and banks, there needs to be a decisive break below 14,500. With Japan's economy claimed to be just entering a recession, I expect that there will be major efforts by the Japanese government, and other foreign governments, to try and hold the market up over there.
Last night the Nikkie held 14,800 and the Hang Seng held 7,500, which both should be significant support levels. China's SSE composite has strong support at 1350 and it successfully held 1360 last night. I see the Yen/Dollar finding good support at 147. I suspect that there will be a sell off on the open of Asian trading tonight with a descent recovery by the end of the sessions. I am also looking for the DOW to rally after the bonds close today, and I am still maintaining a down 60 point close.
One of the major leaders to the downside has been the semiconductor stocks and they are actually trading up for the most part today, with the SOX actually up .2%. |
