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Strategies & Market Trends : Asia Forum

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To: Peter Singleton who wrote (6335)	9/12/1998 2:50:00 AM
From: chirodoc	Read Replies (2) of 9980

Market View US and European markets are looking over-extended. The US market has dropped below its 200 day moving average; the FTSE 100 is at its 200 day moving average. US strategist are mixed; some bullish, some bearish. Foreign investors are again looking to Japan and Asia to raise exposure. However, Japan's economy however remains extremely weak, and the "Geritol Cabinet" probably doesn't have what it takes to decisively turn around the market. Moreover, the downside risk in Japan remains about 20% (to 12,500), while another 7% or so downside risk could come from a weaker yen. Would you risk 12% downside in the US market (to 7,500 on the DOW) for 20% downside risk in the Japanese market? The Hong Kong market is obviously breaking down. Foeign investors are doubting China's resolve to hold the HK peg at US$7.80 per US$. There is also concern that China will devalue the renminbi... Thus, while the US and European markets are looking more risky, investors may be jumping out of the frying pan into the fire by moving from the US and Europe to Asian and Japan too early.

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