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Strategies & Market Trends : January Effect 2003 -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (313)	4/9/2003 12:40:28 PM
From: Londo	Respond to of 666

The Hang Seng is a tricky index just because it's not open nearly 24 hours a day - it's very prone to gap up and gap down effects from the European and American markets. Since I think SARS is overdone (it's just reminds me of influenza, nothing to worry about if you've got any immune system whatsoever), I don't think the local effects to the Hong Kong psychology (i.e. the damage to the index) will last. However, the other transient condition will be declining US equity markets, which makes me hesitant to cover the short position. In addition, the technicals are very bearish - 8500 should crack and whenever chart support has cracked, the index typically moves 250-300 points more in that direction.. so we might be seeing HSI reach 8100-8200 sometime over the next week or two. By then, the S&P should be around 830-840, which means that I should just wait and get the futures to cash settle to close the position (expires at the end of April). EDIT: If SARS reaches a 'panic' in two weeks, combined with SPX at 830-840, HSI should reach about 7800 by then. If that happens, I will take all that HKD and take a vacation to Hong Kong and visit their futures exchange. I think airplane tickets to HK are rather cheap right now, as well as hotel rates!!