DJIM #3 2008
Monday, January 21, 2008 at 09:48PM -60 SPX, -76 Naz 100! Oh yes, this is just the current quote of futures trading. European market and Asian market were both hammered on Monday. Continuation is evident in some markets already. The SHANG has seen 4575 half hour into trading. These are the facts we have to deal with when the U.S. market opens for trading tomorrow as of tonight. Is it going to be bad? Yes it will be! Right now, we basically have the world's acknowledgement that U.S. may be going into a recession, or at least with the concession that the U.S. economy is slowing down big time. They voiced their opinion by selling off the equity market as we slept on this holiday.
For DJIM, we've been pounding the table to be in cash for nearly a whole week and this isn't any big surprise for us. We've already had the SPX skid 5.4%, NASD 4.1% and DJIA 4% late in the week and now we'll get more. What we wanted to see is some full out panic kind of trading and spike in VIX and we finally may get to see it this week. Having a market potentially crashing is never good news, but it's definitely an opportunity for those who have been waiting for such an event. Although nothing is for sure or certain at this moment, but one thing is getting clearer and more probable. We are setting up for some panic selling. Basically, if we don't panic now, there'd just be some more prolonged pain in the short term.
Tomorrow is definitely going to be at least an entertaining day. At this point, we wouldn't want to be too eager to jump into any trading conclusion on how tomorrow is going to play out. We'd monitor a few things closely and decide if a setup is tradable next couple of days. For now, keep a tight grip onto your cash and lets hope for some panic.