DJ took a plunge -256...which is within expectations as mentioned that short term bulls already turned bearish. The bigger concern is that it is reaching the mid term support which will be a 3rd hit. Implications? If the support breaks, a plunge will be in the making, not a short term one, but a mid term one lasting weeks.
Fundamentals? Jobless rates jumping unexpectedly high means consumption will fall, which means GDP will fall further. Such situation in an inflationary environment? Recession... that's why what the Fed will do ahead is extremely critical. Rate cut? Likely.
HSI short term also turned bearish despite firday's rally. Facing the same situation as DJ, a triple bottom? Or a 3rd break? Given a weak short term, i say the stats for bears are high. Needless to say for STI.
What should you do? Either be a bear or a cautious bull. Tighten your cuts and reduce bullish exposure. Hedge portfolio with puts or short futures. Practice stringent selection in stocks and warrants.
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