When will the bloodletting stop? Stock markets took another round of whacking

Equity market worldwide took a beating again today, as selling continue in the afternoon. News of Chinese banks being asked to pull back loan (yest the news is that they were asked to stop giving loan) give the shortists new ammunition to pound the market.

The recent selling is extraordinary and is almost brutal as prices plunge in quick succession. The price action seems to be indicating that big funds are pulling in a big way, and the shortist are definitely having a field day over the past 1 week.

Fundamentally, the selling is overdone. Everyone knew it, but at the same time, as long as the funds refuse to come in to buy up the market, the overall weakness will prevail. The freefall is exacerbated by margin call and contra players taking a hit in recent days. This will restrict further buying power for the days to come.

At this juncture, capital protection is a priority and all trade should come with a tight stop. If you are in the money do ensure you take them before they evaporate.

How far more will the market go? I frankly can't tell. Technically, the chart is oversold and a rebound should be in place. However, I am urging all my kaki to play on the cautious side and wait for Friday before considering going in.

Tonite is FOMC...which I do not expect anything new. Tomorrow Obama (should rename O Ma Ma) will be giving his state of union speech. I wonder what he will be saying this time round.

I am still putting my bet that this selling will not abate until O Ma Ma end his populist war of the banks stance...yes, personally I do think there is a conspiracy going on (yes you can laugh at me).

Coming back to my serious self, the charts attached are definitely looking ugly. Trend line and supports are pierced and the momentum definitely turning down. Is it the Bear market, i can hear you ask? I personally is still not putting my bet on it. Fundamentally, I do not see the world economy sinking into a new round of recession. Perhaps it got something to do with the White Tiger coming...this is a new theory, and I bet the remisers will be harping on this soon once they run out of reason to give their clients after days of selling.

Anyway, if you do hear that from your broker (or from me!), do know that all bad news has been absorbed and guess what....its shopping time again. As for now, stay out!

This blog is a selections of my investment views to my client. If you find it useful or have additional information to share, please do let me know. These blogs are my personal views and is not meant to solicit any sales or investment on any securities or investment. I may have vested interest in some of the counters or investment products, hence please invest at your own risk. As usual invest in what you understand and do your own homework as usual.