Half an hour after the opening bell, Dow dropped 3%.
Before the US market opened, Asian bourses have recorded sharp losses. Hang Seng was particularly hard hit with a drop of 4.8% or 912 points. But the worst was Indonesian Jakarta Composite Index that dropped 8.88%
On the surface, it was a statement from the Federal Reserve (it sees "significant downside risks to the economic outlook") and the concern that Greece won't be able to avoid defaulting on its debt that caused the sell off. But the actual facts is, "we are in a major wave C bear run" and the sub-wave v of wave 1 has started as the sub-wave iv rebound has been completed. The next short term support level for Dow that I am looking at (end of wave 1) is the 10,000 level.
German DAX dropped about 4.4% at this moment, it is on its way to complete its wave 1 of major wave C.
French CAC 40 dropped 121 points or 4.15% to 2,813 at this moment. The index is only 279 points above its March 2009's low of 2,534. Once this level is broken, it may go to its 1995's low of 1776 level. This scenario is worst than the double dip that has been talking about by some investment houses.
After its November 2010 high of about 25,000 Hang Seng Index has dropped about 28% to 17,911.
Looking at its long term chart, the major C can go to below 10,000 level, that is another 45% to go.
Watch out for the Greece's default and its move to break away from the Euro. After Greece the focus will shift to Italy and Spain. Still a long way to go. Don't forget about the unrest in North Africa and the Middle East
.
No comments:
Post a Comment