My two pennies worth is that we should not be worried about what may happen tonight - it is what will happen in the next 10 trading days that will be of a concern.
Just a few words about my own personal opinion - no essay - but just my simple opinion:
When we see falls of the scale that we saw on the DOW the other night, my bets are that that it will happen again this week and this time we will follow the DOW down on an ongoing basis - it may be a lengthy 3 - 6 month correction.
The US economy is in trouble - we all are aware of that. The gold price has been pre-empting future budgetary spills. Very simply put, the tightening of the monetary policy will pop the asset bubble and we will correct by between 7 and 12%.
I am aware of the demand of resources from India/China - and yes, that would be the best place to put your cash, however, again I warn everyone that IMHO, we have just witnessed an ominous symptom of a correction that will happen - any day now. We can stare at our our graphs and pretend our stocks will be safe - they will not be safe. The P/Es aren't that high are they?
Be careful of your favourite microcaps - they will be first to collapse - this will be the next signal, after which negative sentiment will spread accross the board. I believe the ASX has run ahead of itself - in fact much more than the DOW.
I have seen it before - most of us have - it is staring us in our faces and it is so basic that we have yet to really notice it.
I am now a bear rather than a gorilla - I can smell it.
DOW Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
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