It is a Small Small world!!!

Last Friday, we see a significant sell down in US equity. As usual, local investors/traders take clue from last Friday lackluster performance, and begin their bear operation on STI index, which significantly breach the critical 3200 support, to hit 3187+ (at this moment I'm writing). Unless STI index overcomes 3200 and 3250 with conviction, the much anticipated Chinese New Year Bull Rally will be delayed. As this is a short trading week, do expect volatility as institutions and retail players take profit to minimize their exposure during the weekend.

Inter-market theme
Take a look at the Dollar Index. This index measures the value of US Dollar (world reserve currency) relative to a basket of other countries, with Euro taking the heaviest percentage. Last week we see US index breaks out from its trading range, and begin to creep higher. This means investors may be getting risk averse and begin profit taking, especially when we see 7 consecutive weeks of gain in US equity markets. If US dollars go up, it will point to the unwinding of carry trades and risky assets. Equity market might be hit! So tread cautiously ahead...