luni, 7 ianuarie 2008

Do I smell "bearish" in the air?

Ladies and gentlebrokers,

Run! I smell "bear".

I think there is something more than just a temporary market hiccup. I think that the graph above starts to tell us about a more serious bearish tendency. As arguments, I use the technical analysis of the BET-FI index. I use BET-FI since it's the composite index of the SIFs, the most liquid Romanian securities.

As you can see, from its inception in 2001 until two years ago, the BET-FI evolution could be fairly consistently defined by an ascending trident formation. During 2006 and 2007 we witnessed more prolonged and dramatic hiccups. Do you remember the spring of 2006? The stuff the heart strokes are made of.... However, the BET-FI was still well in accordance with and defined by the lower arm of the afore-mentioned trident.

But mid-2007 gave rise to a new technical formation, well-defined in its decreasing tendency and clearly counter to the previous main upwards trend of 2001-2007.

There are clear signs there, for those accustomed with the technical analysis: lower highs and lows, three top shoulders and two bottom shoulders already defining a descending parallel channel. We are at the beginning of 2008 and this trend is getting better and better defined.

And this has a name: bearish market to come.

Que pasa? Did the SIFs finally reach their potential? Does this graph speak of economic turmoil ahead? Is this bearish tendency linked with the political instability and the electoral spendings that will surely come in the following months? Are the international funds slowly retreating from a country perceived as entering a "hot ride" period?

Time will tell. Money to be made, money to be lost. "Opportunity" is the other name of "Danger", the old Chinese used to say. I'm sure we'll see the rise of a short / sell market period, at least until the end of the spring (local elections, anyone?), a market of higher volatility and risks.

The Chinese have another saying. "May you live interesting times". In fact, it's not a saying, it's a curse. I'm afraid we're just entering some very interesting stock market waters.

Hold tight: a bumpy ride it's gonna come...

4 comentarii:

Anonim spunea...

ce ne pasa noua, vrem mai multe tate !!! una pe zi nu e de ajuns !

Turambar spunea...

Nesatulule... :P

BTW: Stii bancul cu "nesatulule"? Cu tipul care... Sau mai bine nu. Nu aici. Nu acum. Nu in aceasta viatza. La o bere, coane.


Anonim spunea...

Sa consider asta o invitatie ?

Turambar spunea...

De ce nu? :)