There are tons of bad news for the past one week, and these are just 2 of them:

1. Crude oil price plunged to a low at US$40.81.
This is a indicator that the world economics are contracting.
(Note: At the same time, a report showed a surprise drop of 400,000 barrels of crude oil stockpiles, after being expected to increase by 2 million barrels)

2. Worst monthly job losses in 34 years.
On Friday's morning, Dow plunged 258, hit a low at 8118 (test the Red trendline) after the worst monthly job losses was announced. But it managed to reverse the downtrend, and rally 259 to closed at 8635!

So, how did the stock markets perform?

  • Dow closed at 8635, -194 as compared to the previous week at 8829.
  • HSI closed at 13846, -42 as compared to the previous week at 13888.

Extremely negative news on the economy, yet the market manages to hold its own. I have mentioned in my previous post, but I will say it again - The market is bottoming!

A question for you..
"What would you do if the value of your stocks fell by 50%?"
I believe majority will answer that they will buy more stocks. So now that the market has lost about 40% of its value, why are some of you clamouring to sell?


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