A Truce!

A Truce is defined as temporary stoppage of a war in which each side agrees with the other to suspend aggressive actions. Ceasefires may be declared as part of a formal treaty, but they have also been called as part of an informal understanding between opposing forces. An armistice is a formal agreement to end fighting.

Hah! based on the definition above, it is best describe the market situation yesterday. but bear in mind it is a TRUCE not ARMISTICE ie the bull and bear has not signed any treaty to stop fighting. Both side is merely take a rest to restocking preparing for the next warfare. You agree with me?

So who is the winner in round 1? Pretty obvious, the bulls! The fear in the bears would have been subdue a little, as speed of them throwing bullet wastefully out of fear came down. The bulls neither were able to march further as the they could sense that the bears have wake up and giving good fight, and hence the fear is retreating! with the balance of force now, how do you predict the what will happend in round 2!

As the propensity model suggest, equity market is where the highest % of wealth is kept in the world, should continue to move up, so long as the negative news flow is controlled properly. The study of macro economic factors are not meaningful anymore at the current century as we all already know that the most of the Developed Nation is in different forms of trouble. Hence in the world economic growth equation, so long as as the Developed Nations remain constant it will be big plus already. What i can see is, the market refuse to fully factor in economic bad shape of the US and Europe till blood is seen in streets. In short, investors are already aware of all the negative economic parameters, some how choose to ignore so long as they have not seen them with own pair of eyes and hear them with ears. Hence, so long as you controlled what investor see and hear, market is deem ok. After all, do you think the rich has a choice! Prices of commodity, gold, property (in Asia), agriculutural products or even antique have gone up so much in these couple of years, where else to put thier money.