100 years....last week (the first week of Jan) was the worst week
for the DOW in 100 years. Are we going to have our January Effect or
is it going to the pattern of 2007, where hopes easily get busted?
The vicious first week of 2008 also brought the Weekly DIA charts at
the border of a Head and Shoulders formation, if violated, could bring
the DOW down by over 1,000 points (Note: It has been violated!).
The bogeyman called Volatility is very much alive and kicking in 2008.
We'll wait and see what happens.
If we go up, the Carry trade will rebound, if we go down, we'll start
buying Yen and shorting the high yielders. Either way, we'll probably have
a clear trend next week (instead of being frustrated and flabbergasted!).
On Tuesday (8th January), the downdraft continued, with the DOW succumbing
238 points despite being up earlier in the session on hopes of a rate cut.
It seems that such hope is instrumental in preventing us to fall further into the
abyss. This morning, futures are up, but who knows what will happen in the
actual session? Makes good trading for USDJPY though.
Chief Shook
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