False Rebound

Yesterday's rebound of STI was short-lived. Over night at Dow Jones, DJIA started with a 200 point gain, but ended the day with a loss. Think about it? What has changed so far to make the market feel optimistic about the future?

Yes, oil has come down from its high of US$147 a barrel, to US$105 a barrel. Other commodities are also coming down from their highs. It is good news. But what has caused the down fall of yester year's darlings? Sluggish growth, high inflation. They put a halt to the rise of commodities.

Comparing with 2007, we still have a credit crisis, we still have a housing slow-down in the states, and many other countries. Fundamentally, nothing significant has changed.

In my view, the market will continue its downward spiral until a bottom is found. Looking at the charts, it is quite scary.