Mar-16 Weekly Preview

I would like to draw your attention on my previous post again:

http://iamwym-stock-analysis.blogspot.com/2008/03/mar-11-market-update.html

It looks more and more like that we are in the similar situation compare to mid- November -- after a one day spike, we go down gradually to test new lows.

The more the government tries to save the market, the worse the market is.

Yes, next Tuesday is rate cut announcement, give the low CPI and terrible economy, I think it's no doubt we have a more than 50 BPS cut, and most likely 75 BPS, with someone even predicted 100 BPS.

For sure next week will be volatile, however, I think how many BPS cut is not that important to mid-term market. To my opinion, the global market is set to uptrend from April to June for reasons below:

1. There have been 4 months decline in row and there might be another here. It's very nature to have 2-3 months rebound.
2. Rate cut in 2007 will show their effects somehow.
3. The government has decided to save the market in a temporal manner for whatever reason.
4. Cheap stocks are hanging around.
5. Shorts have realized the downside potential is limited.
   

That's why I called CAF and other emerging market ETFs for a mid-term swing. Stop loss position for CAF is Shanghai breaking down 3800.