All That Noise...

Well, it's inappropriate to placate the Korean skirmishes as "much ado about nothing". But the media's response is certainly over-dramatising it, and inappropriately so, when they claim that yesterday's bloodletting in Asian indices had anything to do with North Korea's desperate call for attention, military style. 

The first missiles hit the South Korean island at about 2:30h, with the barrage lasting about one hour. The South Korean index showed almost no reaction at the time and closed almost unchanged on the day of the attack. This morning we notice a knee-jerk in valuations at the opening, only to be completely retraced midday.  


Other indices like the STI below, were already on a downward slope, which simply continued without any reference to the trouble in Korea.

What many fear now is that trouble keeps escalating, in Korea, with the European PIIGS, or any other misadventures courtesy of QE. What few acknowledge is that we have probably already turned the corner!
 "I'll be happy with a pullback of 4-6%" is what I said in a previous blog update, when QE2 was announced.  No one wanted it at the time, now it is fact:
Since 8th of November,
  1. Hang Seng lost 8%, 
  2. STI lost 6%, 
  3. India lost 7%,
  4. MSCI Asia lost 4.5%. 
  5. DJIA & AORD lost both 4%, 
  6. FTSE lost 5%,
That is good enough result for my ongoing perspective, i.e. I believe we are done with this corrective move and markets will resume their upward trend within the next few trading days. 

Gold as so often has already started from its previous low $1335 a week ago to over $1370 today, even as the USD continues its little rally.




 In the chart you will notice that after an initial struggle the currency now has the potential to break out above the Ichimoku cloud, but - with the turning window in force, I don't think it will, which would strengthen the hands in the bullish corner. It could also prove beneficial to take profit on the currency at this level.

More soon.  We are at an interesting juncture.

Happy investing!

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