Important Near Term Support Lines Broken Through: 10 year anniversary of Asian Financial Crises
marketreflections.com 030507
Feb 27, 1998 was the day when Asian financial crisis broke out. Feb 27, 2007 was the day when the current correction started.
Three major themes for the on-going correction:
1. Technical profit taking, which had long been expected.
2. Unwinding of Yen Carry trade
Supposedly, Yen Carry trade has been going on for more than 10 years, and with borrowed yen fund at 1Trillion, as measured by CME’s yen short contract.
3. Sub-prime mortgage may be snowballing into a credit tightening condition for
Except the first theme, the 2nd and 3rd themes caught the market by surprise, and market is still evaluating them. Before that evaluation is done, the “sell first and ask later” would continue.
As a result, the Dow broke its 12100 near-term support line, NASDAQ broke its 2360 near term support line, and S&P broker its 1380 near support line, as seen from their 15 minutes charts.
