Yesterday night US market plunged with DJ fell almost 1000 points before recover to close down 300+ points and that has send some shivering effect to the global market while still concern about the European countries' debt issue. STI in line with other Asian bourses all gapped down and traded in the negative region with STI fell to an intra-day low level of 2,775.2 ( as of this moment ) and that is about 8.60% drop from recent peak of 3,037. Though STI as of this moment managed to recover above 2,800 level but still not out of the wood yet. Potentially STI could drop to 10% before we can see some rebound.
At the moment, apart from the European debt issue, funds were being detected for selling possibility to prepare for redemption. STI since March 2009 has recovered from 1,500 level till 3,037 peak that is at least 100% rebound. Fundamentally, Asia economy still remain strong and still a driving force for global economy to recover. The European issue should have minimum effect to Asia economy as their exposure is not great. However, if the 3 European powerhouse ( Germany, UK and France ) are unable to absorb this debt issue, that could spill over to Asia countries.
Market wise, STI long term trend still on uptrend but short-term wise is on a downtrend. A 10% pull back would bring STI to 2,700 - 2,730 level and a 15% pull back will bring STI towards the 2,600 level.
For long-term investors, the pull back could be an opportunity to buy, slowly accumlate. For short-term traders, especially those on contra play, could consider buy for oversold rebound but do not be greedy for the profit as market still volatile and yet to stabilize
