Cash-Strapped SPD Bank Plunges the Market Back into Hesitation

2008/2/28 15:12:30

As mentioned yesterday, these two days were originally a very critical period for the market's short-term direction — specifically, whether the MACD red histogram bars could reappear. At such a time, any disturbance could startle the fragile market.

Today, the SPD Bank that once killed the market's bottom fractal extension into a stroke at 4672 points went wild again. This time, it came at it sideways, simply announcing that its capital adequacy ratio was nearly at the red line, and that it was now desperate for money — if 40 billion won't do, then 30 billion is fine too, but it absolutely must have money. This kind of coercive logic — how could it not plunge the market back into hesitation?

Although technically the market stubbornly did not produce the 1-minute oscillation's third-type sell point mentioned yesterday, maintaining the hub oscillation pattern, this development is bound to create new psychological turbulence in the market.

What supported the market from moving into a genuine decline today was nothing more than rumors about upcoming stamp tax modifications. Therefore, in the coming days, market psychology will struggle between these rumors and the pressure of equity financing.

Technically, before 4391 points is firmly held, the market still faces latent pressure for another dip to test the bottom. Whether this pressure comes from undelivered rumors or other reasons is not important.

As mentioned earlier, releasing a stamp tax modification now would have greatly diminished effectiveness, because the biggest problem right now is that the pressure from equity financing has far exceeded any reduction in stamp tax. The biggest problem now is: what if the stamp tax change comes and ultimately produces only a one-day rally? Then market confidence would be finally and completely destroyed.

Operationally, continue following the oscillation principle: reduce positions when upward momentum fades, and re-cover when the oscillation continues downward.

However, today's market did have a bright spot: individual stock activity warmed up. Whether this trend can continue will determine whether market confidence can be restored.

Heading off now. Goodbye.