(Source: Edmund Seow, SIAS Research)

Overall Market Outlook

• The US markets traded down slightly yesterday and we see that the Asian markets are liable to gap down again today.

• With the markets coming off, we might see some profit taking and loss cutting, but overall, there is a good chance we might not see too much further downside.

• To take an opportunity like this to buy into equities cheap might be the best strategy at this time.

• Both MACD and Stochastics have turned down today and we might see further profit taking, but we should expect for the base of the STI to be found soon.

• The STI is looking at a 2760 support and if the market can trade above that, we might see some recovery today.

• Look for stock that is resistant to the downside and once the selling has ended, look for stocks that might give you significant upside.

Strategy
• Keep an eye out for an opportunity to buy into the MSCI Asia fund, as we are confident that once the markets have gotten over the concerns in the EU region, we should be seeing good recovery.
• The region’s still exhibiting good results and once the frenzy in Europe is over, we should be seeing further upside.

• We should be seeing the db x-trackers MSCI AC Asia-Pacific Ex Japan TRN ETF to give further upside.

Extended Settlements for Underlying Stocks


• The markets are trading down significantly and Noble continues to follow the trend of the markets.

• This gives our short on Noble significant upside and we can continue to hold our position on the ES.

• On the other hand, look for a potential opportunity to profit from the call warrants when the markets finally start to turnaround.

• Refer to Table 1 for details on a Noble Call warrant. The ES contract for Noble Group is Noble Grp.ES.1004.

Overall Outlook on STI:

Watch Out

While the US keeps trading down and markets work in the EU concerns, we might be seeing the markets start to bottom out soon.

In the meantime, a market-neutral strategy or keeping cash in your pocket, might be the best thing to do at this time.

Key Market Indices:

Table 1: SGX Warrant Quotes

Table 2: db x-trackers MSCI AC Asia-Pacific Ex Japan TRN ETF Specifications and Quotes

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