Yesterday the stock market went through the whole market cycle of selling, panic selling, forced selling, & bargain hunting all the space of a 4.5 hrs. A low of -9% was seen for the day before it rushed back up in the last hour to close down some -2.4%.

So what happened yesterday?

  • Well oil prices – we know they’ve been dropping and thus 1/5 the market should continue to drop (anything related to PTT Group)
  • The Economy isn’t recovering as fast as stocks are pricing them – again something we already know
  • Valuations are high – again something we already know
  • Best answer I can find, there were rumours about the King’s Health – reminds me of 2006 when a broker at a foreign bank here spread the same rumours and the market dropped also by 8% (if memory serves me correct)

What to do next?

  • Again – from memory – I wouldn’t be surprised to see the market be weak for another 1-2 days
  • LTF/RMF buying still coming in at the end of this month.
  • The market is still up some 15% this year, that isn’t bad at all, it’s close to the holidays, there’s no point for a rattle like this to affect the holiday spirits, in 3 months from now everyone will have forgotten about it anyways.

set01Source: SET


  1. Thanks Pon for the update, I’m still bullish on the medium term for oil, supply can be affected a lot more quickly than demand and prices will shoot back up if that’s the case. Energy shares will look mighty attractive after about another 10%-15% dip in the coming weeks IMO.

    • Well..OPEC is pumping oil, iraqi oil is on the market, iran oil coming to the market, natural gas being found everywhere, US dollar doing well, wouldn’t be surprised to see oil stay low for the next few years.

      • Yeah, Oil is a long term game, we have had high prices for the last 3-4 years and now we are headed for a down cycle. So it is time for the old mantra to buy low ride out the down cycle and sell high 2-3-4 years down the track.

        With Russia how it is, would not be surprised to see some oil producers there fall over in the next 12 months.

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