Sell in May and go away....

I believe many of you would have heard of this cliche saying especially for those who have been in the market for long.

Today is the first trading day of May and it is a really quiet day with not much trading activities and thin trading volume. Moreover the world cup is just round the corner, many traders will tend to be cautious. During this period of time, there could also be reduced capital inflows, savings set aside for vacation trips and buyers at bay due to companies' announcement of results and dividend payout.

Risk aversion strikesUncertainty #1: Europe’s sovereign debt crisis
Over the weekend, Greece accepted a bailout from the EU and IMF worth more than €100bil to avoid default. In return Greece will implement austerity measures worth some €30bil that includes wage cuts, 3-yr freeze in pensions and a 10% increase in sales tax. While there could be a knee jerk reaction to the bailout in the immediate term, uncertainty remains. The concern is that 2-3 years from now, Greece will still have an unsustainable debt and will have to restructure because it will suffer from a very deep recession in the mean time, according to a University of California professor (source: Bloomberg).

Uncertainty #2: US financial reform bill and Goldman Sachs lawsuit
The SEC’s lawsuit of Goldman Sachs and the spectre of criminal charges against the Wall Street firm added to market volatility last week. Shares of Goldman were weaker by 7.7% w-o-w as the company’s executive testified before the Senate. Then, there is also the Obama administration’s financial reform bill that could get passed by end-May. Whether the Goldman case portends more regulatory controls remains to be seen.

Uncertainty #3: China policy risk
The SSEC continued to reel last week, down 3.7% w-o-w as the Chinese government introduced more measures to cool its property market. A moratorium has been placed on fund raising by property firms that could block RMB110bil in share issues planned by 45 companies. In the capital city at Beijing, families have been limited to one new apartment purchase and home loans will be refused to people who cannot prove they have paid taxes and made social security contributions in the city for at least one year. There is also concern that China could also introduce a property tax on residential housing by end June on a trial basis in Beijing, Shanghai, southwestern Chongqing and the southern city of Shenzhen.
-DBS Vickers-

I realised that I do not need to log into the GL system to see the market's performance!
Just take a glance in the office and I know exactly wat is happening.

Five signs in the office to warn me that the market is consolidating or moving downwards.
1. The smell of medicated oil getting stronger and stronger
2. Table-top fans switched on. (Remisiers feels hot when the market is down... panic.. :>)
3. Literally no ringing of phones
4. Gathering around to talk or chit-chat
5. Looking at the computer screen and shaking their head

Five signs in the office when the market is up and running.
1. People shouting breaking counters once every hour
2. All table-top fans switched off
3. Remisiers joking and smiling happily at the computer screen
4. Phones ringing non-stop
5. Busy keying in orders