Stock prices are plummeting around the globe; some pundits are already talking of a ‘Black Wednesday’ that happened this week.
US President Donald Trump calls the central bankers in Washington ‘ crazy’, and IMF Director Christine Legard disclaims by referring to the rational actions of a central bank when the economy is doing well, and employment is low.
This is the time the clichés make the round: ‘don’t catch a falling knife,’ “buy when there is blood in the streets” and perhaps the darkest thought of all: “I knew it, I should have sold my stocks and buy gold.’
So where are we at – Is a Thailand Stock Crash in the Making?
Asian stock markets tumbled yesterday after a massive sell-off in the US the night before. Hopes for a market recovery were shattered last night after a roller coaster in the US Stock Markets that ended well in the red leaving market observers scratching their heads.
Asian markets reflect that sentiment this morning with the Hong Kong Hang Sen opening moderately in the green. Also, the Taiwan TAIFEX edged up slightly whereas the Japan Nikkei and China Shanghai Composite remained in the red.
Along with these signs that the market plunge is easing both the DOW and NASDAQ futures are up this morning.
A look on the broader market fundamentals shows some signs of slowing, and there are warning signs like the latest IMF report, trade tensions between the US and China, Italy looking to renegotiate the EU financial stability criteria, the demise of national currencies in Turkey, Argentina, and South Africa.
Now, this is quite a list, but fundamentals remain intact, leading to the question what just happened. Raul Elizalde inferred the sandpile metaphor in his Forbes contribution: While a sandpile is accumulating, unpredictable avalanches occur from time to time without apparent reasons. Stock markets crash from time to time.
Admittedly, this narrative comes in handy to soothe one’s nerves during these hectic days, but the fundamentals are that the Worlbank just raised its forecast for Thailand Economic Growth.
As for the SET technical analysis suggest strong support at 1680 (Fibonacci ratio 50%).
While the future is hard to predict, our motto remains to keep calm and trade on.