Bloody February

February marks two of the reddest celebrations in the calendar year. One, Feb 14 marks hearts day, where everyone wears bloody red clothes and give plastic flowers and show fake emotions (haha). Two, it is during this month that the Chinese New Year is celebrated, and people who want to usher in good luck, would wear red from the shirt to the skirt to the socks to the shoes, and perhaps even their underwear.

Today, as of 2:19AM Philippine Time, the US Dow Jones has plopped, plunged, and plummeted by more than 280 points, thanks to this wonderful comment by a US Fed President. Against the backdrop of ugly technical charts, and even uglier (economic) fundamentals, the next big enemy is the very bad sentiment that every investor and trader have.

I attended an investor briefing lately, which was sponsored by Citibank, and their VP and Chief Economist has this (also) wonderful comment,

"Strengths are being downplayed and risks are being exaggerated."

CNBC, and other US media had already been saying the "R" word as early as the 3rd Quarter of 2007. Sometimes I think that these statements become self fulfilling prophecies. Like they say, a rumor stated a hundred times become fact. Since just about everyday, they were screaming recession, the US market has its blood dried up.

Onshore, the ouster of JDV has added to the specter of negative investor sentiment in the stock market. We were down by more than a percent, worse off than our Asian neighbors. Just what investors need right? What's more, this isn't the worst part yet. The worst part will come when JDV starts to open his mouth and accuse the current administration of this and that controversy.
2008 for the Chinese New Year marks the Year of the Earth Rat.

There certainly are a lot of rats out there in the field.

I previously wrote about a trading strategy called 3R. For this blog entry, there is a new 3R - Recession, Rumors and Rats. Rats!