Master Rider Blog

Big Picture

August 22nd, 2007 NW Teong

I noted that the US 10-year treasury’s yield continue to fall and closed at 4.59% yesterday (please also read my blog of “Ignore This @Your Own Risk” on 17 Aug 07). This means that funds continue to shift from risky assets to relatively safe assets, i.e. flight to safety. Readers should be aware that when more people buy the treasury, the yield will fall (and the price will rise). Under current scenario, I guess many fund managers are very fearful of further carnage in the sub-prime markets, and by extension, all other bonds. At this juncture, the safest one is of course the treasury bills / bonds which are guaranteed by the US government.

This basically tells me two things: one is that market will still be jittery and hence volatile as funds continue to flight to safety, second 10-year treasury as a good proxy will indicate that Fed may have to lower the Fed rates sooner than later.  

At any one time, there always exist positive and negative forces. Sometimes, the two opposing forces are quite even, that is when we are not sure which direction the market will move and most people are quite confuse. However, sometimes, one force clearly dominates the other and hence we are very clear that market is bull or bear. Mind you, there are so many factors that form the positive and negative forces. This makes the forecasting of economy and stock market direction very challenging!

At this juncture, I personally feel that the more we should use the FVT technique (explained in my e-book, please visit: www.master-rider.com) to do investments. Again, readers are reminded that this quarter (3^rd quarter) is always more volatile than the other quarter and I have said this before in my earlier blog. Hopefully, it is both peaceful and calm on the anniversary of 911, Black Monday (19 Oct), etc. Things should be very much clearer by end of October.

Grasp “The Essence of Stock Investment” and “Master Your Own Destiny”!

Cheers!

Entry Filed under: Macro, Stocks