Friday, March 11, 2011

Wall Street Falls Again

Dear fellow traders,

On Thursday, 10 March 2011, The Market Big 3, namely, the Dow Jones Industrial Average, the S&P 500 Index and the NASDAQ Composite Index suffered another big drop due to several negative news which might hit the US economy further.

On Thursday, 10 March 2011, the Labor Department announced that the number of people seeking unemployment benefits rose last week. Applications increased by 26,000 to a seasonally adjusted 397,000 during the week ended 5 March 2011.

The US government incurred the largest-ever budget deficit of $222.5 billion for the single month in February 2011. This eclipsed last February's record by nearly $2 billion. This ensures 2011's annual deficit to end as the biggest in U.S. history. The full-year deficit would exceed 2009's record deficit of $1.41 trillion.

The widening deficit is due to the impact of the tax-cut package that US President Barack Obama and congressional Republicans introduced in Dec, 2010.

Also, Oil prices have hovered around US$103 a barrel on Friday, 11 March 2011, in Asia as traders now worried that the protests in Saudi Arabia could escalate and might disrupt production in the world's largest crude exporter.

As of this writing, the Asian share markets extended their losses on Friday, 11 March 2011, following the Dow Jones Industrial Average's biggest one-day drop since August 2010. China has also reported that the country is experiencing high inflation, announcing that its February 2011 inflation remained elevated at 4.9%.

On Thursday, 10 March 2011, The Dow shed -228.48 points, or 1.87%, to 11,984.61; The S&P 500 dropped -24.91 points, or 1.89%, to 1,295.11 and the NASDAQ fell -50.7 points, or 1.84%, to 2,701.02. All 3 indexes have currently breached the 30 Day Moving Average once again.

I'm watching the stop loss level of my few bullish positions tightly. Seemed like the market bloodshed might continue on Friday, 11 March 2011.

Yours Truly,

Tony Chai


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