SET 1014.13 (-9.73) (23/6/2011)

Elliot's third wave is coming and what we had hoped to be a stone castle turns out to be a sand castle that's about to be washed away. SET closed near the day's low and it doesn't look good tomorrow. I know I say that it doesn't look good just about everyday, but tomorrow is extra ugly. If you saw the European and US markets, then you already know. Virtually all markets in Europe declined by about 2% today, with some of the worst going down to almost 3%. The US is down about 1.5% right now.

The International Energy Agency (IEA) are going to release 60 million barrels of crude oil to make up for the decline in production from Libya. That sent oil down 4 to 5%, which sent metals and agricultural commodities down also. Looks like Saudi Arabia got what it wanted. So crude oil is going to drop further due to the European debt worries also. The question is whether or not IEA's decision is a good one. In the short term, it's definitely bad for stocks (as if it wasn't bad already). But in the intermediate to long-run, it might help with inflation and high food prices. While IEA believes that it is making up for the possible supply shortage, I hear that supply was too much to begin with already and this makes it even more oversupplied. Actually, I should say that demand had weakened already and increasing supply will just push prices down much lower as we have witnessed today.

For this Friday, well, it doesn't look too bright. I have a feeling that SET is likely to have a more than 1% drop, meaning that it's likely to test the 1000 zone. Then next week, we'll see what the Greek parliament will do. I think they're going to pass the budget cuts though. I mean, do they really want to be held responsible for a default that would potentially lead to the collapse of the EU? I don't think so. It's already hard enough for them to look at the leaders of other countries. To let Greece default would be an extremely unpopular move on a global level. The Greeks are in trouble anyway. There's no way around it. Either way, the people of Greece are going to suffer regardless of whether or not parliament passes the budget cuts.

Good luck strangers!