Market Outlook (17/04/10) Goldman Concerns may trump Good Earnings Week!

In last week, STI gains 24 points from the opening of 2983 and close higher at 3007 to mark almost a white “Doji” candlestick in weekly chart to show the indecision of the rally ahead. The VOL in this week is LOW although getting higher compared with the previous weeks. Overall the market already has sign of weakness and may pullback any time from now.

Yesterday night, Goldman Sachs plunged 23.57, or 13%, to 160.70, marking the stock's biggest one-day dollar drop in its history, after the SEC filed charges against Goldman Sachs for failure to disclose vital information about a synthetic collateralized-debt obligation, or CDO, that hinged on the performance of securities backed by subprime residential mortgages and the fact that the hedge fund had taken a short position that bet against the CDO. Stocks fell but not dramatically as the Dow managed to close above 11,000 and the majority of the stock damage was centered on financials.

In the next coming week, Singapore will have another round of company earning report. However uncertainty surrounding Goldman Sachs will likely overshadow the positive news from dozens of major corporate earnings reports in the week ahead. Some analysts say the Goldman charges could be the event that will trigger a much anticipated stock market correction, and the magnitude of the decline will depend on how far the SEC investigation spreads and whether it also involves criminal charges.

Important resistance of STI: 3040

Immediate Support of STI: 3000

MY TACTIC: Hold your current portfolio and prepare to SELL once your counter has announced the earnings report AND NO FURTHER STRENGTH TO RALLY.