GM

Price is near influential level of support. $29 level has propped up the price in the past and today's 4.83% gain is suggesting that this may happen again. The bulls may prevent a drop below the nearby support and might push the stock back toward the ascending trendline. Be ready to change their outlook on the stock in the event that the price slips below $29.

Market today

The worst of the credit-marketdebacle may be over and stocks will likely rise as the globaleconomy expands. Quite evident for the fact that the Fed lowered interest rate earlier this month to contain the sub-prime crisis.

Market should rally into positive territory today. Watch out!

Hidden Gem

Revolutionary HeartOne monitor from Cardiac Network (CNWI) is a hand-held digital, telephonic device that tells instantly whether you are having a heart attack or just harmless chest pains.

Cardiac Network also has a patient-friendly recording monitor called the 2005A. The patient wears the 2005A which captures and retains pre-event heart data as well as an actual heart attack. This sophisticated device makes it easy for the higher-risk patient to transmit the life-saving data the doctor needs.

Because both of these heart monitors are AMA and FDA approved, the cost to the patient is completely covered by Medicare and other major heath insurers.

Both of Cardiac Network's heart monitors will save many thousands of lives, perhaps as many as 250,000 each year in the U.S. alone.

With its user-friendly digital designs, Cardiac Network will save millions of lives.

HSI

Dark cloud formation. Asian markets expect to be whacked tommorrow. Take care.

Singapore

Singapore banks may be in focus on Tuesday after market leader DBS said it will provide liquidity to an asset-backed commercial paper after investors withdrew support due to credit market conditions. U.S. stocksfell on Monday after data showed the number of unsold homes reached its highest level in more than 15 years in July, adding to concerns about the housing market and consumer spending.

Sub Prime Jokes

Stock Outlook #8: Google

Stock is testing support level. Price is nearing an ascending line which has propped up since IPO in late 2004. News on incorporating ads into YouTube should see the price ending higher. Interesting risk/reward ratio.

Headache?

Expect sustained sluggish U.S growth. The Fed should be able to prevent the squeeze from being a crunch. Impact on Asia should be limited by its ability to redirect & take share in exports, strong momentum, liquidity boom & potential political stimulus. Earnings expect to remain positive going forward. No worries.

Possible Option Trade on Radar

Allergan, Inc. (AGN)

AGN has remained faithful to the 200 day moving average and bounced Friday. Implied volatility remains high and may provide the opportunity to sell options to take advantage of the high volatility. Consider selling some short term naked puts or a bullish put spread depending on market behavior early next week.

Market Meltdown...Going Forward

If you have been following the news, you should know that the stock market has tumbled recently. So is the market going to move up or continue to move down? I don't know. Who knows? Usually one can apply TA and make a forecast on the trend, however, when meltdown such as those we witness recently happens, TA & FA are no longer accurate.

But what I know is that the institutional investors are moving out of the market now. Themarket is really a manipulated market. Forget about whether the US subprime problem is really serious. What's more important is these institutional investors think it is serious. If more and more institutional investors move out of the market, stock prices will continue to fall.
This is a good lesson for all of us because we've seen again that the market is manipulated. At this point, no one talk about the fundamentals. No one talk about the prospects of a company. The market simply goes where the BIG money goes, as always, and the big money is controlled by the institutional investors.

Another important note is the government's interference. The government is another body that has the BIG money. So the government has the power to move the market too. We see that US, Europe and some Asia governments are pumping money into the system, hoping to soften the impact, keep the institutional investors in the market and attract those who have left the market to come back. Whether they can be successful in doing that depends on whether they have enough $$$ to pump in.

I doubt this meltdown will last as the governments are quite rich and think they will win the race. But only time can tell. Hence, for now, I suggest staying on the sideline until a clearer picture forms.

Opportunity to buy

The overnight fall in US indices will very likely be seen as a bearish sign by the market place. After all, the DOW broke below a previous low and as some analysts have seen it , a head & shoulder breakdown.

There are signs which point to an imminent reversal. For the Singapore bourse, STI will on a worst case, drop towards 3260-3270. However, a more likely downside will be closer to 3300-3320. Bottoming out process more likely in the near term. Subsequently, we could see a rebound towards 3470- 3500.

Market this week

The problems in the mortgage and corporate lending sectors continued to be the primary driver of market sentiment last week. Thursday's announcement that BNP Paribas (one of Europe's largest banks) was suspending the operations of three hedge funds, all of which are invested in the U.S. subprime market, caused many investors to fear that the problem is getting more wide spread than originally anticipated. As you can see from the charts below, volatility levels remain high and we believe this may cause the markets to continue trading in a choppy manner until investors get a better idea of how the credit problems will affect the longer-term direction.

TA: Ascending Triangle

After a rally in early March'07, the stock was resisted at $1.32 a couple of times. While any upward movement was capped by the resistance at $1.32, it was observed that every pull-back registered a higher low. This unique movement formed a chart formation popularly known as an Ascending Triangle.