First of all, naturally volumes will be low as the Thanksgiving holiday hits the US. Whether this will reflect itself in a general slide as European markets generally have been bought into the US openings lately remains to be seen, but would be a funny indication of the sad state of things if the markets fall simply because there are no open markets in the US to cheer things up.
In Asia, all eyes will probably be on the developments running into the Japanese election. My guess is that Noda needs to make some serious moves this week to get popular approval and have any chance of snatching victory from the jaws of defeat. Given that there are a lot of “fraction” parties composed of defectors from the DPJ/LDP parties, there is speculation that there is a possibility of a “third political force” emerging, most likely on the centre-right. Whatever that means… Most of them are very likely to be few-issue parties as well, so it will be interesting to see the bargaining game progress after the week is over. This week would be extremely useful for seeing any indications of that and I also expect to see initial poll numbers trickling in and moving the Japanese market significantly, especially since the morning guidance from the US will be dimmed throughout the week.
For Hong Kong I will keep looking out for… guess it… a break below 20 960. The VHSI keeps pinging between its monthly and quarterly moving averages, with the ADX/DMI just losing all trend indication as a result. Can we expect a push back up to 20 in the near term and see the quarterly band beeing a technical indicator for a stronger fall coupled with a sub-20 960 close?
The TAIEX is also plummeting, but will likely see fairly strong support around the 7 000 level in the coming week to go with the general post-Taiwese-election trading channel between there and 8 000. Still, the market action at the margin will be interesting to note, very similarly to the Hong Kong market.
