There is a well know pattern that when US market sell-off, and Asians have not done it yet, then the Asian markets will sell at the following session. Some traders swear by this as one of their secret weapons.

Well, today they were right once more. As of the time of this writing, the Nikkei is down nearly 500 points. The Hang Seng is down over 6%. Singapore is the least of the trashed, minus 3%.

Every sell-off serves as a magnifier of bad news. Note that some people think that the bad news is the cause of a sell-off, and journalists often make this mistake in their reporting. But it is a false belief.

There is nothing that trigger this except for momentum. When the markets are in a sell-off mood, they continue in their sell-off and do so in unison until there are
no more anxious sellers or there are smart buyers entering the market and are ready to bid it up.

It is supply and demand that rules.

But if you believe in bad news as a reason for sell-offs, here are some for you:

1. A lousy industrial output report out of China, confirming the various informal indicators of economic weakening there we have tallied

2. Paulson's opening his mouth to say what everyone knew he would do, which is to do with the bailout money something other than what was written/planned in the bailout. Apparently he stated something like "let's bailout credit card debt so the banks can let consumers get themselves in even further over their heads."

The next time Wall street is up, you can do the other trade. But Asian market the next session, which is our evening.

If you want to play Asian market, there is a futures index that is good for that. It is the Taiwan futures index. It trends, is liquid, and does well. It trades on the Singapore stock exchange. Ask your broker, or email us and we will provide you with the broker with whom we trade.

Note: You will need to trade it in a futures account.


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