130509 Asia Opening

Morning all,

To be brief, looking at leads over in US, jitteries to sustain this rally comes out with Greenspan talking about a bottoming in housing market, while crude smashed up to the $60/bbl mark. However, mixed signals continue to come out, with home prices in US fell most on record in 1Q, while dollar weakens against the major basket of currencies as stock drops on dilution concerns, not to note that the first budget deficit comes out from the white house.

This lead to what we see in the market for some sector rotation into defensives, that took dows back up greento 0.6%, while s&p got pulled from the lows back to finnish down -0.1%. Tech dragged the market to finish down -0.88%.

We saw drags from auto and banks as dilution continues to raise concern in the market, while GM is pretty much set note for a decline.

Looking ahead for today, I believe we will see similar rotation coming in, and defensive names will be favoured. Though oil stocks may be pulled up from last night's spike.

I remain to be a seller of financials, shorting names such as HSBC (5.hk), given that the overseas market tanked quite hard, and Standard Chartered. I would also be seller of the red financials, with a sell on CCB, ICBC and BOC. I would expect the insurance names such as Pingan and China Insurance to remain flat.

I would be a buyer of defensive names in Power play such as AGL Energy, HK & China Gas. I may consider a buyer of defensive staples, such as Woolsworth, Tsingtao and Wong Wong. With regards to telco plays, I am unsure with those names as mix plays have been coming about the last few session.

Considering last night's run in crude, I do expect some opening strength with OSH, AED, Origin and Santos in AU, and Cnooc and Sinopec in HK. Though I may question their strength throughout the day.

I remain favouring precious metal plays and would go long in silver or gold, though I prefer gold over silver, given silver already reached highs. Industrial metals play may rise today given that china Industrial Production figures comes out today, and as people went into the factory investment theme yesterday. I would favour Jingxi Copper and MRE.

Thats about it today.

Happy trading!

ongy out.