US market a dip or a start of the double dip?...

This is a very emotionally challenging moment...with the US Dow Jones index plunging close to 4.5% while the Nasdaq closes down >5%... S&P wiped out more than 1.28tri dollars in value... so just when the majority of the public felt the slightest tinge of relieve that the US manage to avoid a default, the stock market is being shorted on the ground that the US economy outlook is growing negative.... the continuous fear of Euro crisis...plus the impending job reports tomorrow...

So what is real message here? Is the economy really in trouble? or perhaps US re-entering another recession?

My opinion is this... Today's fall is merely caused "categorically valid" fear by hedge funds heading the pack to reduce risk exposure to the equity market and perhaps repositioning their portfolio for the next 2-3 quarters...

So is the spectre of QE3 getting stronger with today's selloff in equity? Yes, just look at the VIX.

As a matter of fact, QE3 looks almost certain should the job reports re-affirm investors' fear on the streets...US dollar value will continue to slide 3-6 months down the road. While the dollar will suffer because of the perception of a likely introduction of QE3, the impact to the equity market may not be a big as some may expect if it happens... What happen to day is people are hoarding cash instead of investing... people are held back by their fears to invest for the future and all the negative data released of late certainly reaffirm that.

Anyway, rule of thumb in investing is to keep some cash at least 30% of your total investment capital have to be in cash for opportunity like this... Main sectors that investors should take advantage of is the technology sector in my opinion. Tech will fare well as compared to the rest.

I personally don't believe this is the beginning of a "double dip"... but merely a short pullback in the stock market.... Keep a cool head and think rationally. Don't let the crowd fool you.

Like I mentioned in my earlier posting, stay hungry(look out for opportunity) and stay foolish(discard the herd mentality). Asia market will not be spared of the selloff but it will only be a short dip not and am not going to change my outlook on the equity market for the next 6 to 9 months from now...