The Thailand SET closed at 1613.63, up 2.05% for the week despite the unfolding Greek debt drama. One should be aware that the put-call option ratio for the SET50 index, consisting mostly of large-cap companies, printed at over 1.3 on Friday. In the derivative markets, a put-call ratio over 1.0 means investor sentiment is bearish.

A piece of good news for the week was the annoucement by the Bank of Thailand (BOT) on Thursday that Thailand's economy is still expected to grow 4% this year. The statement came with a bit of caution though, as the BOT also said they didn’t rule out a rate cut if economic activity doesn't pan out as expected. Investors may want to first figure out what the BOT’s statement really means before taking more positions in the SET. 

The Bureau of Labor Statistics – U.S. Department of Labor said on Friday that employers added 257,000 jobs in January, beating the economists’ forecast for 235,000 job gains. The labor force participation rate rose to 62.9%, from 58.8% a year ago, while the average hourly earnings growth rate is now 2.2% year-over-year. That was good news. 

Here is some bad news. The 10-year U.S. Treasury yield surged 8.96% to close at 1.95% on Friday. The U.S. Treasury yield curve flattened as Wall Street increased its bets that the Fed could bump up its rate hike timetable to between June and September. The hedge funds sold gold, the euro and yen and bought U.S. dollars in anticipation of a strong U.S. economy and more monetary easing ahead from the central banks around the world. We hope that Thailand’s economy will be ready for a rate hike by then.

More bad news came from Standard & Poor’s, which cut its credit rating on Greece from B to B- on Friday and warned that a further downgrade is possible. The news sent the U.S. equity markets tumbling across the board. After the U.S. markets closed on Friday, Moody's came out and put the Greece government bond ratings on review for downgrades. This might have some impact on the Asian markets on Monday.

Here was how the Greece debt drama started. On Tuesday, the 5-day old Greece government proposed ending their standoff with its international creditors by swapping its outstanding debt for new growth-linked bonds. As far as we understand, growth-linked bonds are bonds which will have their yields tied to the Greece GDP, which was about 0.6% in 2014. 

The newly appointed Greece Finance Minister, Yanis Varoufakis, met with the European Central Bank (ECB) on Wednesday to discuss his debt swap plan, but got a cool reception from both the ECB and the Germans. The ECB told Mr. Yanis Varoufakis that the Greek banks can no longer use the country’s sovereign debt as collateral for ECB-provided liquidity, meaning Greece may be “weeks” away from running out of money unless its government strikes a deal with the ECB.

People who are not familiar with Greece’s drama should know that Mr. Yanis Varoufakis was gearing up last week for a clash with the troika of the European Commission, the IMF and the ECB over the bailout agreements, as his government wants the troika to write-off 315 billion euros of foreign debt. Since Monday, he has changed his attitude, which is a “good” thing, but it might be a little bit too late.

In the SET chart pattern, a Hanging Man candlestick just emerged. The Hanging Man pattern is not a signal, but a warning of a potential reversal downward. For the next several trading days, one should pay close attention to these bearish trend reversal patterns, so manage risks accordingly.

If one decides to chase after the SET performance, there are two major technical resistances at 1625 and 1650.