The reporting season is in full swing now, and the market's direction will hinge on blue chips' results.

The Japanese market is closed today, so there are few reasons to prompt investors to either sell or buy. Besides some investors are still in a holiday mood.

The big loss at the last day of trading in 2005 was a bit unjustified. The selling was a bit overdone, so today most of the gains were due to bargain-hunting.

H-share valuations are quite expensive and heavy profit taking will continue ahead of earnings announcements. Smart investors have already reduced their holdings in these stocks.

Privacy is, and always will be, a big issue.

Near term direction will be determined by flows from Mutual Funds and corporate results. I expect stock specific activity to continue. Use declines to buy this market as we are in a structural bull run.