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Friday, January 29, 2010

Watch out below !!! S&P heading to 1000

Stock market up by more than 60% in a short amount of time. Investors are getting skittish about near-term. Corporate earnings have been so-so,  investors fear that China is going to slow down bank lending in order to cool off surging inflation and avoid a real estate bubble and U.S. President Barack Obama is poised to impose harsh regulations on US banks by limiting their size, profitability, and the sectors that they can conduct business in. These fears have already led to a limited short-term market drop. 

Breaking 1085.... my next target is 1000 !

 


 


Short Chinese market and buy $US !!!

The U.S. dollar breaking out above its 200-day moving average (200 DMA).  Considered to be a very positive technical indicator, assuming the move above the trendline continues.













Chinese stocks may be going in the other direction. In fact, the Shanghai Composite Index looks as though it will move below its 200 DMA.

 


















Chinese economy is doing very well by all accounts and Chinese stocks have done well too. It may be that they are taking a breather and this could be a long-term buying opportunity. Or, they may be topping out. Too early to tell at this point.



Tuesday, January 26, 2010

“Excess liquidity in the system is planting the seeds of surging inflation and asset bubbles,”

“Excess liquidity in the system is planting the seeds of surging inflation and asset bubbles,” Diwa Guinigundo, the Philippine central bank’s deputy governor, said in an interview in his office in Manila today. “More and more, China is realizing they have to moderate public spending, or else they will have the problem of high inflation later on.”

The central bank on Jan. 12 increased banks’ reserve requirements for the first time since June 2008 and has also guided bill yields higher at auctions this year.
China’s economy expanded a more-than-forecast 10.7 percent in the fourth quarter from a year earlier, the fastest pace in two years, adding to the case for policy makers to pare back stimulus measures.
Residential and commercial real-estate prices in 70 cities increased 7.8 percent from a year earlier in December, topping a 5.7 percent gain in November.
Values of some luxury units in Shanghai doubled last year, Lee Wee Liat, an analyst at Nomura International Hong Kong Ltd., said in an interview this month. He cited 100,000 yuan ($14,600) per square meter sales in December at Casa Lakeview, a project developed by Hong Kong billionaire Vincent Lo’sShui On Land Ltd.
China property sales also jumped 75.5 percent to 4.4 trillion yuan last year, led by the eastern cities of Zhejiang and Shanghai. The boom follows an unprecedented 9.59 trillion yuan of new loans being extended last year, flooding the economy with cash.

Friday, January 22, 2010

The Dow Industrial Average opened below my annual support at 10,379.



The daily chart for the Dow is now negative. My nearest support is the five-month modified moving average at 9,631. The downside risk continues given weekly closes below my annual pivot at 10,379. Keep in mind that my quarterly support is 6,705.

The yield on the 10-Year is below my semiannual pivot at 3.675 signaling risk aversion.
The daily chart for the 10-Year yield shows potential to the 50-day and 200-day simple moving averages at 3.56 and 3.45. This yield began the year testing monthly support at 3.868. Next week the Treasury yield curve faces $118 billion in supply, Tuesday, Wednesday and Thursday.
Gold and crude oil decline as the Euro weakens
Gold is below its 21-day and 50-day simple moving averages at $1117 and $1135 with the December 22nd low at $1075. The Gold Bubble has popped and a weekly close below my quarterly support at $1084.9 indicates risk to my annual support at $938.7.
Crude oil is below my annual support at $77.05, and a close today below the 200-week simple moving average at $76.13 indicates risk to quarterly support at $67.22. This would be a sign of a weaker than expected global economy.
The euro is trending below my quarterly pivot at 1.4327, which indicates risk to the 200-week simple moving average at 1.3848
Emerging Markets, China and Semiconductors provide downside warnings.
The Emerging Markets Index Fund (EEM) shifts to negative on its weekly chart given a close today below $41.18. A weekly close below my annual support at $39.81 indicates risk to quarterly supports at $25.01 and $22.82.
The China 25 Fund (FXI) is below its 200-day simple moving average at $40.11 for the first time since April 28. A weekly close below my annual support at $39.25 indicates risk to quarterly support at $19.75. Subscribers to the ValuEngine Weekly ETF report could have shorted FXI on strength to my higher annual resistance at $44.53 on January 6.
The Philadelphia Semiconductor Index (SOX) shifts to negative on its weekly chart on weekly closes below 344.50 this week and next. This would keep last week’s key reversal in tact. The downside risk for the SOX is to semiannual and annual supports at 271.90 and 259.45.

Richard Suttmeier
 

S&P 500 erased its gains for the year

The S&P 500 erased its gains for the year and US equities were on course for their worst week since October as investors recoiled on Friday from Barack Obama’s proposals to regulate large banks.
The bearish mood on Wall Street followed losses across global markets as investors feared other financial centres might emulate the US president’s proposals.
Uncertainty over the proposed US regulatory reform policy for large banks, and what shape it would take, was at the forefront of investors’ concerns.