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Week ended 10th June, 2011 – Market this week .

Dow Jones, CAC and DAX were in their 6th straight weekly decline this week. Continuing weakness in US economy, never ending European debt problem and some signals that growth may reduce in some of the Asian countries are the major causes of these decline.
In one side reports from Europe were little bit mix this week as UK’s manufacturing output for April was weaker than expected, German export for April fell more than expected and Greece’s GDP grew less than expected in first quarter of 2011. On the other side retail sales in Euro-zone rose more than expected in April, German factory order rebounds. I think that increase in retail sales is better sign.
Australian central bank kept it’s rate unchanged this week at 4.75%, I think this was little bit expected considering the fact that in last week we saw one of the biggest quarterly fall in  GDP by 1.2% in first quarter of this year, and this week there was reduction in full time jobs, so there is less option for authorities. 
South Korea hiked its rate on Friday to control inflation, but many experts were surprised by this move as Korean inflation in may actually fell from it’s peak level of march 2011.
During the early days of this week Thailand’s index lost because Goldman Sachs lowered its rating on country’s stock. And in the last day of the week factory production slowed in India for April and China had $13.1 billion trade surplus in may which was less than expected.

Other markets

Oil price rose in Thursday , after OPEC members failed to reach an agreement to increase Oil production to bring price down. But Oil dropped in later part of the week on a news that Saudi will increase Oil production on the concern of global economic recovery which is slowing. Oil (Nymex) is not showing any encouraging move but Brent Crude is better, as it is heading to test $124 level and right now it is finding some resistance at $120 level. Natural Gas’s move was better this week except Thursday’s move. Now form here if Natural Gas corrects then the level need to be watched is $45 and $42.
Silver is not showing any encouraging move. Last day I told that for any renewed move it needs to break $39 level. But it looks to me that it will be testing its lower support levels, may be around $34 level.
Gold is also not showing any better performance. Its last day move was not good. In coming days it may be looking for support around $1520 level and then around $1480 level. Previously Gold negates it’s bearish pattern so I would be looking for its  new formation.
Like precious metals Copper is also not showing any major movement and the trend is negative.

Coming week

As I was suspecting in past week that there is no good thing for which DOW will rise from this level. Last day’s close was really bad, also there was support of volume. Look as I told if there in coming days, DOW does not get any good news then it will be falling to test  the level of 11600. And also DOW has formed a  bearish pattern and that pattern is working quite well as I mentioned in NO.1 in the chart. If this pattern works completely then Dow has a danger of forming another bearish pattern ( No. 2 in the picture ), though it is in very early stage to predict anything but there is a danger of more.

Shanghai is still holding above its support level of 2600. It looks to me that Shanghai Composite is in crucial point now if it get some bad news from here then it can trigger the bearish pattern which it is forming or may be already formed. Early days of this week it did some positive steps but in later period of this week it lost those gains. But if it gets some good news then it has the scope to go up to the level of 3050.
Last day I said that DAX  will give us some time to implement its pattern now this week it again tried to get out of this pattern but it could not. As I said in last day that its support is at 6700 and if it breaks 6500 then it will completely change the long-term trend.
It looks to me that KOSPI  is going to touch 2035 level in coming days and if things remain bad it may drops more and can re-test its low of march 2011. Indicators are saying that it can correct more but not much, where as chart patter shows a little different pictures. Right now its bearish pattern is more prominent than the bullish pattern. After rate hike this week we can expect little more corrections.

BOVESPA has not corrected much this week as such it is finding support far above its stronger support level of 61000. In coming week it will be clear whether BOVESPA is making lower high and lower low pattern, as I discussed last week. But as momentum in the whole world is bad I am expecting some correction on it. But sometimes things can be different as it happened this week in Russia, which has gained nearly 4%.

Reports due in coming days

Tuesday, 14th June – Small Business Sentiment,  Producer Price Index, Retail Sales.

Wednesday, 15th June – Consumer Price Index, Industrial Production, Housing Market Index.

Thursday, 16th June – Unemployment Claims, Housing Starts, Phil. Manufacturing Index.

Friday, 17th June – Consumer Sentiment

If QE-3 is not coming then all the stock indexes especially US stock index must be preparing for a big correction. What I think that some moneys must be shifting from stock market into Treasury market for keeping up the momentum. Last year during bad phases of financial market there were QE-2 money, which helped market especially stock market to recover. But in coming future when there will not be any QE-3 or whatever it is, who is going to save the stock market. I do not have the answer yet ?

NOTE :  Please see the disclaimer below this blog.

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