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Week ended 17th June, 2011 – Market this week .

Most of the stock indexes were down on concern of Greek debt problem. HANG SENG & THAI index were down for 5th straight sessions. Inflation fell for May in Euro-Area but what created a problem in Euro-zone are the rating downgrades. First S&P downgraded Greece’s credit rating into a lowest one in the world, later it downgraded 4 Greece banks. In other parts Moody’s warned that there is a possibility of downgrade of 3 French banks because of their exposure to Greek debt.

Chinese export grew less in May and it gave less new loan than expected. Where S&P downgraded it’s outlook in Chinese property market, I don’t think Chinese government has much options. On the other hand Chinese industrial production and retail sales were up. Though China has increased it’s reserve requirement for 6th time this year but it’s CPI  came in line with the expectation. Market cheered with this data.
In Asia demand for riskier assets boosted when Bank of Japan launch a $6.23 billion program for corporate sector. Like China India is also suffering from inflation, as it’s May inflation rose so this week India again hiked it’s Repo rate for 10th time since 2010 to control this inflation. Moody’s upgraded Philippines credit rating, many are expecting this as the progress made by one of the fast growing nation.
UK’s inflation was steady but it’s retail sales for may fell. On one side it’s unemployment figure for the 1st quarter fell, where as it’s job seekers allowance rose in May which is more than expectation.

Other Markets


Nymex  (July)
Brent Crude (July)
Natural Gas  (July)
Gold (July)
Silver (July)
Copper (July)

Brent crude got some good resistance at $120 and it fell this week and broke one good support of $114 and in coming days it may be testing $108 support level. The range for Brent will be $108-$120. On the other side Nymex fell more than Brent, now it is two consecutive negative weeks for Nymex. Last week I was expecting some correction in Natural Gas as it broke $45 support level and in coming days it may be testing for $42 level in the lower side. But since it saw couple of negative closes this week so in coming days it may rise a bit from here.
For Silver I have still maintained that $39 resistance level, unless it breaks that, I do not expect any big run. On the low side if it breaks $35 then it will be testing $33 level. Like Silver Gold is also not showing any good pattern, it maintained it $1520 support level and on the up side $1550 resistance level. Both Gold and Silver and even Copper are not showing any directional moves, look like all are waiting for something !

Coming week

This week there were not much movements in Dow Jones, but it touched a lower point than past week. If I forget the problems in US now, then some better news from Europe may help DOW to test 12200 level and then 12400. The pattern which I talked in last week is still on for DOW. Last day’s move with volume is encouraging for anyone. With exception of some days, DOW is falling since the beginning of May, so some short-term rises are expected.

For Shanghai Composite as I told in last week that it’s bearish pattern is almost complete, and this week it made lows but volumes were not much, which can indicate a panic or imminent crash. What looks to me that better news can make it to test the 2800 level. Shanghai Composite’s 2700 level is very crucial for it, during few days it is just moving around this level. It is just looking for direction from here. But as I said if some good news start to come then all these can change in a moment.
DAX is trying hard to come out from the bearish pattern, last day’s move was better. Now it is showing side based movements. But since situations in EU area are improving , so we can expect some rise from it.

I was right, BOVESPA is making lower highs and lower lows. 61000 is acting as a strong support level for it and if it breaks that then it will be testing 60000 level. If situations improve then it can go to test 65000 level, but that pattern negates that move, so it may be testing levels below that.

Reports due in coming days

Tuesday, 21 June,2011 – Existing Home Sales, Fed’s  FOMC meeting.

Wednesday, 22 June.2011 – FOMC announcement, Press conference of Bernanke.

Thursday,23 June,2011 – Unemployment Claims, New Home Sales.

Friday,24th June,2011 – Durable Goods Order, 1st Quarter GDP.

Many news headlines are showing that Greece problems are going to be solved to some extent in coming days, now this can be a very good news for stock market. Last day’s close of some European and US stock indexes proved that. If this momentum goes on then we can expect some positive days for coming week. But for real good, the base of the construction need to be well.

NOTE :  Please see the disclaimer below this blog.

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