I don’t think it is necessary to talk about US debt limit because we are going to see it in coming days. This week Moody’s cut Greece’s credit rating and Spain faced a possible downgrade from it, but situations are not same all places as Japan is showing some better performance but world economical problem is effecting South Korea as their growth slowed in the 2nd quarter and Australia is suffering by inflation.
Brent Crude (Sep)
Natural Gas (Sep)
This week Nymex Oil tried to test level above $100 but it failed to carry, this is quite understandable considering the world economical situation. As I said in last week that if it breaks $95 level then it can drop more, now it is time to see that whether it re-test $90 level or not. On the upside it has resistance at $100 level. This week Natural Gas broke one of it’s crucial support of $4.20 level, it has a chance to fall more from this level. On the upside it has a resistance at $4.40 level.
As situations are becoming worse, more investors are taking shelter under Gold, if this situation continues it may rise more. Though Silver is trying to go in higher levels but it fails as Gold is stealing the show.
I don’t know what will be the outcome after 2nd August, but it is sure it may create opportunities for investors. As I said in last week that though some indicators are showing that DOW can go to test 13000 level but economic scenarios do not permit that, this week DOW did exactly the same thing. But last day’s close was little better. Since coming week is very important for world financial market, it will be wrong to predict anything.
This week DAX was testing 7000 level in the downside. It’s pattern which I talked about is now prominent and I will be looking how it does in future.
Reports due in coming days
Tuesday, 2nd August, 2011 – Auto Sales, Consumer Income & Spending.Wednesday, 3rd August, 2011 – ADB Job Report, Factory Orders, ISM Non Mfg. Index.
Thursday, 4th August, 2011 – Unemployment Claim
Friday, 5th August, 2011 – Employment Report for July.
Sometime a question comes in my mind that whether markets are going to be ok, if some good news come from US ? I don’t think that any good news about debt limit can effect the market for long to medium time, yes it is sure it is going to effect for short-term. Most of the markets are in over-bought position so investor need to be cautious in this stage irrespective of the news from US.
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