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Stock & Metal market reviews after 26th August, 2011.



Some are saying that Bernanke put the ball in the court of politicians but as I wrote in my previous topics that looking in recent scenarios I don’t think there will be major changes for US if QE-3 doesn’t appear soon. Because there are many other ingredients to keep up the liquidity in the system. Beside Bernanke’s speech major attraction of the week was Moody’s cut of Japan’s sovereign rating.


INDEX
26th-August-2011
8/19/2011-8/26/2011
8/12/2011-8/19/2011




DOW
11284
4.31%
-4.01%
FTSE
5129
1.76%
-5.26%
CAC
3087
2.35%
-6.13%
DAX
5537
1.04%
-8.62%
NIKKEI
8797
0.89%
-2.72%
HANG SENG
19582
0.94%
-1.12%
AUS
4200
2.41%
-1.70%
SHANGHAI
2612
3.07%
-2.27%
SENSEX
15848
-1.81%
-4.14%
BOVESPA
53350
1.72%
-1.91%
RUSSIA
5746
0.24%
-1.76%
INDONESIA
3841
-0.02%
-1.23%
KOSPI
1778
1.94%
-2.73%
STRAITS
2748
0.54%
-4.10%
THAI
1037
-2.99%
0.65%
ARGENTINA
2883
2.05%
-4.75%
S. AFRICA
29601
0.00%
-0.75%


Different investment banks are cutting global growth target, I don’t believe them much but look like they are true to some extent as GDP growth rate of US and UK was not good as it was expected. Euro-zone manufacturing PMI, German investor confidence, German business climate, Chinese PMI and Thailand’s economic growth dropped. Where as inflation is still rising especially in developing countries like Vietnam, where as CPI in Japan rose this week, now authorities in Japan may be in confusion whether to cheer or be depressed with this rise.



Metal Market

Like stock market, Crude market showed same kind of movements this week. In this moment any better news can increase it’s price but it has a chance to drop more if things go this way. Natural Gas was very flat this week, it’s resistance in $4.1 level and support at $3.9 level is still intact.
At last Gold faced some corrections and it was long due. But if again bad news starts to come then investors will again take shelter in Gold. Sometime I think about the short positions those have been created on the higher levels. Somewhere I was reading that there was a increase in cost of dealing in Gold, if it is true then that is going to effect the market. Silver’s up move was expected but it did less, it may again try to test $44 level in coming days. Silver’s support at $39 area is still intact. There was some better news from China about Copper but in spite of that it showed less reactions.


Coming week


Still stock indexes are not showing much of the relief rally and in the last day things were not good in Asian countries. I don’t think stock markets have some good reason to rise from here because of Bernanke’s speech. Things may become very challenging in coming days.
DAX got good support at 5400, basically this week it was flat. As I said in last week if it breaks 5400, then 5200 will be the next support and on the upside it has initial resistance around 6000 level.
For Dow Jones it’s initial support is at 10800 and if it breaks that then it has support around 10400 level, on the upside it has resistance at 11800 level. Dow’s move this week looks to me that it tried to fill the gap it created in last week.
For Shanghai Composite at around 2500 level it has a strong support, now some how if it able to break that then it will get support  at 2400 level. Now any development can bring it to test 2700 level.
For KLSE 1440 level is a strong support level but figures indicate that it may drop more and in the upside 1480 is it’s initial resistance.



Reports due in coming days


Monday, 29th August, 2011 – Consumer Income & Spending, Pending home Sales.

Tuesday, 30th August, 2011 – Home Price Index, Consumer Confidence.

Wednesday, 31st August, 2011 – ADP job Report, Factory Orders, Chicago PMI.
Thursday, 1st September, 2011 – Unemployment Claims, Productivity, ISM mfg. Index, Construction Spending.
Friday, 2nd September,2011 – BLS Employment Report


There may come some problems regarding Greece’s collateral and private participation in Bond swap in coming week. As I said in weekly review of 12th August,2011 that I saw a dream about the punishment of S&P officials, this week their president’s stepping down made my dream true. But things will be not good if other dreams become true like this.
This week I was looking some investment bank’s prediction about QE-3, they said that $1 trillion or equivalent asset purchase may increase GDP growth rate by 0.5%. I don’t want to go to the conclusion about QE-3 but it is sure that it will not be good for major stock exchanges around the world and especially for Emerging nations, who will suffer more by inflation due to asset price rise as it happened in past. Later I want to cover this matter in a separate issue. I don’t know much about the Hurricane that hits the world financial market, when it will stop!   But when I was trading I find that there were not much buying even in this level, this is quite different and not looks good to me.


NOTE :  Please see the disclaimer of this blog .



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