Skip to main content

Week ended 12th August, 2011 – Markets this week.

“Don’t help the problematic Euro-nations, mind your own business” – that was the un-official bottom line of this week’s big fall in French banking stocks. Though later in the week French economic growth report has supported that line. I am not saying that rating agencies were giving threats by selling those shares but definitely some one is there behind the window. The panic were so much that some countries like France, Spain, Italy, Belgium banned short selling to stabilize the market.



It is no meaning to discuss when these European banks invested in those problematic countries ?  Why someone has selected these time to threat about their investments ?  Perhaps many of us have some of these answers,  is not it ?

China is enjoying their trade surplus but rising inflation is still a threat for them, like other Emerging nations. Factory data in UK, Germane export data as well as Australian unemployment data are not good at all, though investors can get little relief from UK construction data and US retail sales report.

Metal Market

As stock market faced corrections, Nymex Oil also faced some heat but as I said in last week the heat was not so much. Though it bounce back from $76 level but I don’t like last day’s close. What I think that in coming week it may follow stock market. Natural Gas got good support around $3.90 level and unless it break $4.20 level, I am not very bullish about it.


Nymex  (Sep)
Brent Crude (Sep)
Natural Gas  (Sep)
Gold (Aug)
Silver (Aug)
Copper (Aug)

Gold is still running but I will not be astonished if it come back to test $1660-$1680 level. Silver got the support which I have indicated in last week. This time Silver movement is not satisfactory, it couldn’t able to break $39 level convincingly which I told in past. Last day I told about Copper’s support at $4.050, this week it just broke those headed much lower position. Unless economic scenarios change, I don’t expect much from it.

Coming week

Economic reports are not much encouraging, inflation positions are not improving and also no good news from European debt problem, as additional bail-out plan of Greece has already been questioned by many. Some of the indexes have dropped much in this round, but I did not see much of bounce back. I don’t know may be it will be due in initial days of coming week. I cannot see enough good news for markets to go much higher from this level, though some of these indexes are technically in short-term over-sold condition. Good approach may be quick get in & quick get out, if you have any doubts and better for them who has already invested in this week.

Dow got the support around 10800 level, which I said in past week. It’s bounce back was not good, I expected more may be around 11800 level. Now if it drops from here it will find support around 10400 level and finally the big support is at 10000, on the upside 11800 is the level, where it can get resistance.
DAX got support around 5800 level, though it made lows below 5600. Now 6200 level is good resistance for DAX. On the downside it has a support around 5400 level. DAX has corrected much during this round, but I have already told during few weeks that it has build the bearish pattern and it can go for it at any moment.
BOVESPA got support around 48500 level, it dropped much in these days. If it able to break 53000-54000 level in the upside then it will find resistance around 58000. On the downside if it breaks 48000 level then it can drop much, it next good support is at 42000 level.
Shanghai Composite dropped but it was very less compare to other leading indexes. It has a good resistance around 2700 level and support is around 2400 level.  KLSE has a support around 1440 level and resistance around 1500 level.

Reports due in coming days

Monday, 15th August, 2011 – Housing Market Index

Tuesday, 16th August, 2011 – Housing Starts, Industrial Production.

Wednesday, 17th August, 2911 – Producer Price Index

Thursday, 18th August, 2011 – Unemployment Claim, Consumer Price Index, Existing Home Sales.

One thing worried me that somewhere I saw Bank of America may be selling part of their stake in China Construction bank to build-up their Tier-1 capital and for other reasons, now what can be the effect of these if many institutions try to do the same thing in other Emerging Nations, especially in this moment !

Yesterday I saw a dream, that is divided on some part –

1)     Some officials from S&P has been suffering punishment for calculating wrongly.
2)     Many rating agencies have started to give new ratings to US.
3)     AAA rating has been evaporated from the financial world, now AA+  rating is the highest rating.

Can 3rd one be possible ?  May be in future or may be the process has already started !

NOTE :  Please see the disclaimer below this blog .


Popular posts from this blog

DAX forecast for coming week ended 15th March, 2013.

This week was very good for Dax, though it is getting resistance at 8100 range. Now it has a chance to test downside again. I think even if Dax tests lower levels, it has more chance to bounce back from around 7800 range and therefore it will again test upside.

On the other hand if it shows flat movements around 8000 range in initial days of the coming week then there is a chance that it may take a decisive call in later days. Considering the recent trends it has the chance to test higher levels may be around 8200 but that will be a very aggressive call after taking in to account the movement from last December. I will worry about the downside when Dax will be testing levels below 7600 ranges.
NOTE: Please see the disclaimer of this blog.

Fed’s rate hike Vs Sovereign rating up gradation

Financial market is very much worried about the rate hike in US, probably this is going to come in coming December. But I think that is not going to change much of the things. Even Fed hikes rate in December it will be not so much, because we are forgetting one thing that interest rate in US is around zero so even they hike rate by 0.25-50% basis points (at most) in this year that will not be enough cause for Dollars to change their locations around the world especially markets have already discounted this coming rate hike in US.

A new disaster is coming in EU banking sector, whom to blame, big Audit firms!

First I was thinking what should be the title of this posting? Will it be good if I write that big audit firms set the time for EU bank collapse! If someone is thinking that financial crisis is over then think twice because the coming EU banking crisis is no way less than 2008 financial crisis. The time bomb will explode at some point of time in future, the time has not yet set for it. In that tsunami, forget about the smaller if any major banks collapse then I will not be surprise.