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Weekly Stock & Commodity market reviews after 28th October, 2011.


Markets welcomed the Euro deal, probably that was the headline of last Thursday as picture was different in Friday. Definitely Euro-zone bought more time but I am not sure whether to say Euro-zone or Greece !  And if it is Greece then other PIIGS…..  countries are going to haunt market in coming days.
Markets around the world rose beyond many of our expectations. Some are saying that before year end markets tend to be lower and it is waiting for another jump, this is one of the features of the market. I don’t understand clearly whether USD has any contribution behind this.

INDEX
28th-Oct, 2011
10/21/2011-10/28/2011 (%)
10/14/2011-10/21/2011




DOW
12231
3.58231707
-1.40%
FTSE
5702
3.89941691
-0.40%
CAC
3348
5.58183538
1.42%
DAX
6346
6.29815745
-0.05%
NIKKEI
9050
4.28670201
0.78%
HANG SENG
20019
11.0624133
2.57%
AUS
4353
3.56887937
0.04%
SHANGHAI
2473
6.7328442
4.68%
SENSEX
17804
6.07089663
1.73%
BOVESPA
59513
7.70608995
-0.40%
RUSSIA
6224
5.31302876
-0.95%
INDONESIA
3829
5.77348066
1.20%
KOSPI
1929
4.95103373
-0.16%
STRAITS
2905
7.11651917
1.16%
THAI
973.18
6.20293777
4.12%
ARGENTINA
3015
7.79406507
-2.94%

Now if we forget about that deal and look into the other aspects then it is nothing to cheer as, service & manufacturing sector contracted in Euro-area, Spanish unemployment rate hit 15 years high level, Italy couldn’t able to meet their borrowing target. Euro-zone is expecting help from Emerging nations, especially from China.



Oil & Metal market forecast for coming week

Nymex Oil (Dec) has immediate support at $90 levels, during few weeks it is following a channel which also indicate that $90 levels in the downside. On the upside it can get some resistance at $96 levels. Brent (Dec) is getting good resistance at $112 areas, if it breaks this then it can get resistance at around $118 level. Brent has an immediate support at around $108 levels. Last day’s move in Natural Gas was good, if there is any force in this move then it can test level up to $4.200.

As US dollar is dropping from 77 to 74 levels, most of the commodities are rising, especially the metals. Though I was looking $1500 level for Gold (Nov) but as I said in last day that, $1680 level is very crucial for Gold. This week by breaking that level it made a good pattern. Now form here it can move up to $1820 levels. Look like Gold is following a channel, so if it follows that then it can test $1680 level again. Like Gold, Silver has formed the same pattern. I don’t know whether it will test above $40 levels but it can easily test $37 level. It has an immediate support at $33 levels. I was expecting Copper to test higher levels above. This week Copper (Dec) follow the precious metals, it can go up to $4.00 levels. Now it is finding some minor resistance at $3.70 areas. It has a support at $3.50 levels.



Stock market (Index) forecast for Coming week

In coming week problems in Italy and more transparency about Euro-deals are going to reflect in stock markets and we shouldn’t forget rumour about that QE-3. Some crucial events are due this week which may decide whether this rise will continue or not, in coming days.
I was expecting DOW to break that 11800 level, but it went more. Now DOW has an initial resistance at 12400 areas. Some indicators are showing that it is in overbought condition, but as I said, I think it will test 12400 levels in the upside. On the downside it has support at 11500 levels.
Irrespective of the outcome of the meeting last week I anticipated that DAX may drop, but too much expectation forced it to break the crucial level of 6200. Now it is very important for DAX to maintain its move above 6200. Last day’s figure was not good and it looks to me that it may again try to test levels around 6000, considering the fact that it made a gap. In later period things can change and it has a resistance around 6800 levels.
BOVESPA’s move was good, now it has a chance to test even up to level 64000 in coming future, provided environment supports that. Breaking 57000 levels was very good for it, now it is getting resistance at 60000. In coming week, I will not surprise if it again tries to test 56000 levels.
Shanghai Composite’s move was better; it makes a good pattern in the chart. From here it may test level up to 2600, in the initial day, it can test 5400 levels. Last week I said that KLSE has more chance to rise than drop, now it has support around 1440. If market rises from here then it can test level above1500.



Reports due in coming days

Monday, 31st October, 2011 – Chicago PMI
Tuesday, 1st November, 2011 – ISM Mfg. Index, Construction Spending, Auto Sales.
Wednesday, 2nd November, 2011 – ADP Job Report, FOMC Announcement, Bernanke’s Press Conference.
Thursday, 3rd November, 2011 – Unemployment Claims, Productivity, Factory Orders, ISM Non-Mfg Index.

Friday, 4th November, 2011 – Employment Report For October

It is sure that there are some better reports from US but I am not sure about bottoming of slowdown, if it is true then why there is a rumour in the market about the imminent QE-3, in spite of the recently launched operation Twist. Now if we move away from US and Euro area then we can see that reports from UK and other Emerging nations are not good, let say Thailand and India, they have slashed there GDP forecast and slowing growth in south Korean. These are not better picture.
What I think that markets volatility will continue and it will be very premature to expect a new trend.



NOTE :  Please see the disclaimer of this blog .



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