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Weekly Stock & Metal market reviews after 30th September, 2011.


Was that the month of September, suddenly it was not December end !  But when I see the characteristics of the market, especially the volumes, I am pretty surprise. I want to give a stat, in India, during April to September this year, Foreign institutions have invested only around 3% of the average amount which they invested in past. So why not volumes will evaporate from the markets ?
German vote, in favor of expanding EFSF, was really a positive step towards Greek problem. Though many are not seeing this enough for it. As I said in past, some groups are very anxious to see Lehman like collapse of Greece.


INDEX
30th-Sep, 2011
9/23/2011-9/30/2011
9/16/2011-9/23/2011




DOW
10913
1.31%
-6.41%
FTSE
5128
1.22%
-5.62%
CAC
2981
6.08%
-7.29%
DAX
5502
5.88%
-6.76%
NIKKEI
8700
1.63%
-3.42%
HANG SENG
17592
-0.43%
-9.18%
AUS
4008
2.69%
-5.92%
SHANGHAI
2359
-3.04%
-1.97%
SENSEX
16453
1.80%
-4.55%
BOVESPA
52324
-1.70%
-6.95%
RUSSIA
5700
5.03%
-11.94%
INDONESIA
3549
3.59%
-10.66%
KOSPI
1769
4.24%
-7.77%
STRAITS
2675
-0.85%
-3.26%
THAI
916.21
-4.37%
-7.24%
ARGENTINA
2463
-0.76%
-9.74%
S. AFRICA
29674
-1.28%
-3.18%


Stock indexes around the world, especially the European indexes rose more comparing to the other indexes. Euro area is getting some confidence after that event. Some of the economic reports from Euro-are were not good, like rise in inflation, plunge in economic confidence. Now Emerging markets are working on leverage, during couple of weeks they are facing the heat more than developed markets.

Let see the quarterly movements of different stock indexes during July to September, 2011.


INDEX
30th-Sep, 2011
1st-July-2011
7/01/2011-9/30/2011




DOW
10913
12582
-13.26%
FTSE
5128
5989
-14.37%
CAC
2981
4007
-25.60%
DAX
5502
7419
-25.83%
NIKKEI
8700
9868
-11.83%
HANG SENG
17592
22398
-21.45%
AUS
4008
4591
-12.69%
SHANGHAI
2359
2759
-14.49%
SENSEX
16453
18762
-12.30%
BOVESPA
52324
63394
-17.46%
RUSSIA
5700
6793
-16.09%
INDONESIA
3549
3927
-9.62%
KOSPI
1769
2125
-16.75
STRAITS
2675
3139
-14.78
THAI
916.21
1041
-11.98
ARGENTINA
2463
3396
-27.47
S. AFRICA
29674
31925
-7.05

Though there are not huge differences but yet BRICS countries are comparatively in better condition form the view of correction.


Metal Market

Crude is close to break crucial support level, for Nymex it is  $80  and for Brent it is $103 and if situation doesn’t change it may break those levels. On the other hand $86 for Nymex and $108 for Brent are good resistance level.
Last week I told about $1625 support level for Gold, now it looks like that it is getting some kind of support in this level. Now if it breaks this, then it may test $1500 support level. On the upside $1800 is a good resistance for it. For both Gold and Silver the relief rally was not strong enough, that is not a good sign. Investors may look for more corrections on it. Same thing is also true for Copper, things are worse for it. If it breaks $3.100 level then it will drop more in coming days.



Stock market forecast for Coming week


Some are expecting a rate cut by ECB in coming days, US Fed will start operation Twist from coming week, these things must effect stock markets.
I was pretty much sure that DOW is going to test 11200 level in the upside and I told it in last week. Last few day’s move was not good at all, it was rather bearish. The bearish pattern which I mentioned few weeks ago is still on for DOW. What I think that it may move around this 11200 to 10500 level.
As I said in last week that if things become good then DAX may test 5600 level, this week it did the same thing. Look like German vote was very supportive for DAX. Now there is a chance that it can test 6000 level, if it able to break 5800 level convincingly, but before that it may test 5350 level again.
I was expecting little more drops in Brazilian REAL, but it got the support of 52000. Now if it breaks this level then it has a chance to go below 50000. On the upside unless it breaks 57000 it is hard to think about any fresh run.
Shanghai Composite is still maintaining lower highs and lower lows pattern. On the upside it has a resistance at 2400 area.
KLSE broke crucial support of  1350 but it bounced back quickly to feel up the gap it created last week. Now it will follow the global trend. On the upside unless it breaks 1450, I don’t expect any new move from it.




Reports due in coming days


Monday, 3rd October, 2011 – ISM Mfg Index, Construction Spending.

Tuesday, 4th October, 2011 – Factory Orders
Wednesday, 5th October, 2011 – ADP Jobs Report, ISM Non-Mfg Index.
Thursday, 6th October,2011 –  Unemployment Claims

Friday, 7th October 2011 –  Labor Department’s Monthly Job Report


One thing is sure that if economies suffer recession then stock market must face the bear market, there is no escape route. I don’t know whether Greece will default or not but will it bring change in anyway for other countries, especially for US ?  I don’t have the answer. At past we saw that US avoided or better to say tried to avoid bear market by QE-2 and who knows this operation Twist is the new kind of  QE-?  to avoid the bear market which many of the big countries are facing now.
Last week, many of us were little late to understand the effect of operation Twist. When you think about it deeply then it becomes very easy to understand that liquidity will ultimately shift to the riskier assets, including stocks, but it may take some time.


NOTE :  Please see the disclaimer of this blog .


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