Skip to main content

Weekly Stock & Metal market reviews after 14th October, 2011.

Is it Sovereign Debt problem or Banking crisis !  Someone who is new may make a mistake this week.
Earlier Fitch cut the rating of banks in UK, now the biggies like UBS is in the list. Deutsche bank, Goldman Sachs are in the list for future downgrade. Last week Fitch cut Spain’s rating, this week it was S&P. These rating agencies opened their account in this phase, by downgrading US and who knows tomorrow they may downgrade France, Germany !  and if not then at least UK !
14th-Oct, 2011


Some top European stock indexes, Dow and Australian stock index were rising for 3 consecutive weeks, though Emerging market indexes made a huge gain this week.
Retail sales for September rose in US but Widening trade gap with China is still a problem for them. Indian & Chinese inflation fever reduces a bit, but they need more. On the other side, problems in UK are still rising day by day.

Metal Market

Chinese tax on Oil and Natural Gas may effect their price in future. Nymex Crude (Dec) couldn’t able to break $90 level which I talked last week. Last day’s move was better and coming days it may again try that level, provided that market condition remains the same or some better news comes from Euro area. Same kind of moves came in Brent (Dec) Crude too. For it level is $114 in the upside and it has resistance at $106. Natural Gas showed some flat movements but in the last day it try to recover some grounds. It’s immediate resistance is at $3.90 and then at $4.3 level.
Gold was flat this week, I am expecting some more corrections in it, may be around $1500 level and chart pattern also supports that. On the other hand Gold is testing $1680 resistance level. Silver is also like Gold, and remain flat this week. New moves in Silver will come if it able to break $38 level. Copper also follow the precious metals and in coming days it may test $3.50 level, it’s support is at $3.10 level.

Stock market (Index) forecast for Coming week

In coming week, I am not sure whether market will move substantially in either side. What I think that market will choose it’s path after that meeting in 23rd October, unless a new thing comes up.
DOW is moving around the same upside range of 11200-11800. Last few days moves showed that it is in uncertain zone. If situation deteriorates then it may drop below 11200 levels and on the upside it will face hard time to break 11600-11800 level.
As I said in last week that chart pattern says that DAX has a chance to go higher levels if it break 5800, this week it just proved that. Now it is getting resistance around 6000 level, it needs to break this if it wants to set a new trend. Good outcomes from the meeting of the political leaders may give that incentive to break this level. But chart says now it can re-test 5800 level again in the downside and if it gets more bad news then it can drop more.
Though BOVESPA broke the 54000 resistance but I was expecting different thing. Now it can test up to 57000 provided it breaks 55000 level convincingly. On the downside if it breaks 53000 level then it may again test level below 51000.
Shanghai Composite is getting some king of resistance at 2440, if it able to break this level then it may test 2480 level. In the downside it has support around 2380 level and if things get worse it can test 2300 level.
KLSE is close to break a crucial level of 1450-1500. If it able to break this convincingly then we can expect renewed interest on it. On the downside it may retest upto1300 level but before that immediate support is at below1400 level.

Reports due in coming days

Monday, 17th October, 2011 – Industrial Production
Tuesday, 18th October, 2011 – Producer Price Index, Housing Market Index.
Wednesday, 19th October, 2011 – Consumer Price Index, Housing Starts, Fed’s Beige Book.
Thursday, 20th October, 2011 – Unemployment Claims, Existing Home Sales, Phila. Fed Index. Leading Economic Indicators.

Some are forecasting a steep slowdown for German economy, I think in this moment any bad thing for German economy will create a bigger problem for Euro area. Now Germany is not alone Singapore also cut it’s growth forecast for 2011. Leaders are debating about strengthening of IMF but I think it will be better if they think beyond Greek loan, what about the biggies like Spain!    Will it be affordable?
Before year end some rise in stock market are due. I don’t know whether this is the last run of the year but it is sure that most of the indexes are in crucial position, from where they can turn in either side.

NOTE :  Please see the disclaimer of 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.