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Stock market review (weekly) after 27th January, 2012.


US Fed has not announced QE-3!  I think it may take little time to understand the matter. Actually they already did it by giving cheaper dollar funds to banks, because without this it is hard to draw any conclusion. Less than expected GDP figure supports Fed’s decision of holing interest rate.

INDEX
27th Jan, 2012
1/20/2011-1/27/2012 (%)
1/13/2011-1/20/2012 (%)




Dow
12660
-0.47
2.4
Ftse
5733.45
0.09
1.63
Cac
3318.76
-0.08
3.91
Dax
6511.98
1.68
4.25
Australia S&P
4288.4
1.15
1.04
Shanghai Com.
2319.12
0
3.32
Hang Seng
20501.67
1.95
4.72
Sensex
17233.98
2.96
3.62
Russia - Titans
6272.15
1.51
2.29
Bovespa
62904.2
0.95
5.35
Argentina Merval
2831.58
-1.26
4.14
South Africa
33895.02
0.57
2.35

Most indexes were good this week; many major indexes are facing 4 to 5th strait positive week.
Japan is not familiar about annual trade deficit but as I said in my yearly review that Japan can be the next big thing. This week unemployment data from Spain and economic activity report from UK were not good, but German business confidence data was better.



Stock market forecast for coming week.

Many Stock indexes are still to react on Fitch downgrade and US gdp figure, but I think the bigger impact will be the outcome of Greek debt talk. Stock indexes are acting like a bull market but corresponding environment is not much encouraging. Let say Greek debt talk outcome is good; I do not think that is going to stop all uncertainties, because already Portugal is waiting. Most of the stock indexes are in overbought zone, in spite of that chart patterns are showing that it can go more, what I think that it will be better for investors to book some profit here.

DOW is finally testing 12800 level, though it is in overbought zone but I still think that it can test level above 12800. Indicators are not saying that it is in too much overbought zone, so it can go up more from here. But if it drops then it can test initial support level around 12400 and the good one is at 12200.
Last few days closing were not good for DAX, but still I think that DAX has a chance to go up to 7200. In spite of little bit overbought condition I am positive about up move of DAX, though it may face few negative days. Now it has a good support at 6200.
BOVESPA has a good resistance at 64000, as I said in past week that it is in overbought condition and if it faces any correction then it can test 59000 level and the worst for now is 56000. But if it follows the general trend and goes up then I will be waiting to see that it breaks 64000 and is testing 68000 level.
So finally Straits TIME is in 2900 level, which I said during last few weeks. Some technical indicators are saying that it is in over-bought zone, now I do not know whether it is going to correct a bit from here but it is in a pattern where from it can go up to 3200 level. Though this opinion will not stand if major selling comes.



Reports due in coming days (from US)

Monday, 30th January, 2011 – Consumer Income and Spending

Tuesday, 31st January, 2011 – Home Price Index, Chicago PMI, Consumer Confidence.

Wednesday, 1st February, 2012 – Auto Sales, ADP Job Report, ISM mfg. Index, Construction Spending.

Thursday, 2nd February, 2012 – Unemployment Claims, Productivity.

Friday, 3rd February, 2012 – Employment Report, Factory Order, ISM Non-Mfg Index.


Euro leaders need to think about a comprehensive plan regarding all PIIGS countries, rather than a temporary solution. They need to think about Euro Bond or some other ways to control sovereign debt market.
Though US GDP figure in 4th quarter is less than expectation but it is more than previous quarter, so that is not worse. What I think is bigger worry is that US Fed has cut the growth forecast. At past they were telling to hold the rates till mid 2013 but now they have changed it to late 2014. I feel there are lots of discrepancies.

Look like market is on a stand by position, waiting for something. I don’t know what is that?   Yet !!!!!


NOTE:  Please see the disclaimer of this blog.

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