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Stock market review (weekly) after 6th January, 2012.


I need more time to prove this but what I am seeing that there were a division between the stock indexes. While some are showing trend to go up from these levels where others are showing more chances to drop. Markets were mixed this week.
  
INDEX
6th Jan, 2012
12/30/2011-1/6/2012 (%)
12/23/2011-12/30/2011 (%)




Dow
12359
1.15
-0.62
Ftse
5649.68
1.39
1.08
Cac
3137.36
-0.71
1.86
Dax
6057.92
3.58
-0.51
Australia S&P
4108.5
0.92
-0.48
Shanghai Com.
2163.39
-1.64
-0.24
Hang Seng
18593.06
0.86
-1.04
Sensex
15867.73
2.67
-1.8
Russia - Titans
5891.6
2.76
0.96
Bovespa
58600.37
3.25
-1.64

I do not understand why FTSE and Shanghai Composite is performing this way. Euro’s drop is creating more opportunities for Germany, as we can see when German unemployment rate is falling, when unemployment rate in euro zone stayed at record high in November, 2011. Chinese manufacturing data was good but their narrowing trade surplus for 3rd consecutive year is a concern for them.



Stock market forecast for coming week.

Rising yields are still concern for Euro zone nations, so rating downgrades may again affect them in coming weeks. As I said in past that I am concern about France and UK. Holiday season is over now, so we can see more volumes in coming days.
I was pretty sure that DOW will cross 12200 levels, I was expecting that DOW may go up to 12600-12800. I think lack of volume is still a concern for it. In the downside it has a support at 11800, but without a selling market may not see that level. What I think that market may see a reversal up to around 12100, but I will be looking DOW to test level above 12600.
I am still expecting DAX to test level above 6200 due to the pattern it makes. It can easily go up to 6600 and I will be positive unless it breaks level around 5600-5700. I do not know why but if I look at bigger time limit, it looks to me that DAX can even go up to 7200 level, though circumstance now in Euro zone does not permit us to think up to that level. So it is better that we should look it step by step.
BOVESPA is trying to break a crucial 59000 level, now if it breaks that then it has a chance to test 64000 levels. In the downside it has a chance to test 55000 levels. If market remains stable then I will be expecting movement in the upside from BOVESPA.
Straits TIME is still not out of the bearish pattern, 2600 is the level that need to be watch. One thing I am seeing during last few weeks that it is making lower highs and lower lows, so if it follows that then it can go below 2600. But still its bullish pattern is open and I am sure that if market recovers then it will go with it, therefore the level is 2900.
Shanghai composite is still in a bear run, though some short-term indicators are saying that it is in oversold zone but lack of volume is not showing any trend right now. So 2300 in the upside and 2000 in the downside are the level that needs to be watched.


Reports due in coming days (from US)

Tuesday, 10th January, 2012 – Small business Confidence index

Wednesday, 11th January, 2012 – Fed’s Beige Book.

Thursday, 12th January, 2012 – Unemployment Claims, Retail Sales.

Friday, 13th January, 2012 – US Trade deficit, Consumer Sentiment.

I don’t know whether Euro zone manufacturing sector is going to face another recession or not!  But there are better news coming from China, India, US and even Australia. Situation is not improving in Europe even if we come into judgment through bond yields. So future of stock indexes depend on two thing one is QE and other is, can positives from US (plus BRICs) overcome the negatives of Euro area ?



NOTE :  Please see the disclaimer of this blog.

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