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Stock market review (weekly) after 21st September, 2012.

All those stimulus steroids from both sides of Atlantic failed to cheer the sentiment even for a week. Most of the stock indexes were flat this week in spite of that Japanese stimulus. Chinese & Japanese dispute over an island create some minor problem in the early days of this week though it disappeared with asset purchase program of BoJ. But later Chinese PMI and Japanese export figure could not deliver anything to cheer.

INDEX
21st September, 2012
9/14/2012-9/21/2012 (%)
9/7/2012-9/14/2012 (%)




Dow
13579
-0.1
2.16
Ftse
5852.62
-1.06
2.08
Cac
3530.72
-1.42
1.78
Dax
7451.62
0.53
2.74
Australia S&P
4408.3
0.42
1.48
Shanghai Com.
2026.69
-4.57
-0.18
Hang Seng
20734.94
0.51
4.18
Sensex
18752.83
1.56
4.41
Russia :Titans
6291.91
-3.71
4.44
Bovespa
61320.07
-1.26
6.49
Argentina: Merval
2531.75
-0.48
6.79
South Africa
36206.33
-0.94
2.25

Many emerging stock indexes have faced small correction this week, especially the Chinese market. Where as, during last few weeks Greece market is showing good strength.
Spanish govt. official said that they will only request for bail-out when bond yields indicates, it is quite normal considering the conditions which will be attached with the aid packages. Their bond auction was good this week but recapitalization of their bank will be a big problem for them.


Stock market forecast for coming week.

All the stimulus episodes have gone though market may expect one of that kind from China too but when US fed & Ecb failed to do that, I don’t think that Chinese stimulus is going to effect much.

What we got from these stimulus!  At this moment just a few day’s rally but in future we may expect better things. Because when those cheap moneys will be in the market then we may feel the true meaning of those asset purchase programs. But we should not forget that most of the stock indexes are in higher levels and if we compare it with few years ago then there were lot of macro positive figures from emerging markets but this time they are also lacking. So these higher stock indexes are not showing supporting fundamentals.

Markets were flat this week and I have a feeling that stock indexes may show any directional moves in coming week. Let talks about the stock indexes.


Dow’s movement was flat this week so most of my last week’s forecast is still applicable on it. During last few months I was talking about the medium-term bullish pattern for Dow Jones I.A. and now it looks like that Dow is triggering that. If this bullish pattern works-out completely then roughly it may go up to around 14200. If it able to cross 13600 then next resistance is at around 13800.
In coming week early days may be a testing time for Dow because if it does not able to cross 13600 then a minor correction may not be ruled out. Even if it gives little correction or moves flat in early days, it may go upside in later periods. If Dow drops from here then around 13300 is its initial support level and 13200 is its next support level. I will think about a future short-term bearish pattern if it drops around 13000.

For German DAX I am maintaining my last week’s stand because except in the later days it was mostly flat. The way it is showing small moves that may create reservation among investors, especially in these higher levels and past experiences also supporting that. What I feel that it has the chance of going upward but it is becoming difficult to forecast definitely about its move in advance because suddenly the game can change within one or two days.
7500 is its initial target in the upside and the better one is at 7600 for any bigger move. In the downside 7200 is the initial support level and the stronger one is at 7000 level. If Dax drops from 7000 level then 6800 will be a good support for it. On the other hand if we go with recent reversals then it can drop up to around 6600 level (around 61.8% reversal).

Last day’s move was encouraging in last week but this week FTSE 100 gave flat moves. Technically it is not in too much over-bought condition so it is quite possible that it may break 5900 and may test around 6000 levels in coming week. On the other side if it drops from here  or failed to test above 5900 level then there is a chance of correction in later period of the coming week. I will think about a bearish pattern if it drops below 5700 level.
What I think that it may show any directional move in middle days but it is hard to say that it may not test 5800 level in early days of the coming week.

Breaking 1950 was a good signal for South Korean KOSPI and that makes it eligible for more up moves (approximately around 2150 level). Now it is getting resistance at 2000 level, this is quite possible. I still think that kospi may break this 2000 level; its less over-bought condition is also supporting that.
But even if go past this 2000 level in coming week, I think that it will get better resistance at 2050 level in the upside. On the other side if it drops from this level then there is a chance that Kospi may make a bearish pattern if it goes below 1900 but still it needs more time to specify details about it. There is possibility that in early days Kospi may try to fill up the gap which it has created in last week and later it may go in the upside.

S&P/ASX 200 is still unable to break 4400 level which was frustrating this week, so there is not much change about its prediction from last week. I still think it has the probability to go past 4400 level as some technical indicators are not showing too much over-bought condition. But it is hard to specify exact timing.
During past 12-14 months S&P/ASX is making lower lows which also support the up moves. In the upside 4500 is the initial resistance and the bigger one is at 4600 level. In the medium term basis it has created a bullish pattern though it is not 100% accurate but if that pattern is true then S&P/ASX may go up to 4800 in coming future. So in coming week emphasis must be given on 4400 level.
On the other hand if it failed to break 4400 level then there is a chance that S&P/ASX will make a bearish pattern and it may trigger that below 4300 level. I think even if it failed to cross 4400, it needs more time to prove its bearish pattern.



Reports due in coming days (from US)

Monday, 24th September, 2012 – Dallas Fed Mfg Index

Tuesday, 25th September, 2012 – Housing Price Index, Consumer Confidence, Richmond Fed Mfg Index.

Wednesday, 26th September, 2012 – New Home Sales

Thursday, 27th September, 2012 – Unemployment Claims, 2nd Qtr GDP Rev, Durable Gds Orders, Pending Home Sales.

Friday, 28th September, 2012 – Personal Spending, Chicago PMI, Consumer Sentiment.



NOTE Please see the disclaimer of this blog.

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