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Stock market review (weekly) after 2nd November, 2012.

Sandy and US jobs report in the last day may bring good things for Obama in its election but market remained more or less immune from those things, especially the US jobs report failed to encourage the market in the last day.

INDEX
2nd November, 2012
10/26/2012-11/02/2012 (%)
10/19/2012-10/26/2012 (%)




Dow
13093
-0.11
-1.77
Ftse
5868.55
1.06
-1.52
Cac
3492.46
1.67
-1.98
Dax
7363.85
1.83
-2.02
Australia S&P
4460.1
-0.28
-2.16
Shanghai Com.
2117.05
2.46
-2.92
Hang Seng
22111.33
2.63
-0.03
Sensex
18755.45
-0.02
0.41
Russia :Titans
6046.79
-0.42
-1.97
Bovespa
37664.81
2.15
-2.79
Argentina: Merval
2395.13
0.62
-1.97
South Africa
58382.68
1.93
0.24

Markets are concentrating on energy & IT stock, looks like coming days one of them may do lot of things. Reports like Chinese PMI, Us housing and South Korean output reports were good but BoJ’s asset purchase program failed to allay the concern about their economy. Italian debt selling was good this week, on the other hand Spanish 10-year bond yields dropped on their current account surplus.




Stock Market forecast for the coming week.

This week it is a brief review.

Dow Jones I.A.  got less time this week and though it showed up moves around 13300 but I am not pleased with its last day closing.
In this moment if Dow failed to cross 13250 then that will definitely not a good sign for overall stock market because in that case Dow will be making lower tops and the medium term bearish pattern which I have mentioned in past will become true. The pattern which I am talking about is not totally clear yet but if it fully reacts then Dow may test up to 12400 levels in the downside.
Early days of the coming week may be important for Dow because considering its last day closing Dow may try to break 13000 levels. Dow is trying to make lower highs and now it will be important to see whether it also make the lows below 13000 but here I will be waiting for definite proofs.
If Dow does not drop more from here (or drop less may be around 13000 levels) then it may give strength to the short-term bullish pattern which I have mentioned in my last week review. But for that it hast to first break 13250 level.


German DAX  is still moving around 7200–7400 ranges, last week I was suspecting that if it maintains 7150 levels there is a chance that it may make a positive pattern. But even if it triggers the bullish pattern in future the upside is limited. In coming week if Dax maintains around 7260 levels in early days then there is a chance that it may try to test around 7400 levels again.
Last week I was also talking about a probable short-term bearish pattern, as long as Dax stays below around 7450 level that option is open. But now to trigger that pattern Dax has to come below 7200, in fact if it triggers that then we may see Dax around 7000 levels.
If in coming few weeks Dax does not break 7400 ranges then there is a chance of change in environment. Long-term position of Dax is not totally clear, it has both the options open so taking a decisive call is difficult. If we go with long-term reversals then it may drop up to around 6730 level (around 50.0% reversal).


Still FTSE 100 has not shown any developments in its movements but it is good to see that it still maintains 5800 levels. In last few days it was trying to break 5850 levels but these moves are not so encouraging. In fact if in coming week Ftse doesn’t able to break 5900 levels then I will be doubtful about it.
At past I said that Ftse has a chance of creating a the medium term bearish pattern if it breaks around 5650 level but as days are passing that probability is becoming narrowed. In fact I may change my opinion if Ftse does not drop below 5800 in coming week. Ftse is giving flat movements around some time so in this moment it is hard to predict any directional movement for sure, what I can say that breaking 5900 levels in the upside and 5800 levels in the downside are important for it.
On the basis of a longer time basis its moves in last few weeks are quite expected and I am still hopeful about the upside movement so long it maintains around 5800 ranges in the downside.


It is good to see that KOSPI is getting support at 1880-1900 ranges and looks like that it makes a base here. But I am not too much optimistic about this because the chance of making bearish pattern is still there. Last week I was talking that it may take time to react on that medium term bearish pattern, in fact it that bearish pattern is true then it may test higher levels from here as it did in last day. Here I think that it may get important resistance at around 1960 levels and Kospi will be out of that bearish pattern if it breaks around 2000 levels in the upside.
Kospi is making lower highs and lower lows and in a medium term bullish situation that is not bad but it is very hard to define any time. Last week I was talking about a probable short-term bullish pattern but this week’s movements did not show any new developments in that option, for this important level in the upside is around 1960. In the last day Kospi showed better move but that was not a strong one so now it is important for Kospi to maintain around 1910 level in early days of the coming week.


Last week I was expecting that if S&P/ASX 200 does not break 4525 then there is a chance that it may drop in later periods of the week but it is good to see that it maintains 4450 levels.
Last week I was talking about a short-term bearish pattern but since it did not test levels around 4600 levels so that option is not very sure. Yesterday’s close was not good; I am not sure whether S&P/ASX will be able to maintain 4450 levels. If it drops from here then 4350 level may act as a good support area though it has initial support level at around 4420 ranges. As I said in past that chance of making medium term bearish pattern is still there if S&P/ASX tests below 4300 level in the downside.
Considering the movements of S&P/ASX in last few months, there is a chance that it may hold in these levels or may test just below 4450 (flat moves) so in that case it may again test higher levels. Though it is not easy to predict for sure but if it fails to test around 4525 in the upside then that may not be good for S&P/ASX and on the other hand 4600 may not be too easy.




Reports due in coming days (from US)


Monday, 5th November, 2012 – ISM Non Mfg Index

Wednesday, 7th November, 2012 – Consumer Credit 

Thursday, 8th November, 2012 – Unemployment Claims, U.S. Trade Deficit.

Friday, 9th November, 2012 – Consumer Confidence


Others

Tuesday, 6th November, 2012 – German Factory Orders

Wednesday, 7th November, 2012 – German Industrial Production

Thursday, 8th November, 2012 – German Trade Balance, Chinese CPI.



NOTE Please see the disclaimer of this blog.

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