Market is concerned with the ending of QE II and the latest economic numbers coming out of US does not bode well. Employment figures continue to be weak although some commentators say that part of the slow down is due to the disruption in supply chain caused by the Japanese earthquake.
On the charts, major markets are still making lower highs and lower lows (Downtrend), albeit indicators like RSI and MACD are oversold and minor rebounds may take place. Given the dismal volume and the pattern of hardly any follow through buying on the previous rebounds, the general markets may need a strong down leg to scare and flush out the weak holders before another rally will rise from the ashes. VIX is still low at 17.7 despite a drop of 700 Dow pts from recent high of 12880, shows that the fear element is not present yet. The catalyst for such a move may come from next month's economic data or the continued impasse over the resolution of the Greece fiscal crisis. The OPEC is also not helping with the lack of agreement to increase oil quota. Oil prolonged stay above $100 is also not helping (read today's BT editorial).
When Dow breaks, US FED and Congress may then be scared into a resolution to go for more easing. Until then more waiting...
dear virtuoso, was that yr first posting? welcome to the group. Yr posting is excellent. I am not sure I agree tho, as my thinking has been momentarily swayed by bean sprouts -- also known as tau geh.
I will explain later, but first surprise, surprise -- the source of E.coli was bean sprouts!
BERLIN - Germany on Friday blamed sprouts for a bacteria outbreak that has left at least 30 dead and some 3,000 ill, and cost farmers across Europe hundreds of millions in lost sales.
"It's the sprouts," the president of the Robert Koch Institute, Reinhard Burger, told a news conference on the outbreak of enterohaemorrhagic E. coli (EHEC) in northern Germany.
"People who ate sprouts were found to be nine times more likely to have bloody diarrhoea or other signs of EHEC infection than those who did not," he said, citing a study of more than 100 people who fell ill after dining in restaurants.
As a result, the government lifted a warning against eating raw tomatoes, lettuce and cucumbers.
So what has bean sprouts got to do with the stock market? In my way of thinking currently, I feel that there are many known factors that are being analysed, such as the euro debt.
like the E.coli case, the market has a way of confounding our expectations, or surprising us at the very least.
So when we are made to think (by experts) that it's cucumbers or tomatoes, it turns out to be tau geh.
Not sure if you people follow me, but anyway that's my slightly deranged view of the market
Dear yeh thank you for your insightful reply and the interesting use of the humble tau geh as an analogy to remind us that the market always comfound us in the most unexpected way. I agree the euro crisis, although a serious issue, has been overplayed by the media for a while and recycled by the experts to justified the weakness in the mkts. The market is a discounting mechanism. Currently bad news drive the markets lower and good news do not support it much. There will come a time when bad news do not depress it further, instead the mkt rallies and good news drive it up further (recall the panic over the Japanese nuclear crisis in March, mkts bottomed in the midst in worsening news). Let's keep a lookout for symptoms of the tme when the worst of news has been discounted. That time will surely come
Off a Cliff? The downtrend in the equity market continues, and we’re currently working on six straight weeks of declines in most of the major indices. Stocks in the S&P 500 Index are down nearly 5.8% since vaulting to their April highs. In late May, the index broke below its short-term, 50-day moving average. So, is this a clear signal that stocks have fallen off a cliff? I don’t think so. The chart below clearly depicts the drop in stocks, a drop that’s been particularly pronounced since the beginning of June. As of this writing, the broad measure of the domestic equity market traded at 1,284. Yet, that’s still about 2.6% above the all-important technical support at the 200-day average of 1,251. If we see stocks fall below the 200-day moving average -- and it’s certainly possible -- we then can say that the bears are in control and that the market has officially shed its bullish disposition. Chart Interestingly, the S&P 500 Index hasn’t been below its 200-day moving average since September 2010. So, if we did get a dip below this level, one could say that we were overdue for this kind of sell-off. My personal opinion is that stocks are likely to creep a bit lower, but hold firmly around that 1,250 mark. However, I wouldn’t be worried if, in fact, they did take a dip below the long-term trend line. Sponsored Content Are you an investor who wants to retire comfortably? If you have a $500,000 portfolio, you should download our guide “The 15-Minute Retirement Plan.” Even if you’re not sure how to start rebuilding your portfolio or who to turn to for help, this investing guide includes research and analysis you can use right now to discover your portfolio’s potential and to help you plan for a comfortable and more secure retirement. Don’t miss it! Click here to download your guide right now. So, how do you play the situation now as an investor? Well, if you are long this market, I don’t think it’s time to panic and start liquidating positions. If you have big profits in any one position, then it can’t hurt to protect those gains. If, however, you run and sell everything here, I think you’ll regret it a month or two from now. If you are on the sidelines with cash, then now is the time to stay there and wait to see how this market plays out. If we start to move higher, then you may want to start nibbling around the edges of the more damaged sectors out there. On the other hand, if stocks continue to falter, you won’t have your money subject to the bearish bias. If you’d like to find out more about how to position your assets in this tricky market, then I invite you to check out my Successful Investing advisory service. We’ve bested the market for the past 30-plus years, and we’ve done it by following distinct rules that tell us when it’s time to move our chips into the pot, and when it’s time to fold our hand.
.....taken from Fabian.com
I think like wise, buy on dip and take profit from stock which have big gain to protect profit.
ECRI have forcast Global Industrial growth to slow, but no double dip.
no panic at the moment, unless PIGS give surprises.
Dear Forummers,
I have started nibbling at selected stocks over the past week and will continue to add on to my portfolio in the coming few weeks.
I believe the market is selling on expectations of QE 2 program ending. The correction may continue for a few more days.
Once the news is officially announced, the market may take a rebound. Funds also have to polish up their window dressing at end June. It is a good trading period.
Overall, 2011 will be a rough year. So it is more about stock picking actually.
I will continue to keep Artivision for a punt. I believe interests are building up towards Facebook IPO. I will sell closer to its listing. I have to remind all that this is a punt, not an investment.
Some thing to munch on from a longer term perspective. Roubini warns of perfect storm by 2013. A “perfect storm” of fiscal woe in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may converge on the global economy, New York University professor Nouriel Roubini said.There’s a one-in-three chance the factors will combine to stunt growth from 2013, Roubini said in a June 11 interview in Singapore. Other possible outcomes are “anemic but okay” global growth or an “optimistic” scenario in which the expansion improves.“There are already elements of fragility,” he said. “Everybody’s kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest.” Full text at:
www.bloomberg.com/news/2011-06-11/china-...el-roubini-says.html
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