Saturday, November 26, 2011

Beginning of Roller Coaster Ride (2012) - Market Analysis for 28th November 2011 by Singaporeseeds

Daily chart for S&P


Daily chart for Dow


Daily chart for NASDAQ


Last week's market analysis:
“The S&P closed at its 50 day moving average last Friday and all 3 indexes were forming classic daily patterns of market topping throughout the week as we slowly trend downwards. My trading system also highlighted a bearish signal on Thursday. As we move into the December and the famous Christmas rally, I was cautious of being too bearish in a seasonally bullish period of the year.
Then during the weekend, this news came up.
http://www.bloomberg.com/news/2011-11-21/u-s-debt-supercommittee-is-said-to-be-poised-to-announce-failure-of-talks.html

With the situation in Europe going from bad to worse, and reports of repercussions of bad debts moving across the Atlantic into US, this will definitely move the indexes below their 50 day moving averages. (Only the Dow is still above now) On weekly charts it looks even worse. All 3 indexes are showing classic signs of failure and should hit their early October 2011 lows by the end of the year.”

Market Analysis for this week:
All indexes are below their 50 day moving average now. Short term and long term charts are pointing to a downtrend for the next 2 months. We should be back around the early October lows real soon.
Fundamentally, there is nothing bullish right now. Europe, USA and China are showing weakness, with huge debt problems surfacing in every country in the European Union. The US had been reducing its debt liabilities for the past few years by printing its way out of it but with inflation increasing and spiralling out of control, this will not be an option soon. 2012 is turning out to be a very bad year indeed.
We may see a bounce next week to around 1200 on S&P. However it will be downhill after that. I believe the market will break below the October lows and make a new low by the end of the year.
The roller coaster ride for 2012 had just began.

Daily chart for the Dollar


Last week's market analysis:
“The dollar has bounced back up above its 50 and 200 day moving average, indicating bullishness. This should be the case for the rest of the year.

We should move back up to the early October 2011 highs over the next few weeks”

Market analysis for this week:
The dollar is almost back at its October highs. We should break this high easily. Final target at 23.40 on UUP.

Daily chart for Gold


Quote from my last market analysis:
“Gold had been bouncing off its 50 day moving average throughout last week as a rising dollar puts bearish pressure on the price of gold. With such bad news coming out of both Europe and US, I believe we should see gold at an all-time high in the next few months.”

Market analysis for this week:
Gold had been forming a triangle pattern since August 2011. A triangle pattern is formed when volatility and price movement had been decreasing gradually. This pattern usually results in a surge of activity together with a large movement in price. This can be either up or down. With the problems occurring around the world, I would expect a surge up in price soon.

Daily chart for Crude Oil


Last week's market analysis:
“Crude dipped as expected and found support at its 200 day moving average. This is especially so after a steep uptrend and is healthy if we are to have a sustained rally in crude. Supports for this dip should come in at 37.60 and then 35.20.”

Market analysis for this week:
Crude is still forming a support around its 200 day moving average. I would expect crude to move sideways for the next few trading sessions.

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