Global Market Outlook For Week Beginning 26th October 2009
The 2700 resistance level has FINALLY been broken after as many as 5 attempts for STI. The magic number now is 2746. A successful breaching of 2746 will fuel STI with the necessary momentum to charge towards the 3000 mark before the close of 2009.
Shanghai Stock Exchange (SSE) seems to have broken out from the consolidation range of between 2600 and 3000. Based on the upside target projection, the next resistance will be around the early August high of 3478.
Coupled with the upward momentum of SSE, Hang Seng Index (HSI) charged through the high of 21,930 attained on 17thSept 2009 impressively. Going forwards, HSI should have enough strength to trend up towards the next ceiling of 23,300.
Kuala Lumpur Composite Index (KLCI) has rallied 52% from the low of 838 since early March this year. The next 2 resistance levels will be at 1276 and 1305 respectively. The immediate support for KLCI is at the 1241 level.
Jakarta Composite Index (JCI) has experienced a tremendous run-up of 106% since the low of 1244 attained in early March this year, making it one of the best performing market in Asia together with SSE and HSI!! The next ceiling for JCI will be much higher at 2774, provided that it can bulldozed through the high of 2559 achieved on 7th October 2009. It may retreat to the 2411 level if it were to experience any weakness or profit-taking.
In U.S., S&P 500 has been trading within a tight range after breaching the 1080 resistance level. Its immediate support will be at 1039 if it fails to trend higher. However, it may have a chance to touch 1168 if it can gather enough strength to rally from the current trading range.
NASDAQ has a half-hearted penetration of the 2167 level, after which it has been tiptoeing around this level for the past fortnights. It’s next resistance level will be at 2319 while 2040 will be its immediate support.
Dow Jones has been flirting with the magicial 10,000 level for the last 2 weeks as well. It may retreat to the 9630 support level. Technically, it has the potential to hit 10,642 if it can pull away from the 10,000 level successfully.
Personally, I am not particularly worried that the stock markets will have a drastic decline before we draw the curtain for 2009. I believe the party can still carry on because of the aggressive stimulus plans, bailouts, low global interest rates…etc. So let’s all enjoy the music, wine and food while the party is still on, but with the caution that we may have a significant correction next year at the back of our mind. If you guys think that this ugly Great Recession is already over, I urge you to think again seriously………
Cheers 
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
Global Market Outlook For Week Beginning 12th October 2009
2700 really proves to be a very tough resistance level for STI to crack, it has till now altogether tried 4 times unsuccessfully! It maybe attempting for the 5th time these coming weeks. If it can be broken, the next ceiling will be at 2746, the previous supports attained in Jan and March 2008. I am cautiously optimistic that STI will just have enough strength to hit 3000 before year end comes. We should see a substantial correction in coming 2010.
Trading for the China market has just resumed after a week long celebration of the 60th anniversary of PRC and the mid-Autumn festival. Shanghai Stock Exchange (SSE) will be trading and consolidating between the 2600 and 3000 level to provide a solid base for further uptrend continuation to retest the early August high of 3478. This current consolidation should be viewed as a pause in the long term uptrend rather than the start of a trend reversal for SSE.
Hang Seng Index (HSI) is now climbing towards the 21930 level attained on 17th Sept 209. It will have enough momentum to head towards the next 23300 and 26300 resistance levels if this 21930 ceiling can be penetrated. The immediate support for HSI is at the 21200 level.
In U.S., S&P 500 maybe testing the 1080 resistance level soon. If this can be accomplished, it will have enough strength to climb higher towards the next resistance level of 1168.
Technically, NASDAQ seems to be the stongest index among the 3 major U.S. indexes. It is now approaching the barrier of 2167 level. If it can power through this resistance level, it will have a good chance of testing the next ceiling of 2319.
If Dow Jones can break the 9918 level, it will face a very stubborn resistance at 10,000 level, about 100 points away. Personally, I believe this will be a very very DIFFICULT level to break through. Till now, Dow Jones is lagging behind the other 2 major US indexes, only rallying 53% from the March low, as compared to 71% for NASDAQ and 62% for S&P 500.
Personally, I feel that the global stock markets may have another 1 or 2 more upburst before they experience a substantial correction next year. I am quite sure that the double-dip recession will come next year, but how bad is it going to be, only time will tell. Let’s all enjoy this party, created by the excessive money pumped in by all the central banks in the world through bailouts and stimulus plans, while we can because next year we should see some very bumpy days ahead, maybe well into 2011. I have doubt that we have seen the worst of the financial meltdown triggered by the subprime mess YET 
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
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