Global Market Outlook For Week Beginning 9th November 2009
Straits Times Index(STI) was well supported at the 2600 level, indicated by the uptrend line drawn. It should be retesting the stubborn 2746 resistance level after piercing through the 2700 once again. If 2746 can be broken successfully, the forward momentum should bring STI towards the 3000 mark before the end of the year.
After breaking out from the 2600-3000 consolidation range, Shanghai Stock Exchange(SSE) is now trading within the uptrend channel shown. Technically, it should be testing the 3478 ceiling, based on the upside target projection. Now, SSE is the leading indicator for global stock markets, taking over the leadership baton from the U.S. market.
Hang Seng Index(HSI) will soon be testing the 22,620 resistance level, attained on 23th October. If this barrier can be penetrated with the help of positive move from SSE, HSI will have the potential to reach the 23,368 level before the close of 2009.
Jakarta Composite Index(JCI) fell off the cliff and experienced a 13% decline within 2 trading weeks. The 2271 support level succeeded in cushioning the drop and JCI has since rebounded from that level. If it can push through the 2259 resistance level, the next ceiling for JCI will be the 2774 region. But if it fails to do so, there lies the danger of the formation of a Head-and-Shoulders chart pattern. If the 2271 were to be penetrated later on, JCI can be expected to experience further weakness.
Bombay Stock Exchange(BSE) SENSEX is also one of the best performing market in Asia, together with SSE, HSI and JCI, after registering a whopping 117% rally from the early March low!! After hitting the high of 17,493 region on 17th October, it plummeted 14% before it found some footing at the 15,600 support level. If it has the strength to break the ceiling of 17,493 level, the next overhead resistance will be at the 17,736 mark. 15,600 will provide the necessary underlying support, but if it were to be broken, we may see SENSEX decline to the 14,700 region.
Kuala Lumpur Composite Index(KLCI) seems to be enjoying a pretty good bull rally, bouncing along the uptrend line obediently. If it continues to perform accordingly, its next 2 resistance levels will be at 1276 and 1305 respectively. 1231 should act as a good support level to prevent any further decline.
S&P 500 rebounded from the 1019 support region, staged a powerful run-up and is now preparing to test the 21st October high of 1101. The next target for S&P 500 will be 1168 if it can penetrate this 1101 level successfully.
If NASDAQ can punch through the 2190 resistance level, it will complete a Double Bottom chart pattern, which will propel it to hit the next target of 2318. At this point of time, 2040 looks like a good support for NASDAQ to repel any further weakness.
Dow Jones has remarkably penetrated the 10,000 full number mark! But the worrying thing is that this was achieved with declining volume, as illustrated by the volume bars at the bottom of the chart. This shows a lack of institutional buying. Technically, it has the potential to hit 10,683 objective while its downside will be supported at the 9,630 level.
Will there be a Christmas Rally this year?? I definitely hope so! Let’s all party and enjoy while the going is good. Some green shoots are slowly turning into yellow weeds, eg. U.S. unemployment rate in October was a staggering 10.2%, 120th bank have been closed down since the start of 2009 in U.S….etc. Will 2010 Tiger Year turn out to be a good year for the global stock markets? Personally, I doubt so. Nevertheless, let’s all enjoy this rally as much as possible before more ugly events start to appear next year.
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.
Gerald Celente-There Is NO Economic Recovery – Its A COVERUP!!
Gerald Celente, a trend expert, visionary, keynote speaker, is trusted worldwide as the foremost authority on forecasting, analyzing and tracking trends. Celente is the publisher of the Trends Journal® and author of Trends 2000 and Trend Tracking. He is on the record for accurately forecasting and naming the current “Great Recession”; for forecasting the 1987 Stock Market Crash, the Dot-com bust, Gold Bull Run to Begin, 2001 Recession, the Real Estate bubble, the “Panic of ‘08″, Tax Revolts, the coming “Greatest Depression” and many more social, economic, business, consumer and geopolitical trends…
China May Overtake Japan As The World’s 2nd Largest Economy in 2010
Currently, U.S. is the world’s largest economy, followed by Japan and China respectively in the 2nd and 3rd placing. Because of this financial crisis, economists point out that China may have a chance to overtake Japan as the world’s 2nd largest economy in 2010, 5 years ahead of what the experts have anticipated. With China slowly conquering Japan’s export market and a reduction in productivity due to the aging population, this will cause a further decline in the Japan’s economy. The outlook for Japan for the next 10 or 20 years maybe quite bleak. Look at the Nikkei 225 chart below, the index for Japan stock market is still way way below the highest level in the 1990’s because of the famous “lost decade”.
In the 80’s, Japan’s GDP had surpassed that of U.S. once but now, Japan’s GDP is only 75% of that of U.S. and it is ranked No. 19 in the whole world. Japan’s unemployment rate is at 5.7% currently. For the 1st quarter of 2009, Japan’s economy has contracted 11.7% y-o-y, 2nd quarter GDP has only managed a 2.3% growth. Economists predicted that the Japan’s economy may decline by 3% this year and expand by only 1% next year; whereas China’s GDP is fore-casted to grow 8% this year.
At this point of time, China’s net income per capita is not even 10% that of Japan, but China’s economy has already overtaken that of Japan in terms of other economical factors. In fact, the purchasing power of the Chinese has already surpassed that of the Japanese in 1992, it is expected to overtake that of the American in 2020.
Will China overtake U.S. as the world’s largest economy by the year 2020? It is highly possible. Maybe China’s renminbi will replace U.S. dollar as the new world reserve currency by then too. Only time will tell.
Cheers
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