Monday, August 17, 2009
Black Monday??????
THE ROAR OF THE BEAR
Futures down heavy as investors pull in their horns amid growing worry about strength of global recovery. Asia, Hong Kong's Hang Seng dived nearly 5%. Major markets in Europe were all down about 2% in morning trading. And this on the news that Japan is the latest country to emerge from its worst recession since the end of the second world war, recording its first quarter of growth for more than a year amid a rise in exports. Japan saw it's GDP rise at an annualised rate of 3.7% in the April-June period, and by 0.9% from the previous three months. Exports rose 6.3% from the previous quarter. But Analysts have warned that this recovery could evaporate as it was a home based stimulus package handout that helped things. Some of the benefits came through cash handouts to all residents - those, together with subsidies for the fuel-efficient cars and green electrical appliances . Unemployment is at a six-year high of 5.4% and could rise to a record 5.8% next year. There is a strong fear that if spending slows or stops things could turn for the worst fast. I feel that the spending could easly stop as people may have bought all the discounted goods they need for some time. We saw a rise in oil and steel prices due to restocking of inventory but will we see the market buy up the new stock as quick as last time. I think not.
Black Monday??????
THE ROAR OF THE BEAR
Futures down heavy as investors pull in their horns amid growing worry about strength of global recovery. Asia, Hong Kong's Hang Seng dived nearly 5%. Major markets in Europe were all down about 2% in morning trading. And this on the news that Japan is the latest country to emerge from its worst recession since the end of the second world war, recording its first quarter of growth for more than a year amid a rise in exports. Japan saw it's GDP rise at an annualised rate of 3.7% in the April-June period, and by 0.9% from the previous three months. Exports rose 6.3% from the previous quarter. But Analysts have warned that this recovery could evaporate as it was a home based stimulus package handout that helped things. Some of the benefits came through cash handouts to all residents - those, together with subsidies for the fuel-efficient cars and green electrical appliances . Unemployment is at a six-year high of 5.4% and could rise to a record 5.8% next year. There is a strong fear that if spending slows or stops things could turn for the worst fast. I feel that the spending could easly stop as people may have bought all the discounted goods they need for some time. We saw a rise in oil and steel prices due to restocking of inventory but will we see the market buy up the new stock as quick as last time. I think not.
The Chinese market is off 17% from it's high on the 4th Aug
Jobs still in my view is key to the recovery. While I have been away for a month on holidays I did hear that the job losses had improved in the US but still down. The US needs to be creating 250k jobs to keep even. Where are those jobs going to come from in the near future . I just cant see it happening for some time.
The stimulus packages have had some success but I fear another round will do more harm than good. It is better for the world to find a level to work off than a pumped up false floor.
.jpg)
I'm still a bear , down on tza about $20k but have made progress trading over the last couple of days. I am still 95% cash and won't be entering any long positions bar a shot or two at the odd bounce for a 2 min trade.
I think the long term price of oil could be higher but think it will come under big pressure short term and could see $45 in Oct a month I hate. The stock markets will dictate the oil price also the $ which will rise before it eventually gets hammered.
Gold is a buy at $850. Silver is in my view better value than gold and may be the better long term hold.
Will the s&p see the March lows ............ I think yes easy.
