At a glance, all the charts looked almost the same. The shape is the same except the magnitude of advance and decline. Dow has been holding very well despite of all its problems. Dow has given back only 21% of what it has gained from March 2009's low to April 2011's high.
FTSE has given back 34%
DAX -51%
CAC40 is the worst at -79%
In Asia Singapore has given back 33%
Australia -47%
Taiwan also -47%
Hang Seng -54%
All the charts have only 3 waves up since the 2009 bottom except Hong Kong. (Personally I would like to push the the wave 1-2 of Hong Kong to the left to be the last down wave of the 2007-2008 bear run). The 2009-2012 rebound is definitely a B wave and we have gone through one-third way of C. We are at the early stage of wave 3 of C at this moment.
In Europe, so far 5 governments have toppled, Greece, Italy, Portugal, Spain and Ireland, but the debts problems remained. Hedge funds are having good times moving from country to country hammering the Government securities. "See you at 7" seemed to be the target.
Next year, Europe will need to raise more than US$1.5 trillion to refinance maturing bonds at a much higher rate. With growing debts and the proposed austerity measures, that will lead to a shrinking GDP in general. Unemployment rate will go up, consumption will go down, even China may go into recession due to a slow down in its export. US economy is already in 'deep shit', I really can't find any reason for the market not to go south.
.
No comments:
Post a Comment