Very Pessimistic

"Europe is just like a drowning man bobbing to the surface. Each new breath provides hope that the situation is finally under control. But in reality it just brings us one step closer to Europe going down for the last time." - Mark Dow, a hedge fund manager.



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Be Careful

Kick Lynas Back To Australia

On Friday 26 of the 27 European Governments have agreed to give up part of their sovereignty in their budget planning (tax and spending). UK is the only country that has opted out.

Some have viewed the EU Summit as just another plan to make a plan. Details are missing except vague phrases. But the US and European markets gained between 1.5% to 3% with the hope that there is a planned large scale QE in the pipeline. More money will be printed in Europe to avoid a possible Euro-zone breakdown.

I choose to consider any rebound as short-term. I am still talking about a wave 2 of major wave C rebound. It is possible for wave 2 to end at this level as shown. A small 'Double Tops' pattern.

Or it may proceed to form a higher degree 'Double Tops' reversal pattern with 5 sub-waves run-up. The run may be able to last until mid January 2012.

Be careful.

Wave of Clark Little

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A Greek Tale

Greece lawmakers approved 2012 austerity budget yesterday with a overwhelming 258 - 41 majority in the 300-seat Parliament. The budget foresees a fourth year of recession. Economy is expected to contract 2.8%.

Earlier in the day there was violence outside the Parliament caused by about 2,000 student. With unemployment reaching 18.4% in August, it is hard for the youth to get a job. Unemployment plus high food price, Greece is expected to have more violence in 2012.




The next worry is the possibility of a "Bank Run". Worry about their country will be kick out of the Euro Zone, Greeks have been removing 100% of their savings from Greek banks. At the start of 2010 total savings and deposits with the banks was about Euro 237 billions. The amount has dropped to Euro 188 billions by August 2011. Since August the decline started to accelerate. Savings fell by Euro 5.4 billions in September followed by another Euro 8.5 billions in October, a record in a single month.

For more story, click Panic in Greece

The storm has yet to start.



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All eyes on Europe

Asia stocks closed about 1.5% with optimism ahead of this Friday's European Meetings.

However, things changed within hours, by the time the US market opened, the headline becomes 'Wall Street Slips as Hope Dims For Europe Deal'. Dow drops about 0.5% after 1 hour of trading.

Short-term swings can be that unpredictable.

Technically the Option 2 scenario is of higher probability as shown below.




Minimum target is 12,303, the high of mini-wave i. Maximum target is 12,928 for a 100% retracement for wave 2 before the wave 3's plunge.

In this Friday, France and Germany will go all out to create a legally enforceable "fiscal union" for the Eurozone that can effectively end the solvency crisis. "What we want is to tell the world that in Europe the rule is that we pay back our debts, reduce our deficits, restore growth" said Nicolas Sarkozy, France's President.

But it is going to be an uphill task to get the whole EU to adopt centralised controls over how individual countries set their budgets and how much they can borrow. There were talks that British would resist the "fiscal union" proposal.




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Email from a friend - Irony of Life

Most 'First Class' students get technical seats, some become Doctors and some Engineers



The 'Second Class' pass, and then get MBA, become Administrators and control the 'First Class'




The 'Third Class' pass, enter politics and become Ministers and control both.



The 'Failures' join the underworld and control all the above.




And those who do not attend any school become
Swamis and Gurus and Everyone goes to them.






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I really like this

Mohd Arshad Raji, "I saw a Hindustani look alike lady at the top of her voice and gesturing aggressively at an audience that seems to enjoy the antics of the lady."

Click Shahrizat in Defence of NFC for more.




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Dow - Same old question,"Has wave 2 ended?"

When I thought I could rule out the option 2 mentioned in my November 17 post, the 490 points surge on Wednesday has restored this option 2 scenario as shown below.


Yesterday the 4.2% surge stayed short of breaking the upper trend line. Once it is broken, Dow is likely to go for another 800 points run for a 100% retracement to form a 'Double Tops' reversal pattern. That may mark the starting of the wave 3 bear run.

Some have ask, "Can this be the bottom for Europe?"
Nobody can rule out this possibility. In another 12 months time when we look back, then only we know. At this moment when 'there is a strong possibility that the Euro will collapse and Europe will disintegrate' can be the worst time for the European markets especially if both Euro and Europe can survive.

But chart wise, I still like to maintain the major wave C scenario until such time that it can be ruled out.

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