Many would have thought that the Ukraine war has nothing to do with the World's stock market performance but judging from today's market response, this is not quite true. The Europe and US futures are down by more than 1% and Nikkei shed about 3% for 2 hours of trading. Whether they will recover is a matter to be observed later.
Why Ukraine war has such effect? For this, we will have to examine what affect it will have on Russia. Russia's economy has not been performing well since 2011 with ruble falling from about 28 to 1 USD to now about 36 to 1 USD. It is estimated that this Ukraine war will cost Russia about 3% of its GDP and don't forget Russia is the one of the largest creditors of US debts.
"The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal"
This warning came a bit too late. The US markets and other World markets have been "blown" out of proportion and the bubbles are so big that when they burst, they will take Fed, ECB and many economies down the alley..Fisher has been a critic of QE all along
The bearish harami candlestick appeared on Wednesday was not confirmed on Thursday; instead, DOW rose in Thursday and Friday despite Germany and the Europe sectors were having terrible time. The trading volume was pretty low in the last 2 sessions which appear to suggest that DOW might not be ready to take the plunge. As DOW approaches its last peak or plunging toward the neckline, we would like to see heavier trading volume as shortists or longists taking cover as a confirmation..
Post by stockpicker on Mar 14, 2014 15:09:08 GMT 7
DOW was down but not out totally until it goes below 16,100 which is presently providing the support.. it would also have to break the base of ichimoku at 15923 and then the other support at 15,700 before it test 15,350 and the neckline.. so there is still a lot way to go.. meantime, Shanghai, Hong Kong and Singapore markets already in bear territories and Germany and Tokyo soon to follow, they may put pressure on the US markets.. The present technical chart for DOW is not looking too healthy..
Post by stockpicker on Mar 16, 2014 20:25:36 GMT 7
Many US Analysts were expecting FED to continue with the tapering in the FOMC next week. Some said the tapering might continue until QE is zero if the economy continues to improve; some said if the tapering is as announced, the stock market would not be affected much as tapering has been priced in the market
Chartwise, DOW has broken the minor support on 16,100 and it will want to test the 15,700, failing which, test 15,350 and then the neckline. As the trend is going down, it is unlikely that DOW will make attempts to scale new high unless there is a sudden change for example, FED announces to hold or reduce the tapering..
Post by stockpicker on Mar 16, 2014 21:36:21 GMT 7
Someone sold off about USD$104 biln of US Treasury on 14 March. No one appear to know the seller. Some speculated that it might be China and some said, Russia. Lets hope this will not cause big problem for market
Post by stockpicker on Mar 20, 2014 11:19:36 GMT 7
Yesterday, Yellen spoke for an hour but the analysts only heard 3 words..."in 6 months".. and the market started selling off. Someone showed a chart predicting to what level the US's interest rate will rise..
The US stock market has turned back up.. this is really gruesome for the shortists who have expected all to fall when Yellen spoke about possibility of interest rate hike early March.. but now the same person said.."No No.. the job market isn't ready". The stock market went back up...Yellen spoke like a six year old kid.. "don't want to play liao". Lets see where US market will go..It has bleached the last high of 16,453, now aiming for 16,576. This will prolong the head and shoulder pattern formed since Nov 2013.
Interesting development in the US market. The jobless claims has increased and the rest of the economic reports were not exciting, yet the stock market remains resilient. DOW and S&P went flat last night. It was said that the investors were waiting for tonight's job report. Technically, the chart is not supporting the wait as there was diminishing volume traded across the board over the month as DOW climbed. Although the OBV climbed in the last week, it wasn't strong enough to create a mark that one could assume that DOW was ready to break the resistance @ 15,576, the last high. If the job report tonight did not see a break-through, US market will start to see a fall beginning to form. The US markets will need "opium" to keep it going..