TOL as of May 13, 2012:-
Risk-Off ?
Everything dropped and it was a “Risk-Off” week.
Was the US$2b loss at JPM really that big a deal, when they are managing US$380b ?
Was the election results in Greece and France, really unexpected ?
Has anything really changed from 2 weeks ago ?
Do you know why you are Buying or Selling ?
The week in review:-
Commodities
1. Oil – Weaker. US$96 from US$99 last week from US$105 the previous week. Resistance at US$107 ?
2. Gold – Weaker. US$1586 from US$1636 last week from US$1663 the previous week. Record US$1920. Vested.
3. Silver – Weaker. US$28.89 from US$30.34 last week from US$31.25 the previous week. Range High: $48.58; Range Low: US$27.19; Resistance at US$38 ? Vested.
Equities
1. US Equities – Weaker. 1353 from 1369 last week from 1403 the previous week. Support at 1343 ? Resistance at 1420 ?
2. HK Equities – Weaker. 19965 from 21086 last week from 20742 the previous week. Resistance at 21350 ? Support at 20150 taken out. Next Support at 19000 ? No Trade.
3. Shanghai Equities – Weaker. 2395 from 2452 last week from 2396 the previous week. Support at 2285 ? Resistance 2460 ?
4. Spore Equities – Weaker. 2883 from 2991 last week from 2982 the previous week. No trade
5. Japan Equities – Weaker. 8953 from 9380 last week from 9521 the previous week. Support at 9250 taken out. Next Support at ? Resistance at 10130 ?
Currencies
1. JPY – Flat. 79.93 from 79.87 last week from 80.29 the previous week. The 52 week range is 75.62 to 84.17.
2. MYR to SGD – Weaker. 2.4523 from 2.4451 last week from 2.4586 the previous week. Bought some MYR. Upcoming GE a concern.
3. AUD – Weaker. 1.0024 from 1.0188 last week from 1.0467 the previous week. Vested
4. EUR – Weaker. 1.2921 from 1.3084 last week from 1.3251 the previous week.
5. HKD – Weaker. 7.7658 from 7.7607 last week from 7.7593 the previous week. 52 week range is 7.7521-7.7972. Vested
6. Dollar Index – Stronger. 80.30 from 79.50 last week from 78.71 the previous week.
Interest Rates
1. Yield on 10 Year Italian Bonds – Stronger; 5.51% from 5.43% last week from 5.64% the previous week; Record 7.483%.
2. Yield on 10 Year Spanish Bonds – Stronger. 6.01% from 5.73% last week from 5.88% the previous week. Line in the sand at 7.5% ?
3. Yield on 10 Year US Treasuries – Lower. 1.85% from 1.88% last week from 1.94% the previous week.
Risk-Off
1. Emerging Markets – Weaker. Outflows from Outflows last week from Inflows the previous week; http://www.epfr.com
2. Average Daily Turnover on HKEX – Stronger. HK$55b from HK$46b last week from HK$51b the previous week.
3. Sentiment – Weaker
4. Hedge Funds – No major redemptions
5. Deleveraging – This risk has been flagged for months. So why are you still afraid of it ?
6. Headwinds – European Contagion, Weak Economies of the DMs, Elevated Commodity Prices, Slower EM growth, Deleveraging, Lower Margins, Weaker Earnings, Falling Property Prices, Tighter Credit Requirements, Downgrades by Rating Agencies, Austerity Programs, Iran, Exports Shock, Fiscal Cliff , Demographics
7. Tailwinds – Low Interest Rates, EM Consumption, EM Demographics, Cash on Sideline, Cash in Corporations for M&A, Cash in short-term Bonds, Buybacks, Money-Printing
8. Risk Management – Are there other JPM typed of cockroaches out there ?
Others
1. Properties – Cant see how Chinese Properties can have a sharp rebound, when their government is so determined to bring prices down
2. Short-Selling & Buying Puts – Sold S&P Inverse ETF. No more short position on anything.
3. US Market Direction – Weaker
If the US Market wants to drop, then I should really be loading up on the S&P Inverse ETF.
Instead, I have decided to sell my existing S&P Inverse ETF. My gut feel is that the PPT and Helicopter Ben, would be doing their best to prop up the market.
Anyway, there has not been any new Headwind and all the current bad news are being churned by the bears, who have been wrong since October last year.
Going forward, I would probably be shopping, especially if it’s at a good Valuation.
The above is to help me crystallize my thinking. It’s not a recommendation to Buy or Sell. Use the above comments at your own risk and please do also feel free to provide me with your kind thoughts and comments
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