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Where will Dow go from here?


Kristianto

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Money continues to flow out of defensive and into cyclical stocks

 

This week's market moves will be focused on headlines from Eurozone, with Dutch election and German Constitutional Court ruling on European Stability Mechanism.

 

Market expects a POSITIVE outcome on Europe on both events in order to keep sentimen in bull's camp!

 

Fed will not act before US elections so DO NOT EXPECT any form of QE!!

 

(Got this free idea from Saxo www.tradingfloor.com)

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The Dow continues to confound. Despite lacklustre US economic perrformance, it keeps going up. True, corporate profits have been good, if mixed, but I don't think it can last.

Europe's woes, contraction in Asia and the US's own debt problems don't justify market optimism looking forward.

 

US markets always surge in election years. QE3 might also help it along, though I suspect that is a game of ever-diminishing returns. Tech stocks are driving most of the optimism, and the NASDAQ is looking like a bubble to me. I'm very doubtful the DOW can push through all-time highs of 2007, though it might get close and 14000 does look possible.

 

My prediction: US stock indexes will keep edging up (assuming Europe doesn't implode anytime soon) until the elections, then stall, before a major fall 2013 when the fiscal cliff is hit. That's when I'll be shorting futures, and waiting for the bottom to buy back into stocks.

 

Disclosure: I'm a bear and not optimistic the west can sort out its economic mess anytime soon. Apart from some defensive, high dividend stocks, I try not to hold stocks long-term anymore. If I'm up 10% after a few weeks, I'm looking to sell. It means I miss out on some good runs, but I don't trust greed anymore.

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The Dow continues to confound. Despite lacklustre US economic perrformance, it keeps going up. True, corporate profits have been good, if mixed, but I don't think it can last.

Europe's woes, contraction in Asia and the US's own debt problems don't justify market optimism looking forward.

 

US markets always surge in election years. QE3 might also help it along, though I suspect that is a game of ever-diminishing returns. Tech stocks are driving most of the optimism, and the NASDAQ is looking like a bubble to me. I'm very doubtful the DOW can push through all-time highs of 2007, though it might get close and 14000 does look possible.

 

My prediction: US stock indexes will keep edging up (assuming Europe doesn't implode anytime soon) until the elections, then stall, before a major fall 2013 when the fiscal cliff is hit. That's when I'll be shorting futures, and waiting for the bottom to buy back into stocks.

 

Disclosure: I'm a bear and not optimistic the west can sort out its economic mess anytime soon. Apart from some defensive, high dividend stocks, I try not to hold stocks long-term anymore. If I'm up 10% after a few weeks, I'm looking to sell. It means I miss out on some good runs, but I don't trust greed anymore.

 

Well spoken. I aint being any expert but the global economy has been forecast since years ago that it can't keep goin' the way it's been goin' forever. A debt creatin' money system (Reserve Banks) and many other factors of course contributin' to the present situation of which can be referred to as "yes... the cracks are now startin' to show".

 

Respectfully,

Callahan <):)

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Market Review: Persistent worries about the US “fiscal cliff”

 

SaxoBank UK, Saxo Capital Markets UK

 

Forex: EUR trading mostly higher

 

The EUR is trading higher against the USD and the JPY. Investors are keeping a close eye on developments concerning the outcome of the US budget talks after the House Republican leaders earlier cancelled a vote on a “Plan B” to avert the “fiscal cliff”. Market participants are expected to remain on the sidelines amid a holiday week and few economic releases globally. The EUR is trading 0.3 percent and 0.2 percent and 0.6 percent higher against the USD, the GBP and the JPY, respectively.

 

The AUD has lost 0.1 percent versus the USD.

 

 

US Stocks: Futures trading lower

 

The Dow Jones futures have lost 0.2 percent and are trading at 13105, while the S&P 500 futures have declined 0.3 percent to trade at 1422.3 as cautious investors await the year-end outcome of the US "fiscal cliff" deal.

 

Alexza Pharmaceuticals (ALXA) tumbled 10.2 percent in the after hours trading session on Friday, despite its announcement that the US Food and Drug Administration has given approval for Adasuve, its treatment for schizophrenia and bipolar disorder.

 

Approval of a buy back plan of around USD 30.0 million worth of American Depositary Shares from its board of directors led Pactera Technology International (PACT) to advance 3.3 percent in the after hours trading session on Friday.

 

Macro Update

 

Japan’s Abe pressurises the Bank of Japan to adopt a new inflation target

 

House prices in the UK continue to decline in December

 

US President, Barack Obama, presses for a smaller “fiscal cliff” deal

 

Surplus “possible” if economy delivers, says Australian trade minister

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