Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelertoing Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Global Stock Markets Turmoil on the Way?

Stock-Markets / Global Stock Markets May 14, 2012 - 04:59 AM GMT

By: Sam_Chee_Kong

Stock-Markets

Diamond Rated - Best Financial Markets Analysis ArticleStock Markets around the world have been on a roller coaster ride for the past couple of weeks. Poor market sentiments does not augur well for the markets either. From the oil embargo in the Middle East to the debt crisis woes in Europe added more volatility to the already fragile markets.


VIX or Fear Indicator

To get an insight into investor’s barometer or perception towards the market, the best indicator to look at will be the VIX or better known as the ‘fear index’. VIX or the Volatility Index Indicator measures the investor’s sentiment towards the market .A VIX reading of less than 30 means investors are feeling positive and complacent. And if it moves towards 50 and beyond means investors are nervous and indecisive and hence the markets are unstable. The higher the reading the more unstable the markets and in fact the historic high is during the height of the 2008 financial crisis which is about 89 points. The following is the VIX chart as of 12/05/2012.

What we can conclude from the above chart is that the VIX indicator had rebounded from its low in 16/03/2012 which is 12.66 points. It is now sitting nicely above both the MA20 and MA50. The last time the price is above both Moving Averages is during the beginning of October 2011.

Take a look at the chart during the October 2011 takedown in Stock Markets worldwide. At that time the VIX is trading at about 47.5 points. Since then investors sentiment had been improving until mid march this year.

As you can see there is a base building or consolidation from March till May this year and it already started moving out from its recent resistance at the 20 points level. This will signifies more negative sentiments among investors in the coming weeks. When it approaches the 30 points threshold, we will expect more volatility in global stock markets.

Global Stock Markets in a Nutshell

Now let’s take a look at the performance of different markets in a technical perspective, around the globe starting with the Dow Jones.

America - Dow Jones

We have yet to change our outlook on the Dow since our last analysis on 06/0502012. As the Dow is still hovering above the 12710 support line, there is still a chance for it to recover above the 13000 points level. But this time, our view is more bearish bias at the moment because bad news from abroad especially from Europe still weighed down on the Dow. Even with better than expected unemployment data, it failed to lift the market sentiment. Other factors that strengthen our negative bias towards the Dow are as follows.

  1. The MA20 days close below the MA50 days for the first time since October 2011.
  1. Secondly, notice the labels, which had been marked as 1,2,and 3. Those are the periods where the Dow closed below 13,000 points but anyhow it managed to rebound back above the 13,000 points level. Label 4 is the most recent close of the Dow, which is at 12,820 points. We will have to wait for confirmation of the trend in the next few session.
  1. Notice the Divergence in the RSI since the mid of March 2011 which somehow coincide with the rise in the reading of the VIX indicator. It seems like the bears will have an upper hand against the bulls at this moment.

Anyhow, what we perceive is that the Dow needs to hold on to the support at 12710. Breaking through the support will mean that the Dow will be testing the next support level at 11800 points.   

Europe – German DAX

European Markets are more at risk for further declines because technically most of the European markets are bearish biased because their MA20 are already below MA50. Most are looking towards breaking recent lows. Let’s take a look at DAX.

It has already broke away from the pack, where the support level 6548 holds. The next support level for the DAX will be at 6000 points. Most European markets are bearish from the technical point of view. We will expect more volatility in the European Markets with a bearish bias.

ASIA – Japan

We foresee profound weakness in the Japanese Nikkei 225. The Nikkei had been down for the last 10 days dropping a total of more than 750 points after breaking the support level at 9400. Although most indicators like RSI, MACD and Stochastic are in the oversold region, we don’t see any indication of a strong rebound any time soon. In fact we expect the Nikkei to further ease next week and test the next support level at 8750.

ASIA – Kuala Lumpur KLCI

Our outlook for KLCI remains the same as our prediction space last week. The absence of any divergence in the technical indicators augurs well for the KLCI. KLCI will be able to withstand this downturn better than most markets and in fact as of 11/05/2012, it close with a long leg hammer which represent strength As long as it doesn’t violate the 1560 support and also the MA20 don’t go below MA50, the uptrend in KLCI remains intact.

ASIA – Bombay Sensex 30

 

In line with our earlier prediction on 06/05/2012, Bombay Sensex 30 did in fact free fall since it broke off from the pack at 17050 to close at 16292. A total of about 800 points got wipe out. We will be seeing further deteriation in the Sensex with a chance for rebound towards the end of the week. It will be testing its next support at 15150 in the coming weeks.

ASIA – Jakarta’s IHSG

Again we are seeing the same old picture of Jakarta Stock Exchange except the overall technical has deteriorated. RSI has shown a divergence since end of March. Now Jakarta’s IHSG is at a critical juncture as it is now sitting on the support level. Any violation below this level will mean that the IHSG is going to have a big takedown which might bring it down to the next support level at 3900.

A look at most indicators revealed that there are not in the oversold region meaning more room to go down.

South America – Bovespa

 

The Brazilian Bovespa seems like it is already reaching an inter-mediate low. Positive divergence seen after the market took a dive from its support at 65000 towards the 59000 level which represents a loss of 6000 points. A market turn around is on the way for Bovespa next week as indicated by a Doji in its last day of trading last week.

However over the longer time Bovespa, still looks weak and more room to fall ahead as the gap between the MA20 and MA50 days are still wide.

Australia – ASX All Ordinaries

The ASX seems to have broken both the trend line and the MA20 and MA50 days on 08/05/2012. Technically, it seems bearish and the current support level is at 4330. Since most indicators not in the oversold region yet, we opine that the ASX will continue its weakness next week.

by Sam Chee Kong

Samcheekong.blogspot.com

cheekongsam@yahoo.com

    © 2012 Copyright  Sam Chee Kong - All Rights Reserved

    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules