Best of the Week

Weekly Financial Markets Review -The Corrective Rally Continues - The Worst is Not Over !

Stock-Markets / Financial Markets Mar 11, 2007 - 12:08 AM

The week saw the Stock Markets rally, the Dow ended up at 12,276, FTSE 100 index at 6246. The asian stock markets, including China also rallied. In our analysis immediately following China's mini crash, I suggested that the Stock Markets would make a bottom during the week and start to rally towards targets of 12,525 for the Dow Jones and 6300 for the FTSE. Following which another down leg would begin. Stock Markets follow China Lower - What to expect next as China's crash continues in Asia 27th Feb 07.

Back to the week that was -

The plunge in Gold had caught many market participants off guard, so there was a flurry of activity in trying to determine whether the Gold bull was still in tact. The conclusion of which was that the fundamentals for the gold bull market were still intact. The most bearish picture painted for gold - GOLD Elliott Wave Analysis - Is Gold Really Safe? We Think Not , suggested that gold was headed much lower in the immediate term. Of many more bullish gold articles , Gold and Silver Bull Market Set to Continue - Six Reasons Why covered the key reasons of why Gold should continue to rise, despite any short-term weakness.

Speculation of a US slowdown and future Fed Interest rate cuts continued, however this is usually a cue for Gold and other metals to decline in price, in the article - Fed Signaling Future US Interest Rate Cuts - Gold to benefit , analysis suggests that Gold may rise strongly when the Fed starts to cut interest rates, the key reason being that the US dollar would fall sharply, leading to a sharp spike in most commodities as they are priced in US dollars.

The bulk of articles concerning the future direction of the Stock Market, concluded that there was more selling to come and that the current rally was by and large corrective. Stock Market Rallies after last weeks slump - The Worst is Far from Over! , The most bullish article was Stock Market Analysis - A Major Crash...or a Major Bottom?

The most significant factor impacting on the financial markets is the continuing bearish news concerning the US housing market due especially the impact of failures in the subprime mortgage sector of the finance sector (Subprime mortgages hit Banking sector and likely to lead to further Stock Market Falls) . The next wave of the US Housing Market Crash - Apartment REITs suggests a new wave of financial collapses are in the offing, as the housing crash spreads to the apartment REITs sector.

The article "The Quiet Energy Crisis as Mexican Crude Oil production tumbles", highlighted the precarious situation in Mexico's oil production industry, which has seen a fall in production fal by 500k bpd, this is already leading to rising gas prices in the USA, which look set to accelerate in the coming months.

On the Education front, several articles were published both from a technical and from a psychological perspective. The two that stand out the most are - Trading Doctor - When it All Falls Apart - Coping with Losses and The Secret to Successful Trading - Using Rules to Time Your Entry

Make sure to visit the site regularly for the latest analysis on the direction of the stock market this coming week, especially as the next leg of the China Mini-Crash, could just be around the corner.

Profitable investing & trading for the coming week.

By Nadeem Walayat
Editor, The Market Oracle

Comments

Post Comment (Moderated)

Subject:

Name:

E-mail address (will not be published):

Comment:

Commenting Issue - If on submitting you are returned to the main Index Page (50% chance) then your comment has not been accepted, Follow below steps for 95% chance of comment being accepted.

Click your browser Back button (from main index page).
COPY your comment text from Comment box (i.e. copy to clipboard).
Press PAGE Refresh - You should see the message "You are not authorized to carry out this operation"
Paste your comment back into the comment text box.
Click Submit - If everything goes okay you will remain on the article page with the message "Your comment was held for moderation and will be reviewed shortly".
If instead you are again returned to the main index page then repeat 1-5, alternatively EMAIL to comments @ marketoracle.co.uk quoting the article number.

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2011 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.