Daily Market Summary & Analysis, SEPT 14, 2010
September 14, 2010
Posted by on
Today the Asian markets closed mixed. The Shanghai Composite Index up +0.01% to 2,688.52; the Shanghai 180 A share index up +0.12% to 6,204.21; Taiwanese market TWSE, up +0.51% to 8,132.60; Hong Kong Hang Seng, up +0.17% to 21,696.04; Singapore STI down -0.59% to 3,048.65; Nikkei down -0.24% to 9,299.31; South Korea, the Kospi down -0.20% to 1,812.25; Australia (the S&P/ASX 200) up +0.25% to 4,626.46; and India market, the S&P/CNX 500 up +0.32% to 4,828.55. The Japanese yen rallied to a fresh 15-year high against the dollar in today trading session. Prime Minister Naoto Kan beat his rival Ichiro Ozawa, reducing the likelihood of Japanese government currency intervention.
In the U.S. front…
August retail sale was surprisingly good, up 0.4% versus expectation of 0.3 in July. This is the best level in five months. Uplifting news also came from Warren Buffett, the best investor of all time. “We are not going to have double dip recession, companies in Berkshire Hathaway Inc. portfolio are growing,” said the Great Buffett. However, Wall Street still seemed to be confused with conflicting comments from powerful market participants. Nouriel Roubini, or the famous Dr. Doom still has a 40% chance prediction; Pimco co-founder, Mohamed A. El-rian and CEO of Bank of America, Brian Moynihan both see 25% risks of the economy going into a double-dip recession. This early morning Goldman Sachs analysts also came out with a more cautious note, advising investors to get more defensive on U.S equities. The firm recommend “relative safe sectors” such as telecom service and consumer staples; but lowered rating for the industrial and energy. Steve Barry, chief investment officer at Goldman Sachs is more optimistic about opportunities outside the U.S., citing emerging market are the engine of growth.
UniCredit analysts’ call noticeably moved the market Tuesday. Gold enjoyed the biggest one-day rally in four month, due to UniCredit firm upgrade target for the precious metal from $1,250 to $1,600 by the end of 2012. Market Vectors Gold Miners ETF, GDX up +3.55% to 54.88; SPDR Gold Trust, GLD up +1.98% to $124.02 . Other reasons for today surprising rally for gold and other precious metals are that German investor confidence tanked to its lowest level since February of 2009. Worries about global currencies caused investors to flight to “safe-haven” assets. In addition to that up-demand from India due to seasonal reasons also caused gold and gold-related- stocks to a record high. Silver and platinum are also on fired, iShares Silver Trust ETF (SLV) up +2.61% to $20.05 and ETFS Physical Platinum Shares ETF (PPLT) up +2.43% to $158.60.
Nasdaq up almost 8%; it’s the best percentage one-month gain in a year. Some profit taking seen today is to be expected. All major indexes finally lost some steam into the closing bell; the DOW closed down -0.17% to 10,526.49; Nasdaq slightly up +0.18% to 2,289.77; and the S&P 500 down -0.07% to 1,121.10. Clearly,
the S&P 500 strong resistance is June high at 1130 range. If the market can lift this important level up, we will have a potential “Triple Top break out” from June high, August high and September high. The potential targets from this break out are 1150, 1160, and MAY high at 1170s range. Traders seemed to go short rather than long near resistance in today trading session. Next support levels are the 200d-MA at 1115.74, the 50d-MA at 1189.38, and the 20d-MA at 1082.08. Let’s give the market time to consolidate and wait for a high probability set up rather than playing yo-yo trades at this time.
Best regards to all, and good luck in your trading.
Disclosure: No positions in stocks/ETFs mentioned at the time of writing.