China 'hot money'

A torrent of speculative capital is handcuffing China's efforts to fight inflation and casting doubt on its willingness to allow its currency to continue increasing in value — something U.S. manufacturers have long sought.
Undocumented "hot money" is sneaking past China's official controls through a variety of channels, including phantom trade involving no real goods, and foreign companies padding investment receipts. Estimates vary as to how much cash has made its way into the fast-growing Chinese economy.
But today's hot money is still potentially dangerous. It's coming from investors making the safe bet that China's undervalued yuan — up more than 21% in the past three years against the dollar — is certain to rise further. And it's going into Chinese real estate and stocks, which could suffer sharp price declines if investors ever all changed their minds.
Inflation emerged about a year ago, and last month increased to 7.1%, well above the government's 4.8% target. Central bankers normally fight inflation by raising interest rates. But doing that would only attract more speculative capital.
China also could curb inflation by allowing the yuan's value to increase more quickly, effectively making imported products cheaper. But unless the yuan were suddenly revalued by a large amount, perhaps as much as 20%, investors would only be encouraged to bet more money on a continued increase. Plus, a stronger yuan would hurt exporters by making their products more expensive in world markets.
Tracking the Dow on Wednesday,30/07/08 PIVOT WEEK
9:30am--60.0 points Gap Up.
The SEC extended its temporary rules to restrict naked short selling on several financial stocks and President Bush signed the housing bill into law that includes support for Fannie Mae (FNM) and Freddie Mac (FRE).
10:30am--Hangman & Shooting Star.
Open a SELL,short position.An unexpected increase in jobs while President Bush signed the housing bill into law.
11:30am--A shooting star.
Crude prices rebound from a decline of 0.9% to a gain of 1.0% following the government's energy inventory data.
12:30pm--The Hammer.
The indices are near the session MAV.The Fed is extending the length of its Term Securities Lending Facility program through Jan. 30 and is introducing longer terms to maturity for its Term Auction Facility. The facilities were implemented to improve liquidity during the recent credit market turmoil. The Fed's latest move was spurred by "continued fragile" markets.
1:30pm--Bearish engulfing.
The main candlestick at this moment has a long upper shadow with a bullish shaven bottom.Buyback and close position.
2:30pm--Bulls spike up.
It's heading towards the MAV.Gold is under selling pressure, falling 2.1% or $17.94, to $896.50 per ounce
3:30pm--MAV Breakout.
The rebound in oil prices helped the energy sector make a 5.6% advance. Investors have rotated out of the energy sector in recent sessions, but oil’s rebound induced buying in large names like Exxon Mobil (XOM 84.38, +3.48) and Chevron (CVX 87.26, +4.42).
4:00pm--A bullish hammer and a bull trap.
Investors looked past a strong rebound in crude prices to focus on data that showed an unexpected gain in nonfarm private payrolls and word that the Fed extending its liquidity measures to Wall Street.
It's a 2nd day running,and the bulls will need a pause on the 3rd day.

WTO talks collapse.

Trade officials said in Geneva yesterday that a high-level summit to salvage a global trade pact collapsed, after the United States, China and India failed to agree on farm import rules.
Trade representatives of about 30 countries have been trying to break the deadlock over the Doha round of talks at the WTO headquarters in Geneva since July 21. The talks were scheduled to end on July 25 but have continued because no agreement could be reached.
Tracking the Dow on Tuesday,29/07/08.
9.30am-Gap Up 60.0 points.Merrill Lynch's latest write-down and share sale hinted at a possible turning point in the credit crisis.10:30am--Inverted hammer,bullish.Stocks were also helped by data showing the rate of monthly price declines in the U.S. housing market is slowing.11:30am--Holding at session High.No sign of gap filling,so open a buy position.A separate report showing the mood of American consumers improved for the first time in six months in July.12:30pm--Bearish pullback.Index still held at the High.U.S. crude prices dropped more than 2 percent, relieving some concern about inflation and consumer spending and brightening the outlook for a wide range of companies, including retailers and airlines.1:30pm--Bullish spike up.Merrill Lynch jumped nearly 8 percent after coming into trade on the defensive after the brokerage said late on Monday it will write down $5.7 billion and raise $8.5 billion by selling new stock.2.30pm--Bearish pullback.Sell,close position.This is a second sign of pullback near session high.3:30pm--Bulls spike up again.Financial shares were also helped by expectations that the Securities and Exchange Commission would extend an emergency rule banning so-called naked short selling later on Tuesday in 19 companies including Fannie Mae ,Freddie Mac ,Citigroup ,Goldman Sachs and Merrill Lynch.4:00pm--Spinning Top.A bullish white bar closing at the day's high.Are the short sellers making a comeback again and setting the bulltrap again? Guessing.
Merrill Lynch, AMR, US Steel, Colgate Palmolive among big movers on the stock market Tuesday .The bullish harami will continue in the following day.

Bush inheritance of budget deficit.

The US government's budget deficit will surge past a half-trillion dollars next year, according to gloomy new estimates, a record flood of red ink that promises to force the winner of the presidential race to dramatically alter his economic agenda.
Good luck to the new president would be Democrat Barack Obama or Republican John McCain.
That figure is sure to rise after adding the tens of billions of dollars in additional Iraq war funding it doesn't include, and the total could be higher yet if the economy fails to recover as the administration predicts.
McCain promises to renew the full roster of Bush tax cuts enacted in 2001 and 2003 and add many more for businesses and upper income people who pay the alternative minimum tax. The Bush tax cuts expire at the end of 2010 and renewing them would soon cost well over $200 billion a year. Eliminating the alternative minimum at the same time would cost almost as much.
Obama would repeal tax cuts on wealthier taxpayers and investors but would leave most of the Bush tax cuts in place while seeking additional cuts for senior citizens, the middle class and the working poor. And he also wants lots of new spending for health care, education and many other federal programs.
Monday's figures capped a remarkable deterioration in the United States' budgetary health under Bush's time in office.

Tracking the Dow on Monday,28/07/08

9:30am--Gap Down 50.0 points.
News that federal regulators seized two more failed U.S. banks late last week triggered this morning fear.
10:30am--Bearish Engulfing.
Fear of more credit and housing market turmoil battered financial shares and a mixed bag of quarterly results added to uncertainty the outlook for corporate profits.Open Sell position.
11:30am--Hangman,Bear & Graveyard.
A triple blow,session low.Candle pattern is a long bearish shaven top.Oil prices rose more than 1 percent on supply concerns, further unnerving investors and renewing some worries about inflation and consumer spending.
12:30pm--Bearish engulfing.
Still hoovering at morning session low.
1:30pm--Graveyard dojis.
Among the hardest-hit shares were Merrill Lynch down more than 11 percent; Citigroup off over 7 percent and Lehman Brothers down more than 10 percent.It's another session low,nearly 170 points down.
2:30pm--Inverted hammer.
Looks like a technical rebound but maybe shortlive in view of the long bearish bar.Buy-back and close position.
3:30pm--Hangman & bearish hammer.
Lehman Brothers Holdings Inc the fourth-largest U.S. investment bank, stumbled after a Merrill analyst said the firm may post a third-quarter loss and face a round of fresh write-downs on its residential mortgage portfolio.
4:00pm--Bearish Engulfing.
Closing at near day's low.

The sell-off came after a rally last week that lifted many banks' shares 40 percent or more.
According to a Bush Administration official cited in an Associated Press report, the next U.S. president will inherit a record budget deficit approaching $490 billion. The official said the deficit was being driven to an all-time high by the sagging economy and the stimulus payments being made to 130 million households in an effort to keep the country from falling
into a deep recession.

Bonds soared Monday as investors ran to a safe haven from the falling equities market. The two-year Treasury rose 08/32 to 100-11/32 for a yield of 2.57%; 10-year notes gained 24/32 to 98-30/32 for a yield of 4%; and the 30-year bond added 1-08/32 to 96-10/32 for a yield of 4.61%.

CS1300 index futures.

Contrary to speculation, the mainland's much-awaited first stock index futures trading on China Financial Futures Exchange in Shanghai is likely to be launched in January rather than sometime this year after the Beijing Olympics, according to a highly placed source in China International Capital Co (CICC), a major domestic investment bank.
The launch date of the CSI300 index futures is most likely to be the third Friday of January. The target date will be released this November or December, one or two months ahead of the launch.
"It's possible to launch index futures anytime after the Olympics," Li Kebin managing director of the financial futures department at Jinrui Futures Co. said. "After more than two years of preparation by both the exchange and futures companies and about two years of mock trading, there's no need for further delays."
The CICC source also said the introduction of hog futures may face problems of delivery difficulties because there are too few large-scale hog farms in China that can meet a delivery on demand.
HuYuyue, head of securities and futures institute of Beijing Technology and Business University said hog futures contracts may "serve more as a price barometer for breeders and food processors", helping stabilize wide swings in pork prices and push forward the process of restructuring China's hog industry.
Tracking the Dow on Friday,25/07/08

9:30am--A near 30.0 points spike up. The Commerce Department reported that orders sent to factories for big-ticket manufactured goods such as cars, appliances and machinery rose by 0.8 percent in June, the strongest gain in four months and well ahead of Wall Street's expectations.10:30am--Shooting Star.New home sales dropped by a smaller-than-expected 0.6 percent. While it marked the seventh decline in the past eight months, it stirred some hope that the housing market could be finding a bottom.11:30am--Hammer the bottom.Many financial stocks fell again as investors worried about the health of their balance sheets given the weakness in the housing sector.12:30pm--Spinning doji morning star.Double Bottom.Juniper Networks, the maker of networking equipment, reported a 40 percent increase in earnings for the second quarter, helped by a new product line. The stock surged $4, or 18 percent, to $26.57.1:30pm--Hangman.Fannie Mae and Freddie Mac declined after credit ratings agency Standard & Poor's put the risk-to-government, subordinated debt and preferred stock ratings of the government-chartered mortgage companies on watch for possible downgrade. 2:30pm--Technical Rebound.Candle pattern is now a small white body with longer upper shadow and shorter bottom shadow.3:30pm--Morning star.After earlier 2 attempts to test the MAV,another rebound starts here.4:00pm--Failed to touch MAV.A spinning doji,continuation of market push.Whether or not any bubble has burst, Americans now live in an economy where the prospect of a gallon of gas for less than $4 is cause for relief.
That barrier may be broken as early as this weekend, as a two-week nosedive in crude prices begins to ripple out to gas stations nationwide.
The national average for a gallon of regular pulled back to just above $4 a gallon and oil tumbled to its lowest point in weeks Friday on the belief that prices have yet to reflect just how badly demand has deteriorated in the United States, the world's thirstiest oil consumer.The Dow is just near to the MAV of the 52 weeks chart.It's heading North very soon.

Sell Oil,Buy Stocks.

The oil rally, once in overdrive, has run out of gas, igniting a stock-buying binge.

Lower oil prices have also lessened fears that inflation would spiral out of control.
Oil is the key driver of the stock market right now

Big investors, such as hedge funds and pension funds, pulling money out of the oil market amid signs of weaker demand in the USA and overseas. The Energy Information Administration said Wednesday that gasoline demand fell 2.4% the past four weeks, a sign higher prices are cutting into usage.

Tracking the Dow on Thursday,24.07.08
9:30am--10.00 points gap down.

A mixed opening loomed for stocks Thursday as investors digested a sharp drop in Ford profits, strong results from Amazon.com, and awaited word about the strength of the troubled housing market.

10:30am--1st Hour low.Technical rebound with hangman seen.

Main candle,a near shaven top with a 100.0 points long black candle.Any rebound shortlive so no action taken.

11:30am--Small bullish hammer at 2nd hour low.

The Labor Department reported that new unemployment claims rose to a much bigger-than-expected 406,000 last week, a level not seen since hurricanes devastated the Gulf Coast in September 2005.

12:30pm--The bears still pressuring near the morning session low.

Oil futures rose 36 cents to $124.80 in electronic trading.

1:30pm--Mutiple hangman

Ford reported a huge $8.7 billion net loss for the second quarter, and said it would restructure its North American product line to include more of the more fuel-efficient vehicles now made in Europe.

2:30pm--Bears continue hammer.

It's session low again.Also driving down stocks was a report from the National Association of Realtors that showed homeowner sales fell 2.6% to a lower-than-expected 4.86 million annual rate in June.

3:30pm--The bears growled.

It hurts,it's bleeding.Economic weakness put a damper on a strong recent run by financial shares, as investors worried that the longer the weak economy drags on, the longer the credit crisis will be exacerbated.

4:00pm--Day's low end with a bearish candle.

Renewed fears about the battered housing market and rising unemployment sent stocks into a tailspin Thursday.

On the whole the market is still in the bull county and today's market is another overdone intentionally by the shorties.

They might be capitalising on the Asian market indicies of which most will be expiring next week month's end.The rollover of contracts for Asia starts Monday.That's a smart move,very deceiving.

Short-sellers.

An emergency order by Wall Street regulators to combat "bear raids" on vulnerable financial stocks, launched by traders that profit when stocks go down, goes into effect last Monday.
But the rule's main intent — to help stem quick, steep stock declines that create financial panic — actually kicked in right after the Securities and Exchange Commission announced investor protections on last Tuesday night.
Wall Street pros credit the ruling, which makes it harder to engage in a trading technique known as "naked" short selling, with helping fuel a 534-point three-day rally on the Dow Jones industrials and a 21% gain for the S&P 500 financial sector.
The SEC crackdown targets short sellers, who hope to make money by selling borrowed shares and buying them back at lower prices. A naked short sale occurs when the trader does the trade without actually borrowing the shares, which can intensify the downward pressure on a stock.
The SEC order requires short sellers to take possession of the stock. Previously, a short seller could simply ask a broker to locate the shares, which made it easier and faster to profit in a falling market.
The SEC's move is designed to combat what critics say are the rumors, market manipulation and runs on stocks similar to the events that led to the demise of investment bank Bear Stearns in mid-March.
It also likely prompted traders involved in naked short selling to reverse their bets by buying back shares — pushing stocks up sharply in the process.

Tracking the Dow On Monday,21/07/08
9:30am--40.0 points gap up.
Bank of America (BAC) reported earnings of $0.72 per share.Yahoo! (YHOO) reached an agreement with Carl Icahn.
Unfortunately,a hangman & shooting star seen.
10:30am--Gap up filled back.
June leading indicators fell 0.1%, which is in-line with expectations.Candlestick is now a Graveyard Doji.Open to sell.
11:30am--Three black crows.
Merck (MRK 36.55, -1.13) acting as a major drag and Schering-Plough (SGP 19.71, -1.73) are under selling pressure after the companies delayed their earnings reports from this morning to after the market's close.
12:30pm--Bullish morning session retracement to MAV.
AIG (AIG 27.12, +2.05) is outperforming this session after being upgraded to Buy from Sell at Banc of America. BofA feels that AIG's reward versus risk has become very attractive.
1:30pm--Tristar and shooting star.
Close sell position.Crude oil prices have a gain of 2.4% at $131.74 per barrel.
2:30pm--Bears in session low.
Merck (MRK 35.06, -2.62) and Schering-Plough (SGP 18.13, -3.34) are now trading at session lows. The study indicates that the cholesterol drug doesn't lower the risk of major heart valve problems.
3:30pm--Main candlestick is now a bearish spin.
Market particpants will be busy after the close and before the open tomorrow, with a barrage of earnings reports from more than 90 companies.
4:00pm--Doji star,spinning top.
Big swing in the coming session.

The stock market posted a slight loss near the unchanged mark on Monday. A rise in oil prices and a steep drop in shares of two major pharmaceutical companies overshadowed a better-than-expected earnings report from one of the world's largest financial firms.
Overall the uptrend is still intact.

China breaking trade rules.

The World Trade Organization made public its first official condemnation of Chinese commercial practices on Friday, releasing a February ruling that sided with the United States, the European Union and Canada in a dispute over car parts.
The verdict -- findings of which were obtained by The Associated Press five months ago -- found that China was breaking trade rules by taxing imports of auto parts at the same rate as foreign-made finished cars.
In the sweeping decision, the three-member WTO panel ruled against China on nearly every point of contention with the U.S., the 27-nation EU and Canada.

Tracking the Dow on Friday:18.07.08

9:30am--A 50.0 point gap-up.


The market was clearly pleased when Citigroup Inc., while reporting a second-quarter loss Friday morning, beat analysts' forecasts and joined Wells Fargo & Co. and JPMorgan Chase & Co. in delivering stronger results than the market anticipated.


10:30am--Bullish harami.
Early gap up has been filled by the bears and has completed the session low.Buy-long position.
11:30am--A hangman.
Sell,close position for 1st session.Google's results were lower than expected, the result of the weakening economy hurting advertising revenue, while Microsoft missed forecasts by a penny. Also, AMD's chief executive stepped down after the chip maker posted a wider-than-expected loss.
1:30pm--Dragonfly and inverted hammer.
A barrel of light, sweet crude fell 41 cents to settle at $128.88 on the New York Mercantile Exchange.
2:30pm--Bearish hammer.
Pullback to day's MAV.
3:30pm--Ascending soldiers.
Rebound to near day's high.
4:00pm--Morning star.
Today is the expiry of Index futures.A short-covering day completed.

Wall Street closed out an impressive week with a mixed performance Friday after disappointing high-tech earnings punctured some of investors' enthusiasm over better-than-expected bank earnings reports.
The spinning top might be a sign of a temporary pause after this tremendous run-up.

A fragile US economy.

Despite the Fed's aggressive interest rate reductions and other fortifying steps,the fragile economy is facing "numerous difficulties" & "significant challenges".
All the economy's problems -- including slumping home values, which threaten to make people feel less wealthy and less inclined to spend in the months ahead -- represent "significant downside risks" to economic growth.
Over the rest of this year, the economy will grow "appreciably below its trend rate" mostly because of continued weakness in housing markets, high energy prices and tight credit conditions, Bernanke said.
"Given the high degree of uncertainty" about the Fed's economic outlook, Fed policymakers will need to carefully assess incoming information about inflation and economic growth, he said.
Tracking the Dow on 16/07/08.

9:30am--Flat starter.
Fed Chairman Bernanke is giving his semiannual testimony before the House Financial Services Committee at 10:00 ET, and the FOMC meeting minutes from the June 25 meeting are set for release at 2:00 ET.
10:30am--Candle pattern,a sword of justice.
Wells Fargo (WFC) reports better-than-expected earnings and raises its divided by 10%.Open buy,long position.
11:30am--Main Candle,white bar.
Hoovering near session high despite the bearish hangman.CPI is now up 5.0% year-over-year (consensus +4.5%) and core CPI is up 2.4%(consensus +2.3%).
12:30pm--Dragonfly doji seen.
Just hitting the wires, industrial production in June rose 0.5%, topping the expected 0.1% increase.
1:30pm--Bullish spike up.
Just hitting the wires, crude inventories for the week ended July 11 rose 2.95 million barrels, compared to the expected draw of 2.2 million. Crude prices were trading down 0.9% to $137.44 just prior to the release.
2:30pm--New session high,an unshaven top bullish candle.
Fed Chairman Bernanke is currently answering questions from Housing Financial Services Committee members.Of note, the chairman said the GSEs (Fannie Mae (FNM 7.91, +0.84) and Freddie Mac (FRE 5.93, +0.67)) are adequately capitalized and in no danger of failing. He went on to say that action by Congress is justifiable in order to raise confidence.
3:30pm--Another session high spike up.
The FOMC meetings showed that some Fed officials favored a rate rise very soon, fearing an "upward drift in long-run inflation expectations." Rates were left unchanged at the last Fed meeting, although there was a dissention that called for a rate increase.
4:00pm--Ascending soldiers.
A pause for next strategy.Close position.

On Wednesday, the financial sector soared the most in its 19-year history after Wells Fargo (WFC 27.14, +6.63) reported better-than-expected earnings, sparking a rally that was compounded by short-covering. As a result, the stock market posted a large 2.5% gain, as a steep drop in crude prices helped overshadow a disappointingly high inflation reading.
A prelude to the Dow Index futures expiry this Friday.A normal phenomenal rebound from its low.

Banks undersiege.

Banks and thrifts are struggling against a rising tide of bad loans, and it is becoming increasingly clear that some lenders won't be able to escape
Those gloomy scenarios could be avoided, however, if the U.S. economy and housing market rebound soon, which would help consumers and businesses that have fallen behind on their loan payments.
Even signs that the worst is over could bolster the confidence of healthier banks enough to spark a flurry of takeovers that would rid the industry of some of its weakest performers.
But at least for now, as the turmoil worsens, signs are emerging that consumers, who generally thought little about the safety of their deposits when times were good, are having some second thoughts. More likely than the kind of exodus of depositors that quickly sank IndyMac is what some bankers are describing as a slow-motion "walk on the bank," which could cripple financial institutions already weakened by credit problems.

Amid the steady drumbeat of bad news about banks, some depositors are already shifting money to institutions they consider to be better equipped to weather the storm sweeping the industry.

Tracking the Dow on Monday,14/07/08


9:30am--140.0 points Gap Up.
Fannie and Freddie will be allowed to access the Fed's discount window. Separately, IndyMac Bancorp (IMB) was taken over by the FDIC after a run on the bank prompted its collapse.
10:30am--Complete Gap Fill,Pullback.
Hangman seen.
11:30am--Bearish Dojis Spin
Difficult to open any position as a rebound will have limited range while shorting the market at already low end is risky.
12:30pm--A dragonfly doji.
The stock market drifts back toward its session low. Once again, financials (-5.1%) are the main drag, although there is selling interest seen across all ten economic sectors.
1:30pm--Double bottom.
A bullish dragonfly,buy.
2:30pm--Spinning Top.
Sell close position for small gain.
3:30pm--Spike up.
Treasury Secretary Paulson announced a plan that has three main parts: (1) to temporarily increase the line of credit that Fannie and Freddie have with the Treasury (2) give temporary authority for the Treasury to purchase equity in the companies and (3) give the Federal Reserve more oversight on the companies. Congress must approve the plan before it is implemented.
4:00--A four-legged doji.
Stocks to jump start again.

The Friday's bottom shadow has been covered,so now it's the turn of Monday's upper shadow.

Ms Dow & Mr Jones,for the first time.

Stocks tumbled Friday as investors focused on troubles at mortgage companies Fannie Mae and Freddie Mac and watched oil prices climb further into record territory. The Dow Jones industrials fell more than 200 points and slid below the 11,000 mark for the first time in two years.
A collapse of the two financiers would cause further shock to the financial system, and trigger more losses to banks and brokerages with significant holdings of mortgage-backed securities.
Citigroup Inc. announced Friday it will sell its German retail banking operation to France's Credit Mutuel for $7.7 billion.
Investors remain cautious about the entire financial sector, especially ahead of second-quarter reports due next week from major names like JPMorgan Chase & Co. and Merrill Lynch & Co.
Tracking the Dow on Friday,11/07/

9:30am--130.00 points Gap Down.
Shares of Fannie Mae (FNM) and Freddie Mac (FRE) are down in premarket action after reports suggested the government is considering taking over the lenders if their problems worsen. Oil prices are climbing, adding to early pessimism.

10:30am-- Bearish Spinning Bottom.
The May trade balance totaled a $59.8 billion deficit. Economists expected a trading deficit of $62.5 billion. The June import price index climbed 2.6% month-over-month.
11:30am--Bearish crows.
Oil has climbed above $146 per barrel in early electronic trading.
Main candlestick:Unshaven top with long black bar.
12:30pm--A bull harami.
GE announced this morning second quarter earnings results of $0.54 per share, which is on par with the consensus estimate.Open buy-long position.Look to sell at MAV.
1:30pm--Inverted hammer.
Fannie Mae (FNM 10.21, -2.99) and Freddie Mac (FRE 6.24, -1.76).Treasury Secretary Paulson stated that no bailout is on the horizon.
2:30pm--The dragonfly.
The June Treasury budget statement came in at $50.7 billion, which is appreciably more than the $34.0 billion that economists forecast. The May budget totaled $27.5 billion.Index spike up,close position here above MAV.
3:30pm--Double morning star dojis.
Stocks have made a sharp climb on word that Fed Chairman Bernanke stated the discount window would be open for Fannie Mae (FNM 10.17, -3.03) and Freddie Mac (FRE 8.35, +0.35), according to a Reuters source. The word gave investors reassurance that capital is available if the companies should need it. Stocks are now at their best level of the session.
4:00pm--Below MAV closing.
Stocks surrendered their gains.

Friday's candlestick has a long lower shadow depicting that it still has a chance of a foreplay before it steams again.Dow futures close next Friday 18th so more volatility ahead.


###For The First Time in the 21st century Wall Street has A moment like this - Kelly Clarkson

Inflation to cause global recession

Slower growth is spreading around the world with inflation being main threat to causing global recession, U.S. Conference Board said.
Vice President and Chief Economist of U.S. Conference Board Bart van Ark told a press briefing that with U.S. consumer confidence hitting the lowest level since 1992, and employment trends index showing no relief in short term, U.S. economy is in a solid slow growth mode, with little perspective to move much in rest of 2008.
Meanwhile, Europe and emerging economies in Asia are also showing significant slowdown in economy growth, he said.
Van Ark pointed out that the main downward risk comes from global inflation. While U.S. and European inflation trends may come down as demand eases, the global trend, in particular for emerging economies remains worrying, he said.
"Even after speculative bubbles burst, inflation rate may not come down to level before the increase," van Ark said. "Demand- supply mismatches will not be easily relaxed, and protectionist backlashes may distort global growth."
Established in 1916, the U.S. Conference Board is the world's preeminent business membership and research organization, best known for its monthly U.S. Consumer Confidence Index and the Leading Economic Indicators.

Tracking the Dow on Wednesday,09/07/08

9:30am--20.0 point gap up.
Crude prices are up 1.1% to $137.52 per barrel, which follows two consecutive sessions of steep losses.
Alcoa (AA 33.69, +1.36) reported a drop in earnings that met estimates.

10:30am--Evening stars.

The financial sector (-1.2%) is under selling pressure after its 6% advance yesterday.Main candlestick shape is a doji.

11:30am--Another shooting star.

Looks like a double top with a candlestick pattern of a bullish hammer.Sell-short position.

12:30pm--Three black crows having aerial tussle.

Boeing (BA 66.69, +0.77) and Northrop Grumman (NOC 66.09, -0.08) are going to recompete over the disputed air refueling tanker contract.

1:30pm--More evening stars.

Buyers have not shown much interest following yesterday's late session rally.

2:30pm--Hangman.

The main candlestick pattern is a black bar with unshaven bottom.

3:30pm--Hangman around the guillotine.

Market bulls are disappointed that there was no follow-through from yesterday's rally.

4:40pm--The Darkness.

A Midsummer Night's Dream (1999) oracle completed.
Stock market bulls are not happy with the market's performance on Wednesday. Stocks plummeted, led by weakness in financials and tech, giving up the market's entire advance made in the previous session. News was slow, with only one major company reporting earnings and no economic reports.
Let's see the double bottom here should translate into a rebound & short covering.

Oil Reserves and pricing.

US investor Jim Rogers has said that the decline in known oil reserves across the world is the main reason behind the skyrocketing oil prices that have already topped 145 US dollars a barrel.
"Nobody has discovered any major oil fields in over 40 years, while known oil reserves are declining amid a situation that the demand is boiling," he said, adding that oil prices will no doubt go higher unless somebody finds a lot of oil quickly
"Nearly every oil company has declining oil reserves, nearly every oil country in the world has declining oil reserves," he said, noting that "the known oil reserve will not last 100 years."
Rogers said that he was "not good at short-term trading" and predicting the price trend in a short period, but it is obvious that oil prices "will maintain an upward trend over a longer period" because the conflict between oil supply and demand is a big problem.
Rogers blamed the US government for driving down the value of the dollar, saying that the US government should do something about the currency.
He said he has been "very vocal" about the US dollar policy and criticized its "mistakes" as having been printing a lot of money since last August and lowering interest rates dramatically.
All these factors have helped drive up the prices of the dollar- dominated crude oil, he said.
Noting that the sharp rise in oil prices will change people's lives, he said they have to change their lives "accordingly."
Rogers highly recommended the use of nuclear fuel, saying that it is cheaper and cleaner than anything else, adding "if you are careful with it, it is safe."
In September 2007, Rogers sold his mansion in New York City for about 15 million dollars and moved to Singapore, mainly due to his belief that this is a ground-breaking time for investment potential in Asian markets.
Tracking the Dow on Tuesday,08/07/08


9:30am--Small gap down.
It's Miss Fannie Mae & Mr Freddie MAC pulling the early breaks.Office Depot (ODP) shares fell sharply after the company reported a nearly 10% drop in North American retail same-store sales due to additional pressure from weakening business conditions in the second quarter.
10:30am--Early high followed gap cover.Doji spin at the opening candlestick shadow.
The National Association of Realtors' pending home sales index dropped 4.7% to 84.7 in May after a 6.3% surge to 88.9 in April, which was the biggest monthly increase since December, 2001.Noticed a bullish harami at this juncture,open a buy-long position.
11:30am--Bullish spin inside a bullish candlestick now at session high.
The dollar continued to gain strength and amid a broader selloff in commodities on concerns that worldwide economic slowing would continue to erode demand for oil and other fuels.
August WTI crude oil futures dropped $5.38 to settle at $136.04 a barrel.
12:30pm--Close morning session position,saw a shooting star.
Let's wait for any comments that use to appear at around 2:00 pm.
1:30pm--Main candlestick is a long white candle.
Looks risky to short the index despite the spinning graveyard dojis seen.
2:30pm--Bullish Harami.
Treasury Secretary Paulson said that while he expects there to be many more foreclosures before the housing slump ends, the 21.6% decline in inventories of new single-family homes since the 2006 peak shows the housing market is well into an adjustment period.BUY position.
3:30pm--Graveyard Doji & Hangman seen.
Close sell position. Richmond Fed President Jeffrey Lacker, a well known hawk, in which he said it makes sense to start raising interest rates as growth risks fade, as the Fed needs to keep on top of risks associated with persistent high inflation. He said he doesn't see a risk of recession in the recent economic data and noted that consumer spending has been supported by the tax rebates, while the weak dollar has helped exports.
4:00pm--The Evening Stars.
Looks like we're in a bull trap.

Tuesday's candlestick only light up half-heartedly of Wed 2 upper shadow.The light is still very dim.


Recovery in housing is still very slow and sluggish, which may not have hit bottom as cautioned by Richmond Fed President.

Virgin with lots of money.

Guess which place was China's second highest supplier of foreign direct investment (FDI) in the first five months of this year? With negligible foreign trade with China, curiously enough, it's British Virgin Islands.
With a population of merely 20,000 but registered companies exceeding 290,000, the famous global offshore financial center poured $7.39 billion into China in these past five months.
As a center of international hot money, quite a number of FDI coming from British Virgin Islands are merely hot money seeking a new destination for arbitrage purposes.
Although China's trade surplus has started to shrink this year, its foreign exchange reserves are growing at an ever faster pace. In April, forex reserves grew by $74.5 billion, the biggest one-month jump in the country's history. This amount equals half of the total reserve growth for the first three months of the year.
Going by a standard formula to calculate "hot money" - foreign exchange reserves minus FDI, trade surplus and interest income - the residual $44.2 billion can be assumed to be the speculative capital that China received in April.
Hot money is defined as the funds that flow into a country to take advantage of a favorable interest rate regime in order to obtain higher returns. They influence the balance of payments and strengthen the exchange rate of the recipient country while weakening the currency of the country losing the money. Such funds are held in currency markets by speculators, as opposed to national banks or domestic investors. Thus they are volatile and shift to another foreign exchange market at the drop of a hat in response to changes in relative interest rates.
map of the british virgin islands and british virgin islands map ...
Tracking the Dow on Monday,07/07/08
9:30am--A mild gap-up.
Uncomfortable news,Merrill Lynch (MER) may be closer to selling its stake in a few of its holdings to raise cash ahead of expected write-downs.
10:30am--Ascending Top.
No sign of gap filling back.A bit of caution.There's a shooting star,graveyard doji seen.
11:30am--A second graveyard doji near the top.
Credit Suisse (CS 42.12, -2.00) and UBS (UBS 19.44, -0.88) to raise additional capital, according to Reuters.Bad news again on subprime.Sell,short the market.
12:30pm--The suicide squad.
San Francisco Fed President Yellen stated that core inflation is likely to rise as businesses pass on higher costs to consumers and housing prices likely fall well into 2009. The confluence of inflation and depressed home values has a dampening effect on consumers' spirits as families spend more despite a diminished sense of wealth.
Close buy back position for the morning session.
1:30pm--Congestion,main candlestick bearish inverted hammer.
Depressed oil prices are lending support to the session’s buying in the absence of market-moving earnings reports. Crude futures are now below $140 per barrel, offsetting last week’s ascent.
Open buy,long position for aftrenoon session and look to sell at MAV or half way in between.Punting,scalping.
2:30pm--Spinning bottom with two bullish shaven ascending soldier.
The major indices remain entrenched in negative territory, led there by an ailing financial sector and held there by a dearth of leadership.The reversal in the dollar's earlier fortunes has helped oil prices bounce off lower levels. After hitting $139.50 at their low today, oil prices are back to $142.87.
3:30pm--The ascend.
Only the technology sector is sporting a gain, currently up 0.4%. Tech has been helped by shares of Yahoo! (YHOO 24.04, +2.69), which are trading higher on speculation of a possible major transaction.
Sell,close position at MAV.
4:00pm--Doji star at the bottom of bear.
An idecision as to direction of next day.It can dig another grave or make another short-covering.
A lack of concerted leadership during trading contributed to the broad-based declines Monday. Financials were the worst performer yet again. The financial sector had been up more than 1.0% early on, but fell to a loss of 4.0% in the afternoon. It closed 3.2% lower. Fannie Mae (FNM 15.74, -2.99) and Freddie Mac (FRE 11.91, -2.59) were two notable laggards in the sector. The two outfits encountered concerted selling pressure on chatter that accounting changes could force the companies to bring off-balance sheet assets on to their books, thus requiring large capital raises. Selling pressure eased, though, on the realization that Lehman Brothers noted the mortgage lenders would likely be exempt from the requirement.

Subprime sinks 2 China Banks.

Two large banks - Industrial & Commercial Bank of China and Bank of China - posted higher fourth-quarter profits on Tuesday, buoyed by the country's surging economy. But the state lenders were hurt by holdings in subprime-related securities in the United States.

Bank of China, hardest-hit among the country's big banks by subprime exposure, said it held $5 billion in asset-backed securities at the end of 2007, or 2.13 percent of its investment securities, and booked $1.58 billion in provisions and markdowns on the holdings.

The lender said, however, that it believed that it had booked sufficient provisions and did not expect to incur further losses if it unloads its subprime-related holdings.

Industrial & Commercial Bank said it held subprime-backed securities worth $1.23 billion at the end of December 2007 and booked $400 million as an allowance for potential losses on that portfolio.

Both banks said they expect comparatively muted loan growth this year, while Bank of China said it planned to step up overseas acquisition activity following a year when mainland Chinese financial institutions made several landmark investments abroad.

Tracking the Dow on Wednesday,02/07/08

9:30am--Small Gap-Up 50.0 points,

Mortgage applications for the week ending June 27 increased 3.6% versus a 9.3% decline last week. The ADP Employment Change report showed a loss of 79,000 jobs in June, compared with an expected loss of 20,000 jobs. Notably, the government's June unemployment rate will be released tomorrow.

10:30am--The bearish graveyard spin.

Factory orders for May climbed 0.6%, which is better than the 0.5% increase economists forecast. The Bullish gap-up being filled.Sudden spike up on the news.

11:30am--The bears strike.

The stock market continues to chop along, but has fallen lower as crude prices have moved higher. Each of the major indices are trading at their worst levels of the session.

12:30pm--The Dragonfly Doji.

Will retrace to the morning MAV.In a speech, U.S. Treasury Secretary Henry Paulson stated high oil prices are likely to prolong the current economic slump in the U.S.

1:30pm--Inverted Hammer.

Gold closed its session $1.90 higher at $946.40 per ounce. Gold, which is considered a store of value, often attracts buyers amid inflationary threats.

2;30pm--The Descend after touching the MAV.

Merrill Lynch downgraded shares of General Motors (GM 9.98, -1.77) and lowered the firm’s price target amid cash concerns. The assessment was released just a day after GM announced better-than-feared monthly sales results, which provided a spark during yesterday’s action.

3:30pm--Main candlestick is bearish inverted hammer.

Rising oil prices also continue to weigh on investors’ mood.

4:00pm--A full blown bear.

It's near the shaven bottom.Good sign of a spike up.

Stocks have dipped below their lowest closing prices of the year, they're still above their all-time lows of the year

The June labor report on Thursaday will be the decider of the next session.

Speculative Oil!

Oil prices broke the US$140 level for the first time this week, with August crude surging near US$143 a barrel on both New York Mercantile Exchange (NYMEX) and ICE Futures Exchange in London.
A report the US Congress released Monday showed that, in January 2000, 37 percent of the NYMEX crude futures contracts were held by speculative traders; but in April 2008, the number has soared to 71 percent. Meanwhile, the proportion of contracts held by commercial traders greatly declined.
The US Commodity Futures Trading Committee (CFTC) revealed in May that it began investigating potential price manipulations in the oil trading market in December 2007. The early findings show that since the sub-prime mortgage crisis large amount of speculation fund has turned to buy commodities like crude as a hedge against inflation.
Speculation theory was also echoed by the Wall Street. Hedge fund manager Michael Master testified on May 20 that his pals in the Wall Street are pushing up world oil prices through speculative investment in futures market. Moreover, he pointed out at the hearing held by CFTC acting Chairman Walter Lukken on Monday that with greater regulation oil prices could drop to the level of 60 dollars a barrel within about 30 days.
Three days later, just after the oil prices surpassed US$140 point, the US Congress approved a bill with a 402:19 vote that directs the CFTC to use its authority to curb speculation in the energy futures market.
However, some argue that "calling it speculation is way too simplistic"; or instead, speculation is more the consequence than the cause of a tight market.
When testifying before a US Congress panel on June 3, billionaire Soros admitted that there are "strong fundamental factors" while labeling the oil prices hike as a bubble largely made by investment institutions through index fund.
Tracking the Dow on Tuesday,01/07/08

9:30am--Gap Down nearly 100.0 points.
Stocks suffered as oil rose above $143 per barrel, a move blamed on rising tensions in the Middle East. Traders also cited an International Energy Agency report Tuesday that said the supply of crude oil is expected to remain tight.
10:30am--Full Gap recovering.
Buy-long position,a morning star.Main Candlestick,a shaven bearish top.
11:30am--Bearish harami earlier.
Sell-close position since it's abovethe MAV and a Triple top.
12:30pm--Morning star at 1st session low.
Open-long position again.
1:30pm--An inverted hammer seen.
Look to close at MAV since main candlestick is still in the black.
2:30pm--Breakout of MAV.
Close position.Too many bearish spin hoovering around.
3:30pm--Sudden spike up.
The U.S. ISM manufacturing index rose to 50.2 in June, a surprise increase from 49.6 in May.U.S. construction spending fell 0.4% in May, less than economists were expecting, after a 0.1% decline in April.
4:00pm--Bullish recovery.
The Dow dropped 14.4% in the first half of 2008; the S&P 500 plunged 12.8%; and the Nasdaq fell 13.6%. While June is often a quiet month, last month was one of the worst Junes on record, with the Dow's decline the biggest in percentage terms since 1930.
The spinning bottom should pave the way for stabiliztion unless otherwise another geo-political tension arises.