China controls world's rare earth.

China has huge deposits of rare earth ores and (until very recently) little regard for the environmental impact of mining and refining them.

The U.S. used to be the world's biggest producer of rare earths. That ended in the '90s when the Mountain Pass mining operation in California shut down due to "market pressure" (i.e., cheap Chinese product). Environmental regulations also helped seal the mine's fate; rare earth mining can produce some pretty nasty byproducts like thorium.
China's the only one country on earth where the ores are refined into the rare earth metals.

Foreign companies aren't allowed to invest in exploration and mining.
As the US government pushes the automakers to improve mileage and cut emissions, they're practically demanding carmakers produce electric or hybrid-electric vehicles. Even though the government and industry know how important these rare earths are critical to their environmental goals, they've failed to consider the potential impact of a "rare earth" gap, trusting that the free market will provide the required raw materials at a cost-effective price.
Rare earth metals needed to produce circuitry in consumer electronics, such as smartphones, MP3 music players, liquid crystal displays, and advanced battery technologies.
China is considering banning the export of yttrium (used in color TV tubes and to halt corrosion in steel), terbium (used in lasers and semi-conductors), and dysprosium (used in high temperature magnets that are required for electric motors in vehicles).

China has large natural reserves of rare earth metals, mostly in Inner Mongolia and the global dominance in this area is the result of a 20 year plan to position China as the "OPEC of rare earth metals."

By flooding the market with the resultant cheaper products, China has made it unprofitable for companies and governments to operate the costly processing required in developed countries.

Tracking the Dow,Monday,31/08/09
(3 weeks to Triple Witching)
9:30am:--A 40.0 points bearish gap down.

A selloff in overseas trading especially China with the sharpest downturns.

10:30am:--A first hour low being checkmate by a morning star.

Shanghai Composite Index fell nearly 7% Monday as participants reacted to concerns that tighter lending practices will impede growth.

11:30am:--A technical rebound still holding at bear pivot.

Crude oil is trading 3.6% lower at $70.09 per barrel.

12:30noon:--The bears are not backing-off.

Participants are still taking profits to be prudent.

1:30pm:--Sign of bullish engulfing.

Famed analyst Dick Bove said that U.S. bank earnings will be dismal for remainder of this year, with continued losses for regional banks into early 2010.
2:30pm:--A bullish spike up.

Financial Times reported that the Federal Reserve has made a $14 billion profit on loan programs that provided funds to the financial system, according to Fed officials.

3:30pm:--A powerful dragonfly doji noted.

Weakness among stocks bled into commodities pits and sent oil prices down 3.9% to $69.92 per barrel.

4:00pm:--The bulls held the last minute card at the MAV resistance waiting for a bullish September opener.
Monday being end of August month which is also the pivot day of the Dow index futures ended with a low at bull pivot.

The two-bearish low,which normally requires three to complete the bear is an exception here.

A reversal is on the way.

The China effect being the epicentre of trembling sent shockwaves throughout the world's financials.

But the ghost will be busted soon and there comes the mid-autumn lovely moon cake festival.

Chinese Hungry Ghost Month.

Stay away from chinese stocks during the Chinese ghost month while the Americans will say stay away from Halloween before you get bumped.
In Thailand it's called the "Tay Krachaat" festival.
The photo shows how the chinese burn the paper effigy of the ghost and the house.
Apart from burning paper incense,heavenly paper money is also being burnt.
No wonder chinese stock got burnt badly this month.
For the Chinese, the month of the Hungry Ghosts or Spirits - usually in the month of August - is the most inauspicious time of the year. Taoists believe that the gates of Hell are opened at this time, and the spirits of the departed wander freely about the earth.

Shanghai Stock Exchange Composite (3 months chart)
The two bearish hangmen,beginning and mid-July is the ghost flag warning sign.The ghosts must have been hanged during China's rogue emperors who are now being worshipped as deities.

China's index triple digit crash has been deliberately being manipulated specially for this ghost month.

The bullish harami seen at this bear support is a sign to gear up for the beautiful mid-autumn festival. The "ghost-buster"at work now.
The streets with the long line of flags of victory against the warring ghost.

In the Shanghai stocks chart pattern,this is the ascending flag.Stocks tended to perform poorly during this period.

The Chinese lunar calendar (as the name implies) follows the cyclical movement of the moon. Therefore, in the Chinese calendar, a year has a total of 354 days or 11 to 12 days shorter than the solar year. To balance the lunar and solar calendars, a leap lunar month is added every three years.
General Bai Qi was a famous general in China.He served the King of Qin during the period known as the Warring States.Without his military contributions, the State of Qin would never unify China, and the first Emperor in China would not be Emperor Qin Shi Huang.
The Dow's 5 days weekly behaviour todate.

It's in an end-of-the month consolidation mood.

The NYSE bulls are scoring a big win and holding above the bull pivot.

It's having a very ambitious plan right up to the winter Halloween day.

Any pullback will being within the lower shadow of Thursday range.

India-world's second largest motorcycle market.

India is the world's largest market for motorcycles behind China, but it is overwhelmingly dominated by smaller, inexpensive bikes used primarily for transportation
It is also a market dominated by several well-entrenched Japanese and Indian manufacturers. Hero Honda, a joint-venture between Japan's Honda Motor Co. and India's Hero Group, holds the biggest market share among two-wheelers. Honda, Suzuki and Indian motorbike maker Bajaj Auto are also major players.
Motorbikes, scooters in India are family commuting bikes.They tend to be more robustly built and the focus is on fuel economy, but there is an increasing market for leisure and high-end bikes which is beginning to happen here in India.
It's the Harley-Davidson superbike which will make its debut in India in 2010.

Tracking the Dow,thursday 27/08/09.(3 weeks to triple Witching)

Asian Index Futures Expiry:31/08/09.
9:30am:--Gap down opening with bearish hammer.

Weakness ahead of the preliminary second quarter GDP reading and the latest batch of weekly jobless claims news.

10:30am:--First hour low with intermittent bulls.

The preliminary second quarter GDP reading showed an annualized decline of 1.0%, which is better than the 1.5% decline that was expected.

11:30am:--Bulls are holding at the bear pivot.

Currently, crude is trading 2% lower at $70.00 per barrel.

12:30noon:--A retracement to the MAV resistance piercing through it.

The latest jobless claims report at 570,000, initial claims were largely in-line with expectations.

1:30pm:--Bulls have hit the morning session high and are on upward bias.

Stocks are holding on to the session's broad-based recovery since the weak open this morning.

2:30pm:--A new day's high peak with a hangman in action.

Dollar-sensitive stocks in the materials and energy sectors garnered support as the Dollar Index fell from positive territory to a 0.7% loss late in the session.

3:30pm:--A pullback is finding support at the bull pivot.

AIG (AIG 47.84, +10.15) surged as short-sellers scrambled to cover their positions in the holding, while banks also provided support.

4:00pm:--A bullish harami close.

Today candlestick pattern:-a bullish dragonfly doji.

The Dow is now in its eighth straight advance, a feat that hasn't been accomplished in years.

Further evidence the recession is ending came in a report Thursday confirming that the economy shrank at an annual rate of just 1 percent in the spring.

Thursday's pullback just touches the bull pivot of last Friday signifying the bulls still wants full control of the market.

The Dow is now only 292.84 points to break the 52 weeks bull resistance.(9,873.47)

Booming Hookah Lounges.

The new trend in America's deepening love affair is with an ancient Middle Eastern tradition: hookah smoking.
Several factors account for the hookah boom. The smoking bans that municipalities nationwide have imposed in the past decade affected restaurants and bars but not establishments dedicated exclusively to tobacco use. Unlike cigarette smoking, which has turned into something of a furtive activity, hookahs are inherently communal. Customers can get into a hookah lounge at age 18, three years before they are allowed in a bar in most states. (The largest number of new lounges are found in midwestern college towns such as Lawrence, Kansas. and Madison, Wisconsin.)

And most important, hookah lounges are a very attractive business model.
Tracking the Dow Wednesday,26/08/09

Asian Index Futures Expiry:31/08/09
9:30am:--40.0 points bearish gap-down opener.

Weakness is most pronounced among energy stocks,Oil futures were last quoted 1.3% lower at $71.10 per barrel.

10:30am:--After sliding to a low with bullish harami,the index has now closed the first hour at the high.

New home sales for July came in at an annualized rate of 433,000 units, which is more than the 390,000 that was widely expected.

11:30am:--Pull back to the MAV support line and touch the bear pivot.

Industrial stocks are currently grappling with the most pressure.

12:30noon:--Rebounded above the MAV resistance with a bearish hammer.

Market participants were generally unimpressed that durable goods orders made their sharpest increase in two years by spiking 4.9% in July, but that's largely due to the success of the Cash for Clunkers program.

1:30pm:--A pullback to bear pivot were met with bullish ascending soldiers.

There isn't any immediate news item to account for the move.

2;30pm:--After a bullish spike,it was engulfed again partially with bearish hammer.

The swing traders are having a good time.

3:30pm:--Holding at the MAV support line.

Participants sitting on the sidelines in the last hour.

4:00pm:--Ending the day with a dark cloud cover.

The Tri-Star Doji here should indicates a trend reversal in this case a pullback.

Since the August month candlestick is a big bull,a pullback will be within Friday's body.
The bulls are still in control to complete the anniversary of the financial turmoil that began last autumn.

They might bring surprises contrary to our belief.

Helicopter Ben is back.

US Federal Reserve Chairman Ben S. Bernanke
was nominated to a second term today by President Barack Obama.
Bernanke today pledged to work toward restoring stability to financial markets and the economy.
Bernanke, 55, slashed the main interest rate almost to zero and pumped $1 trillion into the banking system to unfreeze credit markets. He now must guide the world’s largest economy back to growth and reduce unemployment that the Obama administration today forecast would surge to 10 percent, while also planning to shrink the Fed’s balance sheet to prevent a surge in inflation.
Why nickname him "helicopter Ben"?Because he mentioned that the government can always avoid deflation by printing money meaning he has a helicopter drop of money-a helicopter printing press as well.
At that time in his footnote to his speech,Bernanke noted that "people know that inflation erodes the real value of government debts and therefore,that it is the interest of the government to create some inflation."

Tracking the Dow Tuesday,25/08/09.(3 weeks to Triple Witching)
Aisan Index Futures Expiry:31/08/09

9:30am:--Bullish 30.0 points gap-up.

Fed Chairman Bernanke has been nominated to a second term.

10:30am:--After finding early high,a pullback to bearish pivot with bullish support.

Participants are taking into account news that the FDIC may ease the ability of private equity firms to buy failed banks, according to Bloomberg.com.

11:30am:--A retracement to bull pivot was checked by bearish dojis.

The S&P/Case-Shiller Home Composite 20-City Index for June showed a 15.4% year-over-year decline, which isn't as bad as the 16.4% year-over-year decline that was expected.

12:30noon:--A shooting star ends the morning session showing a graveyard doji.

The Consumer Confidence Index for August came in at 54.1, which is above the 47.9 that was widely expected and marks a sharp improvement from the upwardly revised July reading of 47.4.

1:30pm:--A pullback slightly below the MAV support having the bearish dojis in control.

The Congressional Budget Office (CBO) has released an estimate stating that the federal budget deficit for 2009 is expected to reach $1.6 trillion.

2:30pm:--The opening bell gap was filled half way being checked by the morning star,bullish spin.

Stocks grapple with renewed selling pressure.

3:30pm:--A retracement to the MAV resistance line was hampered by a bearish harami.

The latest bout of selling has been particularly unkind to energy stocks.

4:00pm:--Ending the day with a hangman at the bear pivot.

This looks like profit-taking is to be set in the following session just in time for a pullback for the Asian Index Futures Expiry.
The Dow is still playing a contrarian role of bullishness despite the technical chart shows a shooting star.

Monday & Tuesday session are holding above the bull pivot and any pullback will be minimal,possibly to cover the half body of Friday's candlestick.

Meanwhile the Consumer Confidence Index for August, which came in at 54.1. that was above the 47.9. . However, market participants should remember that consumer confidence is not highly correlated with actual spending.

Unreassuring stimulus.

ON May 24, Robert Zoellick, president of the World Bank, issued a warning that the current global economic crisis could very well lead to serious social upheavals.

Unemployment is a big concern but political leaders in many countries are trying to reassure their voters that the worst may already be over and that they are going to see an upward economic trend in the not-too-distant future.

Many political leaders, on the other hand, are more concerned over their short-term political positions rather than with the long-term welfare of their societies. As a result, they tend to underplay the seriousness of the future economic and unemployment scenarios, fearing that it may negatively affect the perception of the public towards themselves.
To be fair, the reason politicians behave in this manner is largely due to the expectations of the voters, who are more concerned with their own short-term well-being than the long-term welfare of their societies.

As a result, governments worldwide are busy formulating economic stimulus packages despite the fact many of them are actually financially strapped and simply cannot afford them.

Tracking the Dow on Monday,24/08/09(Three weeks to Quadraple Witching)
Asian Index Futures Expiry:31/08/09.
9:30am:--Mild inverted bulls open.

Vacant earnings and economic calendars today.

10:30am:--An inverted hammer at first hour high.

Oil futures prices are up 0.5% to $74.25 per barrel in the first few moments of pit trade.

11:30AM:--After reaching at a high,the bearish hammer begins.

This session pullback sees hangman and graveyard dojis.

12:30noon:--Bearish doji spinning at bull's pivot.

Stocks have eased back from their midmorning highs, but they continue to sport healthy, broad-based gains.

1:30pm:--Bearish engulfing of day's opening bull.

This session's positive bias was set early on as foreign markets moved higher to help support a bid for the broad U.S. indices.

2:30pm:--It's now hoovering near morning session low.

Financials took the brunt of the latest round of selling.

3:30pm:--Day's low was set here and time for technical rebound.

Due to time factor at this moment,a rebound to MAV resistance line is impossible.Merely at the bear pivot.

4:00pm:--An indecision doji with a bullish hammer.

Buyers chased the stock market's recent advances for fear of missing out on future gains but there's a warning from New York University Professor Roubini about a double-dip recession in a Financial Times article.

The bulls are getting tired after four solid days of rampage right on time for the Asian index futures rollover.

They are having a hangover after seeing the shooting stars.Time for a pause and breather.

Overall August candlestick is still bullish.

The bull's 52 weeks resistance of 9,873.47 which is just 364.17 points from now is very likely to be achieved by next month.

Citigroup shares soar.(NYSE:C)

Citigroup Inc (NYSE:C) shares rose as much as 6 percent to their highest in more than three months on growing confidence that the embattled bank would become more profitable as it unloaded troubled assets.
People are buying it now in expectation of the triple because they made the decision that all of the negatives that could happen don't mean anything.
Some investors are betting that Citi shares will triple in three years.
Citi received $45 billion of bailout money from the U.S. Treasury's Troubled Asset Relief Program, known as TARP, and the government now owns a 34 percent stake in the company.
But shares are rebounding after higher-than-expected second-quarter earnings and a high-level management shake-up.
Citi shares are still well below their 52-week high of $23.50 in October.

Tracking the Dow on Thursday,20/08/09(3 more weeks to Triple Witching)
Asiaan Index Futures Rollover contracts start 24/08/09.Expiry:31/08/09

9:30am:--A mild bearish hammer open.
Initial claims for the week ending August 15 totaled 576,000, which was more severe than the 550,000 claims that were widely expected.

10:30am:--A slight pullback from session high but rested on the bull pivot with inverted hammer.

Dow Jones reported that U.K. retail sales beat expectations and hit a 14-month high in July.

11:30am:--An early spike down to MAV support,a good sign being followed by ascending soldiers.

The Philadelphia Fed Index came in at 4.2, which is considerably better than the -0.2 that was expected and up sharply from the -7.5 that was registered in July.

12:30noon:--The indicies are holding strongly at the bull support pivot.

The US Dollar Index is choppy this morning, but us trading in positive territory, adding selling pressure in precious metals.

1:30pm:--Pullback holding near session high.

The major indices have extended their morning advance, giving stocks impressive gains.

2:30pm:--Another pullback to bull pivot with a dragonfly doji star.

The leading economic indicators made their fourth straight increase by advancing 0.7% in July.
3:30pm:--The day's high was established.

Continuing claims also fed fears that the labor market remains extremely weak by rising slightly to 6.24 million even as many lose their unemployment benefits.

4:00pm:--Last minute profit taking but held strongly with a bullish harami.

The Dow is now enroute to a breakout of August high (9,437.71) by just a mere 87.66 points.

More signs that the economy is creeping toward recovery encouraged investors to move further into stocks -- but at a cautious pace.
Financials were particularly in demand after a report quoting American International Group Inc.'s CEO as saying the company will repay its bailout loans from the government.

Shanghai 'bund' crash.

China’s benchmark stock index posted the biggest gains among the world’s markets from Jan. 1 to Aug. 4, more than doubling from the low in November. Shares had surged as the government unveiled a 4 trillion yuan ($585 billion) stimulus package and new loans by banks surged to a record in the first half. The gauge remains 53 percent below the all-time high on Oct. 16, 2007.
The index has slumped this month, paring the year-to-date advance to 57 percent, after new lending in July tumbled to less than a quarter of June’s level, while losses at Yunnan Copper Industry Co. and Maanshan Iron & Steel Co. revived concern that earnings will deteriorate.
The equities rally also faltered as the securities regulator allowed initial public offerings after a nine-month moratorium.
The main catalyst for the recent plunge was the July IPO of China State Construction Engineering Corp.
“It drained liquidity from secondary markets.”
(photo :Shanghai Stock Exchange building)
Tracking the Dow on Wednesday,19/08/09
Asian index futures roll-over contract start 24/8/09.Expiry:31/08/09.

9:30am:--A early 50.0 points gap-down with a small bullish gap fill.

A spillover of renewed selling pressure overseas especially Shanghai Stock Exchange.

10:30am:--The bearish opening gap-down has been fully filled.

A bullish inverted hammer on hold.The Bank of England surprised many when it revealed Wednesday that its rate-setting committee was split on how far it should increase its money supply program via asset purchases.

11:30am:--Hoovering at morning session high waiting for breakout.

Oil prices are down 1.1% to $68.45 per barrel in the first few moments of pit trading.

12:30noon:--The breakout into a bullish stance is now holding at session high with a bullish engulfing.

Investment guru Warren Buffett's prediction in a New York Times article that the U.S. economy is on a slow path to recovery now that it is out of the emergency room.

1:30pm:--Bearish hangman at new session high.

While stocks are now up in broad-based fashion, Treasuries have lost some of their initial luster.

2:30pm:--The three bearish crows are beginning to pull it down but the chances is to feed at the bullish pivot not the MAV.

The major averages continue to trade with fairly strong, broad-based gains with energy and healthcare two of the best performing sectors.

3:30pm:--The bull pivot being touched and a rebound.

There has been some "market chatter" circulating regarding the possibility of a second economic stimulus package, which some participants believe was a positive catalyst for the stock market.

4:00pm:--A final retracement to near day's high with mild profit-taking.

August candlestick status is a bullish inverted hammer to date.

Monday's pullback has been fully filled and the bulls will continue its rampage just in time for the Asian index futures roll-over to corner the shorties.

But the volume was light, even for late summer, which traders say suggests little conviction on the part of buyers. Light volume also makes stocks more volatile.

Grizzly Bears at Jackson Hole.

It's an annual event three days before the Federal Reserve meet at this mountain retreat,the grizzly bears of Jackson Hole will always ransack Wall Street to get their best piece of meal.

Comments from various policymakers at Wednesday's Federal Reserve conference in Jackson Hole, Wyoming, will be crucial in highlighting divergent central bank responses to the improved global outlook, which gives trading opportunities.

Central banks, faced with different stages of economic and financial stabilisation, are not taking a uniform approach to exit strategies.Central bank response functions will be varied. The global recession did not strike all economies the same way, and this will become increasingly clear in the recovery phase.
Norway and Australia have already been hinting at raising interest rates, whereas New Zealand could still ease policy.

The Bank of England stunned markets last week by expanding its quantitative easing plan to 175 billion pounds.

The Bank of Israel has become the first central bank to announce the end of unorthodox monetary easing by ending the bond and FX buying programme over the past few weeks.

Tracking the Dow on Monday,17/08/09.(4 market days to Dow Futures Expiry)
Asian Index Futures Expire 31/08/09.Rollover contracts starts 24/08/09

9:30am:--Down goes humpty-dumpty with 150.0 points scrap.

A global selloff, which was spurred by disappointing economic growth in Japan.

10:30am:--Damage has been own,no way to fill up the opening gap-down.

The New York Manufacturing Index showed its first positive reading, which indicates expansion, since April 2008 and its best reading since November 2007.

11:30am:--A slight pre-noon retracement.

The Fed announced it has extended its Term Asset-backed Securities Lending Facility (TALF) as part of its ongoing effort to improve credit and liquidity conditions.

12:30noon:--Failed to reach even the bear pivot and the hangman waiting.

Despite the good announcement,nothing much can lift investors spirits in this session.

1:30pm:--It's the bears meal.

Weakness is widespread.

2:30pm:--Still holding below the day's bear pivot.

Crude is trading 2.8% lower at $65.61 per barrel.

3:30pm:--Bears engulfing.

Losses remain significant.

4:00pm:--A bearish engulfing checking the spinning bulls.
The start of second half August,the beginning of Nikkei 225 futures new contract month(august),the slotting of poor Japanese economic report at the right timing with an excuse to sell the skyrocketing market which in turn helps the Dow to find a lower shadow because it has a bald shaven August opening.Goldman Sachs Japan,you're damn good.
So the Dow's candlestick to date has a long upper shadow which will be short-covered in due time.

Vietnam-the emerging market.

Vietnam’s first exchange-traded fund listed in the U.S. stock market rose in debut trading as foreign investors sought to tap into a rally that has made the Southeast Asian country’s benchmark equity index the eighth-best performer in the world.
The Market Vectors Vietnam ETF rose 4.1 percent to $26.02 in New York Stock Exchange trading. The fund, introduced by New York-based Van Eck Global, is part of a growing trend of emerging-market equity ETFs. Unlike mutual funds, whose shares are priced once a day, ETFs are listed on an exchange and trade like stocks.
Vietnam, the world’s second-biggest rice and coffee exporter and the biggest cashew producer, has posted average annual economic growth of 7.5 percent this decade, helping lure investment to the country.
“Countries that are able to export and provide some of the food for the rest of the region and indeed the world, like Vietnam, are going to become increasingly important,” David Semple, who helps manage about $13 billion in equities and commodities at Van Eck, said in a presentation unveiling the ETF in New York today.
Vietnam’s benchmark VN Index, a measure of 162 companies on the Ho Chi Minh City Stock Exchange, has gained 61 percent this year, putting it in the top 10 of the world’s best-performing equity benchmark measures among 89 indexes tracked by Bloomberg.
ETF Growth
Emerging-market equity ETFs are benefiting from growing investor demand, with the funds’ assets under management jumping 83 percent to $130 billion this year, according to Barclays Plc data.
Vietnam’s economy expanded 6.2 percent in 2008, the slowest pace since 1999, as higher interest rates and lending restrictions curb construction and the global recession hurts tourism.
A revival in construction as stimulus spending began to filter through the economy and costs for cement and steel dropped underpinned an acceleration in second-quarter growth to 3.9 percent from 3.1 percent in the first quarter.
Growth Pickup
The pickup in growth helped the VN Index rebound from a 66 percent slump in 2008. The stock market rally this year also led to the listing of Joint-Stock Commercial Bank for Foreign Trade of Vietnam, the country’s third-biggest bank, and of Bao Viet Holdings, its biggest insurer.
Vietnam has “largely completed” its more than two-decade- old shift to a market-based economy, according to a study performed for a Asia-Pacific Economic Cooperation forum.
The Southeast Asian country’s ruling Communist Party introduced economic policy changes in 1986. The reforms led to the sale of shares in state-owned companies, the birth of stock markets in Ho Chi Minh City and Hanoi, and Vietnam joining the World Trade Organization in 2007.

The nation's fledgling official bourses in Hanoi and Ho Chi Minh City are surging,vietnamese are making the kill.

Over the other corners, the gray market is also flourishing, spurred on by Vietnam's robust growth, optimism surrounding the country's recent entry into the World Trade Organization, and the rapid rise of sanctioned stock markets.

It was estimated that at least 500,000 Vietnamese are participating (five times the number of accounts on the two official bourses), aided by more than a dozen private websites and online forums with names like mua re (street trading) and Sanotc.com.

Participants call this the over-the-counter (OTC) market, a reference to exchanges abroad that provide an arena for trading small stocks. But unlike OTC bourses elsewhere, Vietnam's market has no licensed brokers, virtually no regulatory oversight, and trades often culminate with the exchange of cash for paper shares at a local tea shop.

Over optimistic.

After rallying for months on expectations of an economic recovery, investors are worried that they have been too optimistic, given consumers' continuing reluctance to spend.
There is still going to be a tug of war between good news and bad news as we move through the coming months.
Investors also sold off oil and other commodities and moved their money into the relative safety of the dollar and government bonds.Oil prices sank $3.01 to $67.51 a barrel.
The Federal Reserve said on Wednesday that the economy was "leveling out"but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. That means that the economy is still flat and directionless and can still succumb to a humpty-dumpty fall.
We have to be on standby for the anniversary of the October 1997 Black Monday crash as history might repeat itself.We are now in mid-autumn and the market might get frozen by winter.
This might be a good time for hedge funds,mutual funds to find an excuse to unwind its positon early for year end book closing.
Meantime,The Reserve Bank of Australia will have to raise the benchmark interest rate from its “emergency” level at some stage as the economy rebounds from the global recession, bank Governor Glenn Stevens said.
The Australian dollar and bond yields jumped on mounting speculation the central bank may increase borrowing costs before the end of the year.
As for India's Mumbai Stock Exchange the government is considering a plan that would require at least 25 percent of a company’s stock to be traded which may trigger as much as 1.9 trillion rupees ($39 billion) in stock sales, equivalent to five years of equity offerings, with a proposal to limit stakes of controlling shareholders.
The rule would prompt equity sales in 560 of Mumbai’s 3,335 most-active stocks, such as NMDC Ltd. and Steel Authority of India Ltd.,

Tracking the Dow on Friday.(14/08/09)--PIVOT DAY of month,5market days to expire.Nikkei expire today.Asian index futures expire 31/08/09.

9:30am:--A bearish 3 black crows.

The core CPI reading increased 0.1% month-over-month after increasing 0.2% in June.

10:30am:--An hourly low with hangman.

July industrial production increased 0.5%, which is slighly better than the 0.4% increase that was widely expected.

11:30am:--Completing the morning session low with a bullish harami.

Crude is currently trading near those lows, down 1.8% at $69.26 per barrel.

12:30noon:--No sign of retracement not even to bear pivot but there are bullish engulfing sign.

Weakness remains widespread with declining issues outnumbering advancers in the S&P 500 by approximately 15-to-1.

1:30pm:--Bearish engulfing.

Losses are steepest among materials stocks, which actually fared the best in the previous session.

2:30pm:--Another bull covering noticed with chances of a technical rebound to either the bear pivot or MAV.

According to the University of Michigan's preliminary survey, consumer sentiment retreated to its lowest level since March by coming in below expectations at 63.2.

3:30pm:--An inverted bullish hammer at the bear pivot looking for penetration.

Participants' lack of interest this session is reflected by the exceptionally low level of trading volume.

4:00pm:--Closing right on dot at the MAV resistance.

This bull short-covering ended with a hammer pointing down.

Friday's closing is a bearish hammer with a long lower shadow yet to be utilised again.

The August low which is also the opening price(9,173.65-unchange)has not found a real lower shadow and the chances of looking south is quite high in the next half of August.

The market is now news sensitive to inflationary pressure.

The distance from Friday's closing to August open is a mere 147.83 points and is very fragile.

This is the second attempt to pierce the bear pivot.

Speculative driven greed.

FINANCIAL and economic news is surely laying a positive flavour pretty thickly of late.
Stunning corporate results from the majority of companies have sent stock markets surging in recent months.
Global equities, based on the MSCI World Index, are up 52% since their low in March on the back of a confluence of factors that also include more companies raising their earnings guidance.
The surge in global markets might have been made possible by the cheap money that is sloshing around.
With interest rates around the world on average at historical lows, risk premiums too have dropped – looking at the Chicago Board Options Exchange’s volatility index close to a year’s low.
As good as people are feeling now, they need to take a step back and examine the bubbling optimism.
The recently announced drop in the rate of unemployment in the US was due more to people dropping out of the job market than people actually getting hired.
In some industries, profit was driven up by companies cutting cost to the bone by slashing their workforce and benefiting from low raw material prices. The pick-up in production and exports is due to restocking and whether that continues beyond the replenishment of inventories and translates into medium-term demand is important in getting consumption up and running again.
In other words, the situation will take some time to return to normal.
While companies have done their best to cut the fat, it appears governments around the world are behind the curve as the worst global recession in living memory has not been a bitter enough lesson for many governments to carry out urgent regulatory reforms.
Greed and excessive speculation appear to have escaped with a slap on the wrist as they continue to fester in the world of commodity prices.
The latest example is sugar. Sugar prices have been rallying since July to hit a 28-year high on news that the monsoon has wrecked India’s production and Brazil, a leading exporter, is slow to harvest sugarcane.
If such activity is left unchecked, the multitude of problems that high commodity prices would create, as it demonstrated not too long ago, would soon return to rear its ugly head.
So while a few do benefit from high prices, especially the producers and traders of such commodities and derivatives, the man in the street would be left worst off as a result.
In fact, speculation on oil, rice and now sugar should have been evidence enough that there is no place for people sitting in plush offices to buy such products if they are not the end user of producer of such goods.
Tracking the Dow on Wednesday,12/08/09.(7 days to Dow Futures Expiry)
Nikkei Expiry:14/08/09 (2 days Left)
Asian markets index futures expiry 31/08/09.

9:30am:--A bullish spinning spike up.

The June trade deficit grew to $27.0 billion from a $26.0 billion deficit in May.

10:30am:--First hour session high with bearish spin holding.

Financials are the primary source of strength in the early going.

11:30am:--Still holding at 2nd hour hour high with intermittent bears.

Gains by stocks have leveled off so that the major indices are now moving sideways.

12:30noon:--A small bullish harami at near session high.

Stocks have drifted slowly off of session highs, but gains remain healthy.

1:30pm:--A new high with slight pullback but holding above bull pivot.
Market participants await a couple of key announcements, starting with the results from a $23 billion 10-year Treasury Note auction, which are due imminently. On the horizon is the latest FOMC announcement (2:15 PM ET).

2:30pm:--Bearish spike down on FOMC news.

The FOMC has left its target range for the fed funds rate unchanged at 0.00% to 0.25%. The Fed said the interest rate will remain exceptionally low for an extended period.

3:30pm:--A spike up o find the day's high.

A positive tone in the equity markets and a weaker dollar combined to provide support to commodities this session.

4:00pm:--Bearish engulfing.
Last minute Profit taking.

The usual 8 days before any index futures expiry will see a bullish play not necessary with economic news.

It's the beginning of roll-over of contracts.

The Dow index has been supported at the bear pivot for the third time and has formed an inverted bullish hammer again.

The bulls still in control.

July index=1,200 points range

August @ 12/8/09=264.0 points only.(other worldwide markets are also holding at a small range).The big boys are not aggressive this month.

How to screen overseas stocks.

Four criteria to look at when choosing counters that are suitable for long-term investment

LATELY, interest has grown in overseas stock investment. Given the foreign markets’ relatively high volatility of returns compared with the local market, a lot of retail investors find it more exciting to invest in overseas stocks.
However, a common problem most investors face is how to filter, from among all the listed companies in the respective markets, the right stocks that are suitable for long-term investment.
Market capitalisation
One of the most important selection criteria is buying stocks with big market capitalisation. The market cap of a listed company can be computed by multiplying the number of its outstanding shares with the current share price.
In general, we should buy stocks with big market cap because they are normally well-established blue-chip stocks with higher turnover and widely-accepted products and services.
Even though some academic research shows that buying into small market cap stocks can provide higher returns compared with big market cap companies, unless we are quite familiar with the stocks available in those overseas markets, it is safer to put our money into bigger market cap stocks.

It is not difficult to find out which companies have the largest market cap in any stock exchange.
Such information is available in most major newspapers in that particular country or the stock exchanges themselves.
For example, if we intend to buy some Singapore stocks, we should pay attention to companies that are ranked in the top 30 in terms of market cap.
Price/earnings ratio
Once we have filtered out the blue-chip stocks, the next selection criteria is the price/earnings ratio (PER), which should be lower than the overall market PER. This is computed by dividing the current stock price by the earnings per share (EPS) of the company. It represents the number of years that we need to get back our money, assuming the company maintains identical earnings throughout the period.
Even though some published PER may use historical audited EPS compared with forecast EPS, given that our key objective is to do stock screening, the PER testing will provide us with a quick check on the top 30 companies – whether they are profitable and selling at reasonable PER compared with the overall market PER.
If we cannot get access to the overall market PER, we may want to consider Benjamin Graham’s suggestion of buying stocks with PER of lower than 15 times.
Dividend yield
A good company should pay dividends. We strongly believe that this is one of the most important ways for the investors to get any returns from the companies that they invest in.
Our rule of thumb is that a good company should have a dividend yield that at least equals or is higher than the risk-free return, which is usually based on the fixed deposit rates.
The dividend yield is computed by dividing the dividend per share by the current share price. In general, most blue-chip stocks do have a fixed dividend payout policy and reward investors with a consistent and growing dividend returns.
Based on observation, most smaller companies may not be able to pay good dividends as they may need the capital for future expansion programmes.
Price-to-book ratio
Most investors would like to invest at a market price lower than the owners’ costs in the company. The book value of a company represents the owners’ costs invested in it.
In a normal business environment, unless the company has some problems that the general public may not be aware of, it is quite difficult to find stocks selling at a price lower than the book value of the company.
As a result, we may need to purchase at a market price higher than the book value. According to Graham, the maximum price one should pay for any stock is the price which gives a price-to-book ratio no greater than 1.5 times. This means that we should not pay more than 1.5 times the owners’ costs invested in the company.
Lastly, the above four selection criteria are merely a preliminary quick stock screening process. Even though investors may be able to find stocks that fit the criteria, investors should check further the fundamentals of the company, such as the balance sheet strength, its gearing, future business prospects and the quality of the management before deciding to invest.
Tracking the dow on Tuesday,11/08/09.(8 market days to Dow futures Expiry)

Nikkei Futures Expiry-14/08/09

Aisan market futures expiry:31/08/09
9:30am:--A 50.0 points gap-down with bearish spin.

Wholesale inventories for June decreased 1.7%, which is a sharper decrease than the 0.9% decrease that had been widely expected.

10:30am:--First hour low with another hangman.

Currently, crude is trading 2.1% lower at $69.12 per barrel.

11:30am:--Another hourly low this time with bullish engulfing.

The ususal retracement time attempt for the MAV line.Financial stocks have fallen under an intensified selling effort that has taken the sector to a 2.4% loss, which is worse than any other major sector in the S&P 500.

12:30n00n:--Attempt for the MAV line failed just quarter inch away being met by a bearish harami.

Weakness remains widespread.

1:30pm:--Hangman in control.

Economic data hasn't had much of an overall impact on trading,no corporate announcements to guide their actions this session.

2:30pm:--A retracement to kiss the MAV with sucess with a shooting star and hangman.

Weakness continues to hamper stocks, but the major indices haven't given up on working their way off of session lows.

3:30pm:--Indicies hoovering near the MAV resistance line being hampered again by the bearish hammer.

Neither corporate news nor economic data had any meaningful or lasting impact on the broader market this session.

4:00pm:--Two black crows completed the second day of losses.

Tomorrow afternoon the FOMC announces its rate decision and releases its latest policy directive, which could provide a meaningful catalyst to trading.

The number 8 days before Dow Expiry will start the "rollover" of July contract month to August,so high volatility starts.Short-covering will come in again.

The bears have robbed back the bulls profit bringing the index to the bear pivot of August.

It's now 67.80 points away from the month's opening price to form a "graveyard-doji"

This is the 3rd Quarter of 2009.(Jul,August,Sept)

July= Very bullish.

August= the Pivot month of the quarter so expect a pullback to the overall MAV or bullish support(July'09)

September=Dow Witching Month.

Indonesia – the next economic powerhouse.

Jakarta,the childhood hometown of US President Barack Obama is the capital city of Indonesia.
Indonesia is no longer a developing economy dependent largely on agriculture and mining. Politically and economically, it has been transformed since the end of the Asian financial crisis in 1999.
Indonesia is on a very strong and progressive path, especially in the last two to three years which is in a similar situation as China was 10 years ago, when the vast Chinese population moved beyond the subsistence level and consumption power was increasing with accumulated wealth as the economy grew at a fast pace.
Today, Indonesia may already be on the cusp of such a transition.
(photo of Indonesia Stock Exchange---Bursa Efek Indonesia also called)
We know Indonesia has the basic ingredients for success, among which are:
1) .The fourth largest population in the world at 226 million – which also means a big domestic consumer base;
2) ·Huge natural resources – Indonesia is the largest producer of palm oil in the world and is a major producer of crude oil, natural gas, iron ore, tin, lead, gold, etc.; and
3) ·Young urban population – 50% of Indonesians live in urban areas (a rate higher than in China or India) and more than 52% of the population is aged 20-54. Dynamic young urban population’s productivity growth would be at a faster pace with the right economic environment.
There are compelling reasons to believe that with the right catalysts, Indonesia may grow as fast as China or faster in the years ahead.
Among the key catalysts for Indonesia to emerge as an economic star in the global economy are:
4) ·Leadership in Jakarta continues to provide political stability and sound economic policies: President Susilo Bambang Yudhoyono did a good job steering the economy in his first term and he was re-elected with a strong 60% of the popular vote for another five-year term on July 8.
The current leadership team has a good track record and credentials in managing the economy; that includes the Vice President-elect Boediono, who was Finance Minister and Central Bank governor before, and the current Finance Minister Sri Mulyani Indrawati, both of whom are well respected technocrats.
5) ·Infrastructure development: Indonesia has a pressing need for great infrastructure like many developing nations.
The mega infrastructure proposed during the first term of Yudhoyono’s presidency did not take off well, but with Yudhoyono now having greater control over the parliament, this is likely to change.
In response to the economic downturn, Indonesia set aside US$7.5bil in the 2009 budget for infrastructure spending and an additional US$703mil for labour intensive infrastructure projects.
Infrastructure development will help spur economic growth, improve efficiency in Indonesia, much like how such investments boosted the economies of Malaysia in the 1990s and China in 2000s.
6) ·Banking system reform continues to provide the lifeblood for the economy to grow: The banking system underwent drastic reform after the Asian financial crisis with the Indonesia Bank Restructuring Agency, resulting in the demise of insolvent banks and ownership changes in major private banks.
The recapitalisation and reform resulted in one of the most liberalised banking systems in Asia, with little restrictions on foreign ownership.
The banking reform also fostered healthy competition and that in turn has benefited many Indonesian companies and consumers alike.
In Indonesia, the household debt to gross domestic product ratio is 11.2, one of the lowest in the region when compared with Taiwan (53.8), Hong Kong (53.2) or Malaysia (46.7).
This means that consumers not only have room to borrow for large purchases such as cars and homes, but banks also have huge opportunities to sell their loans to Indonesian households.
Ten years ago, banks preferred to lend to big corporations and the average Indonesian would have difficulty getting consumer financing, plus they would have had to pay interest rates in excess of 20% a year.
Today, Indonesian banks are actively courting consumers to borrow from them.
Recent events have proved that Indonesia has not only the economic resilience but also the confidence to be a major economic powerhouse in the future.
Indonesia is moving in the right direction to be a formidable global economic powerhouse.
The rest of Asia should view the emergence of Indonesia not as a threat, but as a motivation for healthy competition.
Just like the emergence of China, which helped advance the economies of North Asia such as Taiwan, South Korea, Hong Kong and Macau in the past 20 years, I believe Indonesia’s economic growth in the next decade will do the same for South-East Asia.
My favourite Indon singer Broery Marantika sings WIDURI dan "Senja Di Kuala Lumpur" masih dalam ingatan saya.

Tracking the Dow on Monday,10/08/09.(14 market days to Dow Futures Expiry)
Nikkei 225 Futures Expire 3 more market days.

Asian market index futures expire 31/08/09.
9:30am:--Mild bullish start with 'san-ten' (3 white bulls.)

The overall direction this moring remains unclear as stocks gyrate during the first few minutes of trade.
10:30am:--A rebound to session high.

September crude oil is at $71.24 per barrel.This week's trading will most likely be directed by economic data since the vast majority of widely-held companies have already reported their quarterly results.

11:30am:--A pullback to session MAV with morning star and graveyard dojis warning.

As selling pressure picks up, Treasuries are garnering support.

12:30 noon:--After finding the morning high,the indicies has broken the MAV support line with hangman and bearish dojis completely filling up the opening bull gap.

The decline is broad-based, though, as nine of the 10 major sectors move lower.Losses are steepest among materials stocks.

1:30pm:--A new session low with dragonfly doji.

Energy stocks are bucking the negative tone and are sporting a modest 0.2% gain, even though oil prices have slipped to a 0.4% loss at $70.65 per barrel.

2:30pm:--The low of the day been found as the morning star was seen.

The absence of market-moving earnings announcements and economic data has left participants without any trading cues this session.

3:30pm:--A retracement to the MAV resistance line with a morning star again in action.

While the broader market has spent all day contending with selling pressure, McDonald's (MCD 56.22, +1.02) is providing support to the Dow.

4:00pm:--The bulls have penetrated the MAV resistance after lighting up the uppper shadow.

A technical rebound to follow.

The bearish hammer on Monday was held within last Friday's body closing above its half body.A sign of profit-taking only,not of a panic selling.
It also didn't fully covered it.

Friday's upper shadow has not been lighted yet so we are expecting it soon possibly after Wednesday's FOMC rate decision and policy statement.
For the month of July,the Dow moved within a range of 1,200 points.As at August todate the range is 264 points with an unshaven bottom candlestick.There might be chances it need to find a lower tail.