Sunday, November 21, 2010

China is resilient to inflationary pressure.

Surging food prices pushed up China's consumer price index (CPI), a major gauge of inflation, to a 25-month high of 4.4 percent in October.The price of food, which accounts for one third of the basket of goods used to calculate China's CPI, surged 10.1 percent year on year in October.
The planning agency said supplies of farm products such as poultry, eggs, grain and cooking oil are sufficient. It said the government has adequate reserves, even after droughts and other natural disasters this year.
Economists say money flooding through the economy thanks to stimulus spending and bank lending helped push up October inflation.
China's regulators also worry that soaring lending is fueling overspending on real estate and other assets and could leave banks burdened with unpaid loans if ill-considered projects default.
Beijing has slammed the U.S. for monetary policies it says are flooding emerging economies with cash seeking higher returns due to low interest rates and the weakening U.S. dollar.
China's Cabinet promised last week to ensure adequate supplies of coal, power, oil and gas and said it would impose price controls on daily necessities if required.
The government also has promised food subsidies for the poor and increases in pensions and minimum wages.
Dow Index Futures expiry day.
9:30am:--Concerns about the effects of China inflation along with debt woes in Europe have pressured equities.
10:30am:--Early session low,bullish hammering out a bottom.
11:30am:--Holding at near morning high.Bearish pullback.
12:30noon:--Pullback holding strongly at the bullish pivot.
1:30pm:--Another attempt to pierce the morning high.
2:30pm:--Session high with bearish pullback.
3:30pm:--Retracement time.
4:00pm:--Day's high closing.
A week of threatening news...China's inflation & Ireland bankruptcy.
China’s government increased the amount of deposits it requires banks to hold with its central bank by 50 basis points.
Meantime, the prime minister of Ireland Brian Cowen — or “Taoiseach,” as the Irish call him — is in “constructive talks” with the International Monetary Fund over help in the country’s debt woes, with formal inspection of the country’s finances underway.
The weekly candlestick reflects that of a bullish dragonfly doji while the monthly todate pattern is still a bullish spin.Bulls and bears are still fighting it out and the bulls need to break the monthly MAV resistance line in order to secure a safe haven.

Saturday, November 13, 2010

Dispute,accusations and manipulations.

The latest U.S.-China currency dispute
has raised the specter of a global trade war.
Huge differences remain on U.S. accusations that China deliberately undervalues its currency to gain a trade advantage while similar accusations are being made against the United States.
The dispute over whether China and the United States are manipulating their currencies is threatening to resurrect destructive protectionist policies like those that worsened the Great Depression in the 1930s. The biggest fear is that trade barriers will send the global economy back into recession. A law the United States passed in 1930 that raised tariffs on imports is widely thought to have deepened the Great Depression by stifling trade.
A more market determined exchange rate systems and enhance exchange rate flexibility to reflect underlying economic fundamentals is currently the key discussions at the G20 summit.
The Dow on Friday is 5 market days to Index/options futures expiry.
The Moslem Haj holiday is on 17/11/10

9:30am:--Bearish 60.0 points gap down.The causes:-increasing European sovereign debt concern, a sharp drop in Chinese shares and a profit warning from tech bellwether Cisco (CSCO).
10:30am:--Attempted rebound failed with more bearish hammers.
11:30am:--Hangman near the bottom.China's inflation worries.
12:30noon:--Bears at session low,graveyard dojis.
1:30pm:--A rebound to bear pivot resistance.
2:30pm:--A second attempt at bear pivot resistance,bulls noted.
3:30pm:--Failed to test the MAV resistance.Bears profit taking.
4:00pm:--A bullish harami closing.
We have a first week of bulls followed by 2nd weeks of bears nearly wiping out the first week gains.
As for today the overall candlestick is a weak bullish inverted hammer and it has to shortcover again
The US stock market was pulled down by intensifying concerns over the eurozone economy as laggards Ireland, Spain, Portugal and Greece struggle to deal with a growing sovereign debt.
Data out of China showed a roaring inflation beyond central bank targets, which raised speculation of an interest rate hike as early as this weekend.

Friday, November 5, 2010

The hidden agenda of currency dispute.

The Obama administration says that China's undervalued currency, the yuan, contributes to strains in the global economy because it gives Beijing an unfair trade boost by making Chinese goods cheaper in the U.S. and elsewhere. Meanwhile, emerging economies like Brazil blame both the U.S. and China for keeping their currencies weak.
At the heart of the problem is the huge gap between the United States, which buys far more than it sells to the rest of the world, and developing countries, such as China, which are running big trade surpluses.
Southeast Asia, made up of export-reliant nations are now giggling at their high currency value which have made their goods less competitive. Some governments have expressed concern that lower U.S. interest rates will result in more money flooding into their markets seeking higher returns, pushing up exchange rates and hurting exports by making their goods more expensive. Expectations of the Fed's move also contributed to weakening the U.S. dollar, adding to global currency tensions.
Tracking the Dow,Friday 5th November 2010.
Today is the Diwali Festival(Deepavali),Indian New Year celebration.

9:30am:--Bearish 20.0 points gap down opener.A surprising surge in October nonfarm payrolls announced.
10:30am:--A dragonfly doji in a bullish pair.After pulling back from earlier high,a second technical rebound.
11:30am:--The Republicans win control of the House of Representatives and the Federal Reserve announce it would buy $600 billion in additional bonds.Graveyard doji and a bearish engulfing.
12:30noon:--A morning session low being set and bullish engulfing lifted a rebound to the MAV resistance line.
1:30pm:--Weak bull at the MAV resistance,three bearish crows swiped on the bulls.
2:30pm:--Another new low of the day,followed by a technical rebound with inverted bullish hammer.
3:30pm:--Attempt to rebound to the MAV resistance failed.Profit-takers are on hand.
4:00pm:--A last minute spike up dressing,very fictitiuos.
U.S. stocks rose slightly, extending their climb to fresh two-year highs as investors were encouraged by a report of stronger-than-expected job growth for October.
A spinning top was formed on Friday and any pullback will be within Thursday upper half body candlestick.
The Federal Reserve is poised to allow healthy banks to increase dividend payments for the first time since the financial crisis.