Daily US Market Comments 22 Dec 2006 by MastersoEquity.com
FUNDAMENTALS
Markets took a turn to downside yesterday on concerns over a slowing economy and the energy sector turning down along with falling oil prices. The problems in the US economy is not a simple one and one that will eventually show up in the stock markets. With very little positive developments in the economy and mounting pressure from a rising China, US is quickly losing its global competitiveness. This showed up as a 5.8 points decline in the business index for December at a negative 4.3 versus a positive 5.1 in November. With a national debt that is 4 times national GDP, there is no way debts can be repaid with the baby boomers retiring from 2008 onwards. Like a person deep in debt and forced to repay very soon, this giant's financial picture is not an optimistic one.
TECHNICALS
Sadly, the "Black & White Brothers" failed to lift the NASDAQ Composite index. Ending the day in a 0.48% drop, all trend indicators are pointing to a short term bearish trend for the first time since the same indications showed up on 10 July 2006. We saw the same example of such a behavior in the indicators on 11 May 2006. The Dow is displaying a completely different sentiment, however, as it continues to form yet another plateau of its staircase formation with no indications of coming to a halt. Eventhough all major indices tend to move in the same direction under the same market undercurrent, there are times when they are different. On such time is the tech crash of 2000 - 2001. By 2002, however, the Dow yielded to the falling tech sector and fell in tandem for a year. Oil prices have lasped back into range trading within its neutral channel of $60 - $63 once again. Looks like it is going to stay neutral for a while here.
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Markets took a turn to downside yesterday on concerns over a slowing economy and the energy sector turning down along with falling oil prices. The problems in the US economy is not a simple one and one that will eventually show up in the stock markets. With very little positive developments in the economy and mounting pressure from a rising China, US is quickly losing its global competitiveness. This showed up as a 5.8 points decline in the business index for December at a negative 4.3 versus a positive 5.1 in November. With a national debt that is 4 times national GDP, there is no way debts can be repaid with the baby boomers retiring from 2008 onwards. Like a person deep in debt and forced to repay very soon, this giant's financial picture is not an optimistic one.
TECHNICALS
Sadly, the "Black & White Brothers" failed to lift the NASDAQ Composite index. Ending the day in a 0.48% drop, all trend indicators are pointing to a short term bearish trend for the first time since the same indications showed up on 10 July 2006. We saw the same example of such a behavior in the indicators on 11 May 2006. The Dow is displaying a completely different sentiment, however, as it continues to form yet another plateau of its staircase formation with no indications of coming to a halt. Eventhough all major indices tend to move in the same direction under the same market undercurrent, there are times when they are different. On such time is the tech crash of 2000 - 2001. By 2002, however, the Dow yielded to the falling tech sector and fell in tandem for a year. Oil prices have lasped back into range trading within its neutral channel of $60 - $63 once again. Looks like it is going to stay neutral for a while here.
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Labels: fundamental analysis, investment, share market, stock market, stocks, technical analysis
posted by Jason Ng at 7:45 PM
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