Oil Gone Crazy, Market Gone Crazy...
FUNDAMENTAL ANALYSIS
Oil staged an early rally again today as the Saudi's pledge to increase oil production by 200,000 barrels a day barely offset the effect of a sudden drop in the US dollar. The Empire State Index also turned in worse than expected as it declined to -8.7% in June from -3.2% in May. The Empire State Index tracks manufacturing activity in New York and is gaining importance recently as it seemed to be a leading indicator for the heavy weight ISM index. In fact, we have seen the ISM index struggle over the past few months as the Empire State index went negative. The declining Empire State index once again put economic worry on the center stage but that didn't seem to stop the techs from staging a relatively huge rally. So, we have oil gone crazy and a market gone crazy too as a possible self defeating process starts filtering through the ranks as reality fails to catch up with expectations. How long will the last of the bulls stand? Until reality catches up and turns this into a self reinforcing process? Only time will tell.
TECHNICAL ANALYSIS
What a way to start a new week. The Dow closed sideways, failing to follow through on last Friday's rally. Such a failure totally negates last Friday's rally as a key reversal day and opens up the possibility of more downside to come. In fact, if the Dow doesn't get up significantly over the next 2 days, we could see a visit to the 12000 level. And yes, George Soros may have "predicted" this decline but my analysis are based on pure facts without suspicion of manipulation. "Predictions" always carries a sense of manipulation through the process of self-fulfilling prophesy. I never predict. I only analyse market action through objective indications and facts. So, i am not late at the party... I am just not the one who called the party together.
Oil staged an early rally again today as the Saudi's pledge to increase oil production by 200,000 barrels a day barely offset the effect of a sudden drop in the US dollar. The Empire State Index also turned in worse than expected as it declined to -8.7% in June from -3.2% in May. The Empire State Index tracks manufacturing activity in New York and is gaining importance recently as it seemed to be a leading indicator for the heavy weight ISM index. In fact, we have seen the ISM index struggle over the past few months as the Empire State index went negative. The declining Empire State index once again put economic worry on the center stage but that didn't seem to stop the techs from staging a relatively huge rally. So, we have oil gone crazy and a market gone crazy too as a possible self defeating process starts filtering through the ranks as reality fails to catch up with expectations. How long will the last of the bulls stand? Until reality catches up and turns this into a self reinforcing process? Only time will tell.
TECHNICAL ANALYSIS
What a way to start a new week. The Dow closed sideways, failing to follow through on last Friday's rally. Such a failure totally negates last Friday's rally as a key reversal day and opens up the possibility of more downside to come. In fact, if the Dow doesn't get up significantly over the next 2 days, we could see a visit to the 12000 level. And yes, George Soros may have "predicted" this decline but my analysis are based on pure facts without suspicion of manipulation. "Predictions" always carries a sense of manipulation through the process of self-fulfilling prophesy. I never predict. I only analyse market action through objective indications and facts. So, i am not late at the party... I am just not the one who called the party together.
Labels: fundamental analysis, technical analysis
posted by Jason Ng at 6:11 PM
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