The equity markets globally are very jittery - US recession looming. As such, we have bearish sentiments all over. No one knows for sure how long this is gonna take, may be until Fed cut rate? Some fantastic economic indicators crop up?
Its also reporting season (for Q4 2007) & analysts have been extra bullish in their forecasts. Any announcement not up to mark will be met with vicious punishment to the stock price. And after that analysts will revise their numbers downwards - more bad news.
That said, for now - I'm still bearish. 1 week: bearish or flat.
On technical analysis:
Note that weekly chart for equity markets - mostly show Head & Shoulder patterns (bearish again). E.g. S&P 500 .. my next target would be 1250 (its about 1352 now).
So, the best bets would probably be:
- Short equity futures, may be a stop if RSI overshoot downward eg below 20
- Long bond/treasuries
- Long agriculture commodity futures
All that said, I might be wrong altogether. I'm no Nostradamus. Check out this link. 14 winning strategies for a bear-market recession - MarketWatch
Wednesday, 16 January 2008
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