Chart-wise
November 28th, 2007 NW Teong
Purely from chart point of view, US stock markets were already in down trend.
Please note that the chart for Dow had crossed its 200-day moving average (“MA”) which denotes long term down trend. Of course, it had false break in mid June and Mid August of this year. Whether the current down turn is a false break remains to be seen. However, the longer it remains below its 200-day MA, the more certain will be the down trend.
If we look at both STI and Hang Seng Index below, they had similar false break in mid June and mid August of this year. However, while STI had already broken its 200-day MA, Hang Seng Index is still above its 200-day MA.
The bad news is that the Baltic Dry Index is also falling at the moment. I have mentioned many times in my blogs that Baltic Dry Index is a leading indicator for global economy.
All charts courtesy of Yahoo Finance
Hence, a falling index will indicate a slow down in global economy which is probably the case in 2008. As I said in my previous blogs that it is now not advisable to use momentum strategy, in fact it is tough to make good money in a down trend. In fact, we should use value strategy from now onwards. The key question is that, will there be Santa Claus rally at the end of the year? Cheers! .
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2 Comments Add your own
1. dmwr | January 16th, 2008 at 6:19 am
A silly question - how did you get that chart of the Baltic Dry index on Yahoo finance? When I try and use that symbol I get symbol not found. Any trick? Are you on a different country version of Yahoo finance?
Thanks in advance,
dmwr
2. NW Teong | January 16th, 2008 at 9:21 am
Hi, this is not a silly question. In fact, there is a technical problem with yahoo finance I think. What you can do is to get the chart for other indices first, say Dow and then key in the Baltic symbol, i.e. ^BADI at the “Get Chart” space provided on the Dow chart (or any other charts). You can try this trick! Cheers!
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