09 JULY 2012
How To Play The Stock Market In July?
By Daniel Loh
The non-farm payroll on Friday proved to be worse than expectations and the Dow Jones Industrial Average closed 120 points down. At one point during the day, it decreased 190 points. We expect Asia to have a down day on Monday. In our last article, we warned our readers of the possibility of the jobs number missing forecast after our research.
Our article on 3 July:
http://www.sharesinv.com/articles/2012/07/03/will-we-have-a-recession-with-the-poor-ism-report/
The important thing is, what should be our next step?
In our opinion, we should follow the next three trading days from Monday to Wednesday very closely. If the market rebounds, it will indicate that Wall Street expects the Fed chairman to announce a quantitative easing (QE3) on 31 July, when there is a Federal Open Market Committee meeting. That will mean that the poor jobs number is actually a catalyst to the stock market! A good indication of bullishness would be a triple digit gain in Dow Jones in a single day or three consecutive up days! You might want to take the chance to enter some bullish position.
There is a good possibility that is how July will be played out. For this month, the Wall Street might be betting on the likelihood of a QE3 again. Do remember that in trading, it is always good to “BUY on Expectations and SELL on Fact”. Make sure we sell our stocks before 31 July. There is still a likelihood that there would not be a QE3 afterall.
But, if the market goes slow or drops in the first three days of trading this week, it may mean that the aftereffects of the poor jobs numbers are still felt. We probably need to be a bit patient to wait for any reversal at the end of the week or next week.
Our US Market Sentiment indicator also shows that New York Stock Exchange and Nasdaq Stock Exchange stocks have both turned bullish. And this often means bullishness in the market. Previously, we had warned our readers to take note that our Market Sentiment Indicator has turned bearish in April. This indicator has served us well these two years.
Check out our daily Market Sentiment Indicator in our blog:
http://www.danielloh.com/2012/07/market-sentiment-indicator-for-4-july_06.html
In my opinion, I do not expect July to be bad at all. In fact, I am optimistic about July because of the QE3 hype and the start to the earnings season. Starting from Monday, almost all US companies will start to release their earnings reports in this coming two months and the media will start to turn their attention to companies’ earnings.
Problems in Europe have also subsided a bit because of Euro 2012 and Germany’s willingness to relent. China has cut interest rate a second time in one month. Hence, I believe that China’s stock market may be picking up soon. Commodities and energy related stocks have also reached a bottom because of China.
Source/Extract/Excerpts/来源/转贴/摘录: http://www.sharesinv.com
Publish date:09/07/12
How To Play The Stock Market In July?
By Daniel Loh
The non-farm payroll on Friday proved to be worse than expectations and the Dow Jones Industrial Average closed 120 points down. At one point during the day, it decreased 190 points. We expect Asia to have a down day on Monday. In our last article, we warned our readers of the possibility of the jobs number missing forecast after our research.
Our article on 3 July:
http://www.sharesinv.com/articles/2012/07/03/will-we-have-a-recession-with-the-poor-ism-report/
The important thing is, what should be our next step?
In our opinion, we should follow the next three trading days from Monday to Wednesday very closely. If the market rebounds, it will indicate that Wall Street expects the Fed chairman to announce a quantitative easing (QE3) on 31 July, when there is a Federal Open Market Committee meeting. That will mean that the poor jobs number is actually a catalyst to the stock market! A good indication of bullishness would be a triple digit gain in Dow Jones in a single day or three consecutive up days! You might want to take the chance to enter some bullish position.
There is a good possibility that is how July will be played out. For this month, the Wall Street might be betting on the likelihood of a QE3 again. Do remember that in trading, it is always good to “BUY on Expectations and SELL on Fact”. Make sure we sell our stocks before 31 July. There is still a likelihood that there would not be a QE3 afterall.
But, if the market goes slow or drops in the first three days of trading this week, it may mean that the aftereffects of the poor jobs numbers are still felt. We probably need to be a bit patient to wait for any reversal at the end of the week or next week.
Our US Market Sentiment indicator also shows that New York Stock Exchange and Nasdaq Stock Exchange stocks have both turned bullish. And this often means bullishness in the market. Previously, we had warned our readers to take note that our Market Sentiment Indicator has turned bearish in April. This indicator has served us well these two years.
Check out our daily Market Sentiment Indicator in our blog:
http://www.danielloh.com/2012/07/market-sentiment-indicator-for-4-july_06.html
In my opinion, I do not expect July to be bad at all. In fact, I am optimistic about July because of the QE3 hype and the start to the earnings season. Starting from Monday, almost all US companies will start to release their earnings reports in this coming two months and the media will start to turn their attention to companies’ earnings.
Problems in Europe have also subsided a bit because of Euro 2012 and Germany’s willingness to relent. China has cut interest rate a second time in one month. Hence, I believe that China’s stock market may be picking up soon. Commodities and energy related stocks have also reached a bottom because of China.
Take a look at the price of Corn trust fund, this as an indication:
To sum it up, I do not expect a poor market in July because of global market changes, earnings season and market speculation of QE3. And remember, US elections is happening in four months’ time. Do take note of opportunites to buy instead of sell.
Source/Extract/Excerpts/来源/转贴/摘录: http://www.sharesinv.com
Publish date:09/07/12
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