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Robert Prechter: These 6 Trends Are About To Reverse
The U.S. market has reached consensus on six key issues and that means the trend may be about to reverse, according to The Elliott Wave Theorist Robert Prechter.
Prechter explains this trend reversal through events in the 1980's. Here, investors and economists believed there was no way interest rates would go down, with the Wall Street Journal writing it would take a " miracle" for a decline in 1984. And yet, it happened.
Image: The Elliott Wave Theorist
From Prechter:
Any individual can be wrong about markets. In the past when I have been wrong I realized in retrospect that either I was a member of a herd or I bet too early against one. But the fact remains that when representatives across an entire profession of exogenous-cause thinkers agree on the future trend of a market, it’s a signal.
The lessons are: (1) Any passionate consensus among economists is a terrific market timing signal, because it means that there is no one left to convince and therefore the market in question should have extreme difficulty continuing in the predicted direction and (2) an alert analyst can learn to recognize these times and use them to advantage.
Prechter argues there are several themes out there right now that investors, economists, and markets all believe to be true just like they did with interest rates in the 1980s.
- The dollar - everyone is bearish.
- Interest rates - everyone thinks they're going to rise.
- The stock market - everyone is bullish but corporate insiders.
- Inflation expectations - everyone thinks it is going to go higher.
- Economy - everyone is confident in 2011.
- Oil - everyone thinks it is heading higher.
It may be time for investors to turn on these trends, and bet the opposite way, according to Prechter.
Euro Extends 4-month Peak Versus Dollar
(RTTNews) - The euro remained strong against the dollar on Monday, touching a fresh 4-month peak before leveling off in mid-morning action.
Traders continued to bet the European Central Bank will respond to inflationary pressures by starting a cycle of tightening measures in April.
At the same time, the Federal Reserve in the U.S. is seen sticking to its controversial asset purchase plan and near-zero interest rates for what it has said will be " an extended period."
The euro briefly broke above $1.42 this morning, its highest since November. A move above $1.4282 would take the euro to its highest since January 2010.
The euro was stuck in an unusually tight trading range against the yen, as traders waited for further action from Japanese officials who were forced into action last week to halt the rapid appreciation of the yen.
The euro was steady at Y115 today, having fallen as low as Y106.44 last week, before the G7 intervened to weaken the yen.
Versus the Swiss franc, the euro improved to CHF 1.2840, staying away from a record low of CHF 1.24 set a few months ago.
In economic news from the U.S., existing home sales were down 9.6 percent in February, well below expectations. An annualized rate of 4.88 million fell w short of estimates for 5.15 million.
On Wall Street, the Dow jumped back above 12,000. Meanwhile, crude prices rose above $102 on escalating violence in Libya.
Euro Extends 4-month Peak Versus Dollar
(RTTNews) - The euro remained strong against the dollar on Monday, touching a fresh 4-month peak before leveling off in mid-morning action.
Traders continued to bet the European Central Bank will respond to inflationary pressures by starting a cycle of tightening measures in April.
At the same time, the Federal Reserve in the U.S. is seen sticking to its controversial asset purchase plan and near-zero interest rates for what it has said will be " an extended period."
The euro briefly broke above $1.42 this morning, its highest since November. A move above $1.4282 would take the euro to its highest since January 2010.
The euro was stuck in an unusually tight trading range against the yen, as traders waited for further action from Japanese officials who were forced into action last week to halt the rapid appreciation of the yen.
The euro was steady at Y115 today, having fallen as low as Y106.44 last week, before the G7 intervened to weaken the yen.
Versus the Swiss franc, the euro improved to CHF 1.2840, staying away from a record low of CHF 1.24 set a few months ago.
In economic news from the U.S., existing home sales were down 9.6 percent in February, well below expectations. An annualized rate of 4.88 million fell w short of estimates for 5.15 million.
On Wall Street, the Dow jumped back above 12,000. Meanwhile, crude prices rose above $102 on escalating violence in Libya.
Ya. libya story still continue. friday (2030hrs), usa will be announcing gdp, ah ben speak on thurs + initial jobless claim, BOE MPC talkin about interest rate on wed, and ECB president trichet talkin tonite, may influence the eur value.
A policy maker week?
I think, check with risktaker, he got only one issue :))
rotijai ( Date: 21-Mar-2011 21:44) Posted:
ooo..
but libya situation now is very uncertain.. anything can happen :/
i think cpi will still be bad at the moment for feb...
krisluke ( Date: 21-Mar-2011 21:33) Posted:
hmm, libya and japan can consider old news liao.
this weeks quite heavy on cpi and gdp... kickoff with hongkong(tue) and singapore(wed |
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Monday, 21 March 2011 10:31
BEIJING/SHANGHAI: Chinese interest rate swaps and money market rates rose on Monday after the central bank unexpectedly raised banks' required reserve ratio (RRR) last Friday.
The latest increase in required reserves, the third so far this year, will lock up roughly 350 billion yuan ($53.3 billion) at the central bank that could otherwise have been lent out.
Investors had been anticipating further monetary tightening steps after the annual session of parliament, which ended March 14, including potentially this year's second benchmark interest rate rise.
However, such expectations had eased recently after the earthquake, tsunami and nuclear crisis in Japan, leading to excessive falls in IRS and money market rates in the past week.
" In that sense, the tightening is less than previously expected," said a trader at a state-owned bank in Beijing.
He said there was no fundamental change in liquidity conditions as the central bank had ended punitive reserve ratio rises for some banks before raising the industry-wide RRR.
The benchmark five-year IRS, which had plunged 76 basis points over the past month, was up 17 basis points at 4.04 percent at midday, and may find a floor at around 4 percent, traders said.
However, that did not imply any heightened expectations of interest rate rises, as reflected by the fact that the yield on the benchmark five-year government bond remained unchanged at 3.52 percent.
" Of course, further interest rate increases cannot be ruled out, considering inflationary pressure in the first half," said the trader.
" But there are no strong expectations now. Some are actually saying that we are near the end of this round of interest rate rises," he said.
The People's Bank of China (PBOC) has drained net funds through bills and bond repurchase agreements in each of the last two weeks, which was part of the reason behind the hope that Beijing may not turn to harsher tools, including RRR rises.
" Open market operations are a must, but can only fine-tune liquidity," said Shi Lei, a senior analyst with Ping'an Securities in Beijing.
Close to 750 billion yuan in central bank bills are set to mature by the end of April, putting extra pressure on China to find ways to drain liquidity.
That, together with rising foreign exchange reserves and a possible rebound in bank loans in April, will probably prompt the central bank to raise the reserve ratio again in around a month, Shi said.
On Monday, the weighted average seven-day bond repurchase rate, the main barometer of short-term liquidity supply, moved up to 2.9727 percent at midday from Friday's close of 2.0245 percent.
It is expected to edge up further in the run-up to banks' actual payment of the required reserves on Friday, then ease back again, traders said.
ooo..
but libya situation now is very uncertain.. anything can happen :/
i think cpi will still be bad at the moment for feb...
krisluke ( Date: 21-Mar-2011 21:33) Posted:
hmm, libya and japan can consider old news liao.
this weeks quite heavy on cpi and gdp... kickoff with hongkong(tue) and singapore(wed)
rotijai ( Date: 21-Mar-2011 21:22) Posted:
one issue?
i thought there are 2? both japan and libya havent been solved ye |
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hmm, libya and japan can consider old news liao.
this weeks quite heavy on cpi and gdp... kickoff with hongkong(tue) and singapore(wed)
rotijai ( Date: 21-Mar-2011 21:22) Posted:
one issue?
i thought there are 2? both japan and libya havent been solved yet
risktaker ( Date: 21-Mar-2011 21:17) Posted:
| tonight dow.might not close good. take some.profit if u can. buy back end of the week or next week. theres one issue that we would like to see how it go from here |
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china just increased bank reserve last friday. i doubt they will increase the interest rate this coming week.
probably beginning or mid of april
krisluke ( Date: 21-Mar-2011 21:24) Posted:
i think is china bank decision on interest rate thingy. shall see S& P 500 for more hints. the potatos are seeking refugee camp in dj 30... |
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i think is china bank decision on interest rate thingy. shall see S& P 500 for more hints. the potatos are seeking refugee camp in dj 30...
one issue?
i thought there are 2? both japan and libya havent been solved yet
risktaker ( Date: 21-Mar-2011 21:17) Posted:
tonight dow.might not close good. take some.profit if u can. buy back end of the week or next week. theres one issue that we would like to see how it go from here.
rotijai ( Date: 21-Mar-2011 21:02) Posted:
| u mean this friday? or last friday |
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tonight dow.might not close good. take some.profit if u can. buy back end of the week or next week. theres one issue that we would like to see how it go from here.
rotijai ( Date: 21-Mar-2011 21:02) Posted:
u mean this friday? or last friday?
risktaker ( Date: 21-Mar-2011 20:43) Posted:
| Do not short the mkt. buy on dip by end of the week. you should.know when to take profit. which is one thing u have to learn yourself. greed or fear :) |
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u mean this friday? or last friday?
risktaker ( Date: 21-Mar-2011 20:43) Posted:
| Do not short the mkt. buy on dip by end of the week. you should.know when to take profit. which is one thing u have to learn yourself. greed or fear :) |
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i would like to dedicated the song " heal the world" by micheal jackson, to all forumers.
http://www.metacafe.com/watch/844121/michael_jackson_heal_the_world/
now is democratic, not republician in usa. it about war again. it can be a " holy" war to tackle inflation.
I mean, don't harm those peaceful citizens in libya, they're innocent.
Do not short the mkt. buy on dip by end of the week. you should.know when to take profit. which is one thing u have to learn yourself. greed or fear :)
make $ from risk taker advice ? yes, congrats.
rotijai ( Date: 21-Mar-2011 20:34) Posted:
thanks :)
seems like if there's nth bad happen this week, sti might rally to 3040..
risktaker ( Date: 21-Mar-2011 15:27) Posted:
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Politics In 60 Seconds: What You Need To Know Right Now
Good morning! Here's what you need to know right now:
1. U.S. and allied forces have escalated their assault on Qaddafi's forces, launching strikes against ground troops as the mission moved beyond the establishment of a no-fly zone. The Europeans are vehemently denying Qaddafi's claims of civilian casualties.
2. U.S. intelligence is keeping its eye on Libya's huge supply of mustard gas and explosives, waiting for signs Qaddafi could launch terrorist attacks on Western targets and civilians. So far, though, U.S. officials say they are not targeting the Libyan leader.
3. Tanks and armored vehicles were deployed in Yemen today after three top army commanders gave their support to opposition protesters. The defections come one day after the president fired his cabinet over the deaths of at least 45 people at the hands of government forces.
4. Protesters in Syria clashed with security forces for the third straight day Sunday, setting fire to government buildings in the southern city of Dara'a. Police officers fired live ammunition into the crowds, killing at least one, the NYT reports.
5. Egyptians approved a series of constitutional amendments in a historic - and largely fraud-free - vote Saturday, paving the way for parliamentary elections within months. Protest leaders criticized the rushed timeline set forth in the amendments which are supported by the Muslim Brotherhood and the ruling party.
6. The huge earthquake and tsunami in Japan last week caused up to $235 billion in damages, making it one of the most expensive natural disasters on record, the World Bank said Monday. So far, the death toll is more than 8,000 and another 13,000 people are still missing.
7. U.S. energy officials said they are doing a complete review of procedures at the country's nuclear energy facilities in the wake of the Fukushima Daiichi crisis. N.Y. Gov. Andrew Cuomo said over the weekend that he plans to go over concerns about the safety of the Indian Point plant located north of N.Y.C.
8. The city of Costa Mesa, Calif., has laid off nearly half of its workforce due to rising pension and personnel costs. One maintenance worker committed suicide by jumping off the city hall roof after receiving his layoff notice.
9. On her first trip to India this weekend, Sarah Palin talked tough on China and said she is still thinking about making a presidential bid in 2012.
10. President Barack Obama moves to Chile today, where he is expected to outline his vision for U.S. relations with Latin America. He'll also take questions on Libya, the BBC reports.
thanks :)
seems like if there's nth bad happen this week, sti might rally to 3040..
risktaker ( Date: 21-Mar-2011 15:27) Posted:
hope u guys got some :)
risktaker ( Date: 20-Mar-2011 15:38) Posted:
My friends just told me they gonna buy up some shares tomorrow ---- BOSAYOR
1) SembMar
2) Singtel
3) Wilmar
4) UOB
5) DBS
6) OCBC
Good Luck. |
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Insurance Giant Swiss Re Says The Japan Quake Will Cost It $1.2 Billion
Reinsurance giant Swiss Re says it expects claims of $1.2 billion on damages associated with the Japanese earthquake,
according to Bloomberg.
Shares of the company are up nearly 2% in European trading today, as many expected this claims number to be much worse.
One reason this number may be so low is because the Japanese government provides earthquake insurance for individuals homes, and doesn't re-insure that risk abroad.
The industry may still be in trouble, however. Earlier on in the crisis, Citi analyst Keith Walsh said he expected as much as $35 billion in insured property losses. Eqecat, the catastrophe modeling company, says it will likely top out at $25 billion.
10 Thingy You Need To Know Before The Opening Bell
Good morning. Here's what you need to know:
- Asian markets were higher in overnight trading, with the Hang Seng up 1.73%. The Nikkei was closed for a holiday. European markets have blasted higher this morning, and U.S. futures suggest a positive open.
- As a result of the chaotic situation in the Middle East, oil prices have spiked higher. Crude futures now at nearly $103 and Brent prices are over $115.
- Nissan intends to restart its production line in Japan this week, with six plants coming online today. Assembly of finished cars will restart Thursday.
- Boeing has flown the first test flight of its new 747-8 Intercontinental jumbo jet. The jet should hit the market by the end of 2011.
- Existing home sales data is released at 10:00 AM ET. The consensus is for an annualized 5.15 million in sales for the month of February. Follow the release at Money Game >
