Friday, February 26, 2010
As the graph below shows: after a massive recovery from the March 2009 lows, Indian equities have been trending sideways since July 2009.
Market watchers will be looking for more sops to the agriculture sector and the infrastructure sector, and a possible gradual roll back of excise duty cuts and the stimulus package. A hike in service tax is also widely expected.
So far we are yet to hear anything on reforms towards market pricing in the Petroleum sector.
With Oil prices trading just under $80, maybe we will hear more on the governments subsidy sharing plan.
Let's see how it goes.
Monday, February 22, 2010
Tuesday, February 16, 2010
Bailout the weak nations of Europe, support the US housing market, maybe even support weaker states within the US.......................miles to go before we sleep.
This is a ginormous figure!
Below is David Rosenberg's chart of the Fed's Holding of MBS!!
So are we witnessing a market driven recovery in the US housing market or simply one that has been supported by the US FED buying $1 Trillion worth of MBS ?
Are they AAA rated MBS ? ? ?
Wonder how the finances of Freddie Mac and Fannie Mae are doing ??
Monday, February 15, 2010
Here's a chart from Chart of the day.
It's clear that gold prices have corrected from the ''red'' resistance line.
Are we headed for a sideways correction like the mid 2006- September 2007 correction ?
Will prices test the lower green support line if Wall Street has another 'mega' correction ?
The fact that stock market earnings estimates for 2010 & 2011 are far too optimistic, not to mention that most of the appreciation is already factored into stock prices makes me more concerned that we could see a correction in stock prices that forces gold prices back to the ''green '' line this summer.
This would mean a pull back to levels around $950. That's only $140 below current prices.
Short term pain in a long term gold market !!
Panic selling affects all markets equally, so I don't think gold will be spared if there is a broad market sell off, although I do expect gold to outperform other commodity markets.
Lastly, I would like to remind readers who are looking to buy 'silver', that it is more volatile than gold, so it will correct more than gold!
Saturday, February 13, 2010
'A look before you leap' investment policy is best advised for investors looking to buy into precious metals. Stagger your investment over reducing price limits rather than buying everything at one go.
I think Mr Maund is quite right to be cautious on PMs at this stage. The equity markets are looking shaky and more signs of trouble in the Euro zone could trigger a sell off, resulting in a flight into the ''safe'' USD.
A rallying USD, would force a sell off in PMs as speculators and punters start to capitulate.
I'm setting my limits at lower levels, but I'm not buying anything just yet!