Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19
Central Banks Move To Keep The Global Markets Party Rolling – Part III - 14th Aug 19
You Have to Buy Bonds Even When Interest Rates Are Low - 14th Aug 19
Gold Near Term Risk is Increasing - 14th Aug 19
Installment Loans vs Personal Bank Loans - 14th Aug 19
ROCHE - RHHBY Life Extension Pharma Stocks Investing - 14th Aug 19
Gold Bulls Must Love the Hong Kong Protests - 14th Aug 19
Gold, Markets and Invasive Species - 14th Aug 19
Cannabis Stocks With Millennial Appeal - 14th Aug 19
August 19 (Crazy Ivan) Stock Market Event Only A Few Days Away - 13th Aug 19
This is the real move in gold and silver… it’s going to be multiyear - 13th Aug 19
Global Central Banks Kick Can Down The Road Again - 13th Aug 19
US Dollar Finally the Achillles Heel - 13th Aug 19
Financial Success Formula Failure - 13th Aug 19
How to Test Your Car Alternator with a Multimeter - 13th Aug 19
London Under Attack! Victoria Embankment Gardens Statues and Monuments - 13th Aug 19
More Stock Market Weakness Ahead - 12th Aug 19
Global Central Banks Move To Keep The Party Rolling Onward - 12th Aug 19
All Eyes On Copper - 12th Aug 19
History of Yield Curve Inversions and Gold - 12th Aug 19
Precious Metals Soar on Falling Yields, Currency Turmoil - 12th Aug 19
Why GraphQL? The Benefits Explained - 12th Aug 19
Is the Stock Market Making a V-shaped Recovery? - 11th Aug 19
Precious Metals and Stocks VIX Are About To Pull A “Crazy Ivan” - 11th Aug 19
Social Media Civil War - 11th Aug 19
Gold and the Bond Yield Continuum - 11th Aug 19
Traders: Which Markets Should You Trade? - 11th Aug 19
US Corporate Debt Is at Risk of a Flash Crash - 10th Aug 19
EURODOLLAR futures above 2016 highs: FED to cut over 100 bps quickly - 10th Aug 19
Market’s flight-to-safety: Should You Buy Stocks Now? - 10th Aug 19
The Cold, Hard Math Tells Netflix Stock Could Crash 70% - 10th Aug 19
Our Custom Index Charts Suggest Stock Markets Are In For A Wild Ride - 9th Aug 19
Bitcoin Price Triggers Ahead - 9th Aug 19
Walmart Is Coming for Amazon - 9th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Stock and Financial Markets Crash is Coming, Key Signs of Reversal

Stock-Markets / Financial Crash Feb 03, 2012 - 05:41 AM GMT

By: FNN24


Diamond Rated - Best Financial Markets Analysis Article2012 has begun with a bang for risk assets and there is no doubting the rally. Never trade your bias. You may want the markets to crash for the cause of the crisis that the world faces, but markets were never created to reflect the reality. It is a facade and there are rules of the game. If you obey the rules unwavering, you will make money. FNN24 in association with Deutsche Boerse provides real time news and FNN24 traders provide quant based trading analysis.

We provide a part of the premium analysis here which cover both Macro and Technical analysis.

US Manufacturing
The ISM index for manufacturing increased to 54.1 in January from a downwardly revised 53.1 (originally reported as 53.9) that reflects new seasonal factors. This level is the highest since June and consistent with a moderate expansion. The consensus was a gain to 54.5. The increase parallels the positive trend in other manufacturing surveys. Only the Chicago PMI decreased in January, but from an exceptionally high level. Details were somewhat mixed: Production declined 3.2 to a still-high 55.7, possibly on the phasing out of incentives for capital expense items at the end of 2011. The forward-looking new orders component gained 2.8 to 57.6, the highest since April. The employment sub-index slipped 0.5 to 54.3. Outside the components of the headline index, new export orders were up another 2.0 to 55.0. The solid increase in foreign demand puts fears about negative spillovers from the global economy into perspective. Also on the positive side, the backlog of orders index increased 4.5 to 52.5, indicating a greater backlog for the first time since May. On the other hand, the indices on both own inventories and customers’ inventories increased in January, reflecting the recent build-up in stockpiles which may damp future production. In sum, the report indicates that the manufacturing sector continues to improve, consistent with a moderate expansion of the overall US economy (chart).

China PMI
China’s manufacturing PMI, a general indicator of the overall Chinese manufacturing and industries sector, failed to beat expectations and fell to its lowest level since February 2009. The June figure came in at 50.9, lower than a surveyed 51.5 and previous 52.0. A reading of above 50 means the sector is expanding, while a figure below 50 would indicate a shrinking manufacturing economy.

Japan Industrial Production
Japanese industrial production was up considerably in December 2011, by 4.0% monthon-month. The downtrend, which had been in place since mid-year, seems to have come to an end. Stable domestic demand and sufficient energy supply should continue to support industrial output. As a result, overall growth will probably be more dynamic during the first half of the year.

Following a decline in November, industrial manufacturing and mining output was up strongly in December, by 4.0% month-on-month. This outcome exceeded expectations Corporates believe that production will rise by another 2.5% in January. The industrial sector is well on the way towards offsetting the drop in production seen after the floods in March 2011. The rise in output was mainly supported by the automotive sector and electronic information and communication devices.

Following the disaster in March 2011, the Japanese industry quickly recovered some of the losses at first. However, the trend (three-month average) pointed downwards from mid-2011 (see chart). Industrial production was dampened by a slowdown in important export countries and by the yen appreciation. Later, the floods in Thailand interrupted supply chains and weighed on industrial output. The recent, strong data seem to have put an end to the downward trend. We expect industrial output to rise further in the next few months. In particular, reconstruction activities after the floods should generate stable domestic demand. Sufficient energy supply and the rebuilding of supply chains should ensure adequate production capacities.

While analysts across are negative on Japan, the corporates in Japan are richest in the world in terms of Net Debt levels. Every major block of Yen buying over the last 5 years has been led by a major Japanese corporate in a bid to protect and hedge their sales. This even while BOJ has solde over USD 50 bn worth of Yen.

German Retail Sales
German retail sales surprisingly declined in December, by 1.4% month-on-month. In real terms, Christmas retail sales were even down year-on-year in 2011. Nevertheless, private consumption probably increased in the final quarter of 2011. Consumption should continue to support German growth in the coming quarters.

What conclusions can be drawn for private consumption as a whole? On average, retail sales were down 0.7% quarter-on-quarter in the fourth quarter. However, there is no 1:1 relationship between retail sales and overall consumption. After all, retail spending by private households amounts to less than one-quarter of overall consumption. We believe that private consumption continued to rise slightly in the fourth quarter. The palpable increase in employment and significant wage growth should make sure that private consumption stabilises the German economy in 2012; we expect consumption to grow by an estimated 1.25%.

BDI Index

On the technical front, Bond market and FX charts are analysed here.

Bond markets
German Bunds

US 10 Year price

Dollar Index


EUR/USD daily charts

EUR/GBP daily charts


Strong bunds and falling yields have made YEN more powerful than any currency. AUD is the king of risk trades. When two titans meet, the outcome will decide the dominant trend. Needless to say the winner here till now is still the YEN. AUDJPY on the charts above needs to take out 82.3 level which we expect to be taken out in 2012 (in keeping with our premium analysis dated 30 Jan 2012), is facing immediate headwinds as it fights of at 81 levels.


There has been a total of 37 times when the markets have been up in January. Elections have been held in 8 such years when January returns have been positive. Every time of those 8 years, markets have been up more than 5% for the year, 7 times it has been up over 10% for the year and 3 times it has been up over 15%.

On an average, when the January return is positive, markets have closed 15% positive for the year. More importantly, the markets have never even lost money in a election year when January returns have been positive.

FNN24 is premium FX trading group which provides premium FX and futures trading signals to retail audience. In association with Deutsche Boerse, FNN24 provides real time Forex and trading news. We provide timely, relevant, and critical insight for market professionals and those who want to make informed investment decisions. It is not just news but news analysis, linking breaking news to the effects on capital markets. The credibility for delivering mission-critical information has been built over three decades. The quality and experience of MNI’s 60 journalists in 12 bureaus across America, Asia, and Europe truly set us apart from other news sources. In addition to news, we also release weekly research reports on bond and FX markets.

Please check products page


Head of Research FNN24 Singapore, Mumbai, London, NY Home


FNN24 provides real time news bullets and economic indicators with sub second latency helping the retail trader with contextual mission critical information/data. Never miss another trade due to delayed data.

Bio: Head of Research, FNN24 a 24 hour news bullet service for the retail trader providing economic indicators with sub second latency. Never miss anothe trade due to delayed data.

© 2012 Copyright FNN24 - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules