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Sunday, 30 December 2012

Russell 2000 (US Market): 30 December 2012, Sunday, 10.40am Singapore Time

Russell 2000 (US Market): 30 December 2012, Sunday, 10.40am Singapore Time


In Donovan Ang's Theory, "Russell never lies"; the implication is that this is one Technical Analysis that cannot be missed if one is lost in the directions of DJIA, NASDAQ, S&P500 or international market directions due to the recent fiscal cliff sell-downs. 

Referring to the Technical Analysis, having met the mid-long term classical resistance of 846.83-867.88 points several times since 2011, Russell 2000 is still trying to break this resistance band; the Russell 2000 hit this resistance band again in December 2012, got resisted and sold down all together with the DJIA, NASDAQ and S&P500. This sell-down was previously warned to happen using Donovan Daily International Funds Flow Analysis before it came, and they indeed came nastily in the US markets last week and the week before.

However, this nasty selling in the US markets will pose an opportunity to buy on comeback boat and not for you to sell; it is but to buy on significant comeback dip for the resumption of bull markets worldwide in 2013.

The Russell 2000 is currently at a point where tough resistance meets strong support. The YELLOW ZONE  will continue to act as powerful launchpad support to break up the 846.83-867.88 points resistance while the resistance band will do the vice-versa. Whichever breaks, be it the support or resistance, it will set the clear-cut direction.

As the bear market structure had been negated as illustrated above in the chart, it means the US market will continue to be bullish, and hence it will be the support (YELLOW ZONE) that will hold and the resistance will break. Furthermore, while trying to break the resistance, a bullish ascending triangle had been formed. 

The break up, when it comes, will cause the entire US markets to be very bullish and rally in 2013, contrary to popular bearish beliefs of a recessional and bearish US economy. This bullishness will continue to diffuse into world markets (Asia and Europe). Worldwide markets will rocket in 2013 in essence. A rising tide lifts all boats and almost all stocks will rise (of course, individual stocks will be subjected to the differential fundamentals of each respective company; strong stocks will rise more than weak stocks, and lousy companies will rise way less or not rise compared to strong and quality ones).

Properties in Asia and Singapore will continue to go up strongly in 2013; so will stocks, equities and commodities worldwide. European Markets, US Markets and Asian Markets will continue to go up next year after this immediate-short term sell-downs (DAX, CAC, FTSE-UK, STOXX 50, NASDAQ, DJIA, SPX, HSI, STI, KOSPI, KLSE, SSE etc).

January 2013 continues to post high risks of nasty sell-downs for shake-outs (short term); however, worldwide markets will climb over all walls of worries in 2013 (mid-long term).

Side Note:
On another personal side note, the hot monies has been especially die hard fans of Emerging Markets. As properties will be hot in Asia such as Hong Kong and Singapore, it is now good in 2013 to stay invested in properties and property stocks such as Cheung Kong Holdings, Sino Land, Sun Hung Kai Properties, Henderson Land Development, Capitaland, Keppeland, City Development, Yanlord, Wing Tai, Ho Bee, Singapore Land, and UOL. These will be strong stocks in strong sectors of strong economies in 2013 and represents strong investment holdings. For international investors, besides local brokerages, these are also available in CityIndex and Igmarkets etc. International investors will benefit not only in stock appreciation but also from forex terms (Hong Kong Dollar with appreciating pressures pegged within a band and Singapore Dollar appreciation). Double gains.

Donovan's Market Analysis:

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