The Current Stock Market Rally: Is 2009 Like 2002?

By Guy Lerner on July 28, 2009

I have often thought that the 2009 rally resembles the rally off the September 11, 2001 lows that lasted into March, 2002. Even though the causes of the “crisis” are different, there are many noteworthy similarities.In both cases, the bear market had been going on for greater than a year, and like then, investors are now hopeful that the worst is behind us. In the after math of 9/11, there was a lot of hope that America will bounce back. Hey, “we always do” is the phrase. “America is great. America is strong.” (And I don’t doubt our resolve as citizens in this country, but feel good rah rah is not going to get it done when we have real problems to face.) But by March, 2002, economic reality set in leading to one vicious head fake that led to new lows and a more solid base to launch a new bull market.

Is 2009 setting up like 2002? Will economic reality set in? Is the worst really behind us?
The short answer is that the jury is still out on this rally. It has been strong. It looks good as prices breakout to new 9 month highs, but the bulls remain hopeful that the all knowing, all seeing stock market has a crystal ball that can see those things that us normal folks can’t see: better economic times ahead. Most would agree that the economic landscape is frought with landmines.

Investors are clearly under the assumption that the worst is behind us. But as we found out in 2002 for stock prices, the worst was not behind us. Back then, the economy had bottomed as the recession had officially ended in November, 2001, but the market’s bottom was much lower. Currently, signs are pointing to a bottom in the economy as in “things” are not getting worse, and yet with unemployment still rising, we could even argue this point. But I know we can agree that “not getting worse” doesn’t mean that they are going to get better either, and this is were investors remain hopeful.Like 2002, 2009 finds the Federal Reserve extremely accommodative. Liquidity remains abundant. Like 2002, the leading economic indicators in 2009 are improving. Like 2002, the S&P500 (^GSPC) is above its 200 day moving average. Like 2002, we find prices on the S&P500 having closed above its simple 10 month moving average. Yes, the similarities are there.

The S&P500 rally in 2001 and 2002 went from the low on September 21 to a high on March 19. It lasted 123 trading days. From low to high the percentage gain was 21%. The currently rally has gone on 98 trading days since March 6, 2009. Through Friday, the percentage gain on the S&P500 has been 43%! Rather than say that such strength is just a sign of new bull market, I could argue it is just mean reversion of a deeply oversold market.Technically, the current rally is hitting new highs while the 2002 rally ended in a triple top. See figure 1 for a daily graph comparing 2002 (orange line) to 2009 (blue line). This is a clear difference - new highs (2009) v. failure to make new highs (2002).

Figure 1. 2002 (orange) v. 2009 (blue) / daily

For now the current rally has come a long way. A lot of hope is built in. Some may call this “the wall of worry” as the markets continue to climb in the face of bad news. Technically, I look at a market that has been driven higher by short covering -i.e., the “this time is different” scenario - and where stocks are for renting not owning.I still believe that this time period will prove to be a bear market rally, but in my mind, it doesn’t matter what we call it anyway. Simply put this is just not the time or place to jump in with abandon as it is difficult to see how we get there (secular bull market) from here.Does this mean we re-test the March 9, 2009 lows? I think we are a long way from seeing that happen. Stocks would have to move lower, and of course, if they move lower, investor sentiment will become bearish. This will be a buy signal. If this buy signal fails to produce a sustainable tradeable rally, then there is risk that the markets could retest their March, 2009 lows. As I stated, this is a long ways off.

Is 2009 shaping up like 2002? Possibly. As stocks are hitting new highs, investors certainly have put a lot of hope in a recovery that has yet to materialize.

IHSG/FOREX/STODEX ASIA: Aksi profit taking dapat batasi laju kenaikan saham, euro & pound, Nikkei & Hangseng

Market Review
IHSG mendapatkan keuntungan dari kenaikan harga minyak di atas $ 68/barel, penguatan indeks saham regional ke level tertinggi 9-bulan berkat spekulasi pemulihan ekonomi global dan penguatan rupiah ke level tertinggi sejak 4 Juni 2008 (Rp 9,950/USD), mendorong IHSG ditutup di level tertinggi sejak September 2008. Investor mulai mengantisipasi musim earning lokal (PTBA, TLKM, INCO dan BMRI), mengikuti musim earnings semester 1 2009 di AS yang mayoritas emiten melaporkan hasil lebih baik dari perkiraan. Meski imbas kenaikan harga minyak, membatasi kenaikan saham perbankan dan property, karena kekhawatiran kenaikan inflasi yang dapat menghambat laju penurunan suku bunga BI. IHSG menguat 23.447 poin (1.072%) ditutup di 2,209.10. Investor asing masih mencatat net buying kemarin (27/07) sebesar Rp 344.04 miliar, dibandingkan net buying Rp 323.61 miliar (24/07)

Mayoritas indeks saham di Asia menguat untuk hari ke-10, mendorong indeks MSCI Asia Pasific melejit berturut-turut terlama sejak 2004 (naik 11%), berkat keyakinan reboundnya ekonomi regional akan meningkatkan pendapatan. Diikuti data keyakinan konsumen Korea Selatan naik ke level tertinggi 8-bulan dan analis di AS meningkatkan perkiraan pendapatan pertama kali sejak krisis kredit 2 tahun lalu.

IHSG Outlook
Ind P/E (x)
EPS
Y/Y Y/Y Suku Bunga* Inflasi*
Y/Y GDP*
Y/Y
IHSG 13.8 8% -2.12% 6.75% 3.65% 4.4%
STI 19.8 16% -14.7% 0.69% -0.70% -10.1%
KLCI 13.8 10% +1.3% 2.0% 3.00% -6.2%
SET 12.7 4% -11.7% 1.25% -3.30% -7.10%
SSE 41.2 36% +16% 5.31% -1.40% 7.9%
N225 45.1 -1% -26.9% 0.10% -0.10% -9.7%
HSI 24.8 19% -12.5% 0.50% 0.60% -7.80%
DJIA 15.2 3% -18.8% 0.25% -1.4% -2.5%
* Negara Bersangkutan

IHSG diperkirakan mendapatkan kesulitan untuk menguat hari ini setelah melejit dalam 3 hari perdagangan terakhir, di tengah kekhawatiran harga minyak diatas $ 68 (target $ 70/73 barel) dan harga komoditi lainnya dapat memicu kenaikan inflasi yang dapat menghambat laju penurunan suku bunga BI di bulan mendatang, memberikan sentimen negatif kepada saham perbankan, property. Sementara faktor teknikal overbought dapat memicu aksi profit-taking skala minor dalam kondisi uptrend jangka pendek (target 2,425:Q3 2009), karena perkiraan kuatnya resistance di 2,220 (projection 100.0%)/2,256 (pivot). Perkiraan inflasi bulan Juli dari Badan Pusat Statistik (BPS), akan berada di kisaran 0.2%-0.5%, lebih tinggi dari 0.11% m/m di bulan Juni dan spekulasi pertumbuhan ekonomi Q2 2009 RI dirilis minggu depan (perkiraan Menteri Keuangan 3.7% Q/Q; dari 4.4% di Q1) dapat mendorong investor melakukan wait dan see dan tidak melakukan perdagangan dalam jumlah besar, dapat menahan potensi kenaikan IHSG pekan ini. Sementara faktor pendukung untuk kenaikan IHSG dari imbas penguatan rupiah (Rp 9,800/9,900 per dolar), investor asing mencatat net buy sebesar Rp 1.4 triliun dalam 4 hari terakhir, perkiraan positifnya musim earnings emiten lokal semester 1, laporan CIMB-GK upgrade sektor telekomunikasi (TLKM target Rp 9,400), trend kenaikan indeks saham regional dari positifnya musim earnings dan positifnya data ekonomi regional (GDP Q2 China, Korsel, Singapura).

Stock Picks: Average last 5 week +37.51%. Target 10-20%, Risk < -10%.
BOW: BUMI,ANTM,INCO,TINS,WIKA,BMRI,BBKP,PGAS,MEDC,META,INKP,KIJA

Stock Picks:
* CFIN & ELTY

Global Outlook
Hasil earning dari Aetna Inc, RadioShack Corp hingga Verizon Communications Inc mengecewakan pasar, setelah Aetna Inc menurunkan prediksi pendapatan tahun ini, Verizon mengalami penurunan keuntungan, dan penjualan RadioShack sesuai dengan perkiraan pasar, berperan meredam optimisme di indeks S&P 500 di level tertinggi 8-bulan di akhir pekan lalu. Valuasi indeks S&P 500 meningkat ke 16.23 x P/E dari tahun lalu, merupakan level valuasi termahal sejak September dan pemerintah berencana menerbitkan surat hutang baru senilai US$ 205 miliar pekan ini, dapat meredam daya tarik untuk saham dan komoditi. Meski data New Home Sales melonjak 11% ke level tertinggi 3 bulan (384,000), diikuti penurunan suku bunga Libor USD ke level terendah 0.496 kemarin dan analis meningkatkan perkiraan keuntungan emiten AS untuk pertama kali sejak krisis kredit, menjadi 896x untuk indeks S&P500 di bulan Juni dan laporan Morgan Stanley menjadikan saham Bank of America sebagai top pick, seharusnya memberikan support kepada Indeks S&P 500 (target 1,100)/DJIA (target 10,500) menjelang data GDP Q2 AS (31/08; P: -1.5%).

EUR-USD
Euro masih berpotensi menguat berkat pola channel dan pola candle tweezer top menunjukkan indikasi bullish continuation terbatas, didukung oleh indikator ADX naik, stochastic crossing up dan MACD bullish, seharusnya masih mendukung perkiraan kenaikan hari ini. Support berada di 1.4071 (20-day MA)/1.4153 (lower channel), Resistance berada di 1.4335/1.4300. Euro berada di dalam wave proses iii dalam wave 3 zig zag, untuk target $ 1.4330, selama tidak mencapai dibawah 1.4020. Buy 1.4150 & buy 1.4070 target 1.4200, sell break 1.4000 target 1.3880 stop 60p, hold sell 1.4290 & 1.4330 target 1.4150 buy break 1.4350 target 1.45.

USD-JPY
USDJPY masih berada dalam pola bearish uptrend channel di daily chart, meski kenaikan teratas di upper channel 95.31, bilamana ditutup diatas level tersebut akan memutarbalikan trend menjadi netral target 95.85/ (61.8 FE)/96.70. Indikator ADX rebound, stochastic crossup, MACD bearish, seharusnya mendukung peluang kenaikan terbatas selama gagal ditutup diatas 95.30. Resistance berada di 95.60, support di 94.70. Buy 94.60 target 95.50 stop 50p. Sell 95.60 target 93.00. buy 93.50 & Buy 92.60 stop 89.80 target 95.60. Sell 96.70 target 95.00.

GBP-USD
GBP masih berada dalam uptrend channel dalam pola ascening triangle, pola congestion, diikuti indikator ADX menurun, stochastic crossing up dan MACD berada di teritorial bullish, mendukung potensi penurunan terbatas selama tidak ditutup dibawah 1.6311 (lower channel). Buy 1.6380 target 1.6550. sell 1.6550 target 1.6320, buy 1.6100, Sell 1.6660 target 1.6350. Sell break 1.6260 target 1.6100 stop 100p. Buy break 1.6675 target 1.6840.

AUD-USD
AUD berada dalam pola uptrend channel minor dalam downtrend channel, meski pola congestion menunjukkan potensi technical rebound terbatas, diikuti ADX rebound, stochastic crossup, MACD masih bullish, mendukung potensi kenaikan 0.8255/0.8300, selama di bawah 0.7865. Resistance di 0.8258, support di 0.8000. Buy 0.7950 & buy 7870 target 0.8100, hold sell 0.8200 target 0.8000 & hold sell 0.8250 stop 0.8300. sell break 0.8090 target 0.7950.

Nikkei Futures Kontrak September (SSIU9)
Dalam penutupan perdagangan kemarin, indeks Nikkei ditutup menguat 1,45%, dipicu reboundnya saham Nomura Holdings. Selain itu, tumbuhnya kepercayaan investor atas hasil earnings report korporasi Jepang dan prospek pulihnya ekonomi global turut angkat sentimen. Indeks Nikkei .N225 ditutup menguat 144,11 poin, atau 1,45%, ke posisi 10.088,66, level penutupan tertinggi sejak 12 Juni.
Di chart daily, momentum uptrend masih berlanjut setelah indeks ditutup diatas trendline 9959 dan indeks berada dalam uptrend channel, kendati pola candle menunjukkan shooting star (indikasi bearish reversal). Sementara sejumlah indikator masih mendukung potensi kenaikan, ADX trending up, stochastic dan MACD bullish, seharusnya mendukung potensi kenaikan terbatas. Resistance di 10185 (upper channel)/10443). Support 9901 (76.4% FR)/9729 (61.8% FR). Perkiraan range hari ini 9800-10200. Rekomendasi Sell 10185 & 10400 target 9700 stp 100p. Buy 9900 target 10200 stop 100p, Buy 9740 target 10000 stop 50p, sell break 9850 target 9500. (+100+30p) Chart SSIU9 Daily

Kospi Futures Kontrak September (KSU9)
Indeks Kospi ditutup naik 1,43% kemarin, dimana indeks catat kenaikan dalam 10 hari berturut-turut dan juga kenaikan terbesar sejak April 2006. Penguatan Kospi dipicu oleh optimisme pasar atas baiknya serangkaian rilisan laporan keuangan korporasi pada kuartal kedua. Indeks Kospi .KS11 ditutup naik 1,43%, atau 21,46 poin, ke posisi 1.524,05, level penutupan tertinggi sejak Agustus 2008.
Dalam chart daily, indeks masih berada dalam pola uptrend channel dan menembus trendline dalam pola ascending triangle, didukung candle menunjukkan high wave. Kondisi stochastic crossing up, MACD bullish dan ADX trending up, seharusnya masih mendukung potensi kenaikan. Resistance berada di 199.30/200.75. Support di 196.70/193.20. Rekomendasi Sell break 196.60 & 193.00 target 190.00 stop 100p, buy 190.00 target 195.00, buy 185.50 target 183.00 stop 100p. Sell 200.70 & 199.30 target 195.00 stop 100p. (-100-100p) Chart KSU9 Daily

Hang Seng Futures Kontrak Juli (HSIN9)
Indeks Hang Seng ditutup naik 1,35% hari ini, merupakan level penutupan tertinggi dalam 10,5 bulan terakhir. Penguatan indeks Hang Seng ditopang oleh baiknya kinerja saham unggulan seperti China Mobile dan saham properti karena proyeksi meningkatnya permintaan. Indeks Hang Seng .HSI ditutup melonjak 268,83, atau 1,35%, di level 20.251,62, setelah sempat menyentuh level 20.385,69.
Dalam chart daily, indeks berada dalam pola uptrend channel dalam formasi bullish broadening , meski pola candle abandoned baby, ADX meningkat, stochastic crossup, MACD bullish seharusnya membatasi potensi penurunan. Resistance di 20400/20610. Support 19867/19630. Menurut hitungan Elliot wave indeks menunjukkan wave koreksi v (akhir) dalam subwave motive (3) cycle B. Rekomendasi : Sell break 20000 & 19850 target 19650 (or closing) stop 100 p. Buy 19650 target 19950. Buy 19.250 target 19500. sell break 19550 target 19250. buy break 20240 target 20400 stop 100p, sell 20600 target 20150 (-100-100+160p) Chart HSIN9 Daily

Daily Technical Analysis & Elliot Wave Forex/Cross/Gold/Oil/CFD

By Ahmad Mudjo

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Gold Bull Market Guaranteed to Make new Highs During 2009

By: Douglas_V._Gnazzo

Commodities
Diamond Rated - Best Financial Markets Analysis ArticleGold - For the week gold gained $14.10 (+1.50%) to close at $951.50 (continuous contract). This was the highest weekly close in the last seven weeks, so it is a positive development, especially if it holds.The daily chart below shows gold approaching overhead resistance, as represented by the late March high, which is marked by the upper white horizontal line on the chart.

Two important things to notice: higher lows have occurred; but so far higher highs have not occurred. For a bull market to obtain – higher highs must eventually develop. As long as the higher lows hold, all is well. Lower lows would call into question the validity of the gold bull market thesis.
It is my opinion that we are in a secular bull market of huge proportions and that gold will make higher highs before the New Year arrives, as the second chart that follows suggests.

Below is the weekly gold chart. Evidence the head & shoulders formation at the right hand side of the chart.Until neckline resistance at the $1000 price level is broken above on expanding volume, AND holds; the formation is only potential, not reality.
IF (?) it is confirmed, the upside target is $1300 ($1000 minus $700 = 300 - $1000 plus $300 = $1300). It could be less; or more, but at that point gold would be overbought; however, the stock market has been showing just how long overbought can obtain and get even more overbought. It is a lesson well worth remembering.

Investors Place Bets on Global Economic Recovery, Propelling Stocks Higher

By: Prieur_du_Plessis

Stock-Markets
Diamond Rated - Best Financial Markets Analysis ArticleGoodbye safe havens, hello risky assets” seemed to be the theme during the past week as investors placed their bets on a global economic recovery, propelling stocks and other risky assets higher amid better-than-expected earnings reports and tentative signs of stabilization in the US job and housing markets.














Source: Jerry Holbert, Comics.com, July 23, 2009.
Not only did the Dow Jones Industrial Index on Thursday breach 9,000 for the first time since January and the Nasdaq Composite Index notch up a streak of 12 consecutive advancing days, but other global stock markets, commodities, oil, precious metals, high-yielding currencies and corporate bonds also put in a stellar performance as a bullish mood prevailed.Bonds and other safe-haven assets such as the US dollar and Japanese yen were out of favor as investors sought higher returns elsewhere. Also, the CBOE Volatility Index (VIX), or “fear gauge” was at its lowest level (23.1) since before the Lehman collapse in September.The past week’s performance of the major asset classes is summarized by the chart below - a set of numbers that indicates an increase in risk appetite.