Outcome of the rare tip

As you probably know, the US is the world’s largest economy. When she sneezes, the rest catch a cold. The US nonfarm payrolls registered no growth while unemployment stayed at 9.1%

My speculation on Friday night was that US major indices would fall and by the closing she would turn positive? The US indices did not turn positive. My speculation was that soft or weak data would pressure the Feds and they would come to the rescue with an extension of monetary stimulus.

Since it closed lower

·         Is there a change in focus

·         Are investors not hoping for additional stimulus

·         Would stimulus or QE3 have no effect on the economy this time or

·        As US has a long weekend going into Labor Day, investors wouldn’t hold long positions.

Global markets weaken since, followed by Asia Pacific and probably Europe which focuses on extended sovereign debt issues.

There is a mix in Intermarket analysis

·         US dollar strengthen – safe haven, commodities currencies weaken

·         Gold is near/testing  the US$ 1,900 – safe haven

·         Crude Oil is lower but Tropical storm Lee might interfere with supply – latest news, Lee past by with no heavy impact.

·         Agricultural commodities are higher because of weather/supply issues

·         Volatility - VIX is still hovering around 33-34

·         BDI is the only leading indicator that provides better data in the 4-6 weeks

The above is the current financial climate. While coming back to the post, while major benchmark indices from US to Asia Pac via Europe are suffering from the cold with loss ranging from 1.5 to 4%, the Indonesia stock index JKSE is catching up with the market and posting a 1.5% gain.

Again my speculation came through. I’ve delivered. Now, I’ll leave you to decide to hold or take profit. Good luck!