yujin7 (< 20)

Forecast 2/11/2010

February 10, 2010 – Comments (1) | RELATED TICKERS: PCXCQ , PCU , X

Just like to reiterate my  S&P target of at least 1010, next support at 990 and 950s level will be furthest the correction can go. i see alot of people still bullish and buying, and although i am starting to pick up some longs. i still think this correction still has alittle more downside to go, China and S&P500 is not even "there yet" to make it look like a proper correction, given tightening policies that are suppose to take effect. Banks are showing alot of potential to hit the downside and i see alot of triangles forming the end of the line, so most probably it's gonna breakdown anytime soon. I am guessing they will be heavily affected from the European banks.

I don't expect Bernanke to pull the rug from below and cause us to topple, but i think he will "tug" it alittle, and take some support out bit by bit. I think trouble in Europe will start escalating as well, especially Ireland looks like its in a very precarious position, i am guessing the EU will save Greece at the eleventh hour. Euro dollar patterns also forming with potential to drop bigtime.

Commodity prices are expected to come down as well, I am short on coal, and metals such as copper and steel, China has huge inventories equivalent to a year's supply that could take 2-6 months to destock. Copper prices at $1 is simply unsustainable. together with strong tightening polices to clamp down speculation, i'd expect to see a correction for metals, as supply for the short-mid term to sustain China's many building projects is more than enough.

Just for the record, having analyze the Europe and China market, on the longer term i am currently speculating a debt deflation to happen in 2011 or 2012. i think China's bubble is going to burst in 2011-12 (maybe it'd be end of the world) and a commodities bubble in 2012, i know alot of pundits are speculating that China is in a bubble, but i don't think it's "there" yet, probably a mini-bubble, but the Chinese govt has things pretty much in control right now, however these overlending that is happening now needs to take time to brew and it will be awhile before a big bubble forms. i'd also expect refinancing in alot of countries(EU's PIIGS in particular) to be almost impossible, especially the problems that are brewing right now don't get solved (such as spain's 20% unemployment) and if the US still don't reduce its deficit. Keynesian ways of printing money has just got to come to a stop, credit cycles do happen and deflation maybe inevitable. just to summarise this here but i'll share more research on this in a later post.

Good Luck~