If we all could submit a paragraph about what we think would happen in 2011 with the markets, where we see them headed and so on we could put this on a website and see who is the closest when next year this time comes along... who likes this idea? Maybe part of the game is to give an estimated value for DJIA, ALSH...
Index volatility will be wild.Due to all of that Quantitative Easing 2.0 and 3.0 and 4.0,etc.Huge Jumps will develop vs Huge downs.It will be a highly fluid situation as Central Bankers COLLECTIVELY print to devalue for trade-export purposes.And remember, you're in Rand-Land...the wildest of them all....Ridem Cowboy !2011.
Dudes...just watch the Zim Industrial Index when Robber Mugabe went wacko! and printed ...It was an exponential chart.The real economy died and Stocks went True North.So yeah...Logic has nothing to do with any of it.It's just money supply PUMP! and WHERE will it go.That's all.I suppose their Bond Mkt wasn't too functional(heh)..don't have a chart on that.
A reasonably strong rand (6:50 - 7 - $1); Rising food commodity prices, slight easing of Mineral commodity prices, Corporate earnings across the board under pressure causing those itchy emotional "investors" to over sell & over buy stocks - so be awake for bargains; Increasing ground level unrest & discontentment post local election promises & again lack of delivery; A major shift in Alliance powerblocks - either Cosatu/SACP exets its true power or Vavi is absorbed by the ANC elite and redeployed to Limpopo/ North West / Eastern Cape. So as more things change, more will remain constant. Personal Tragedies will continue to gain attention of the newspapaers in the absence of true news while we all wait for teh market to give us some direction - so let the words of SPB echo in yr ears this next year - TRADE THE PRICE, ALL THE REST IS STATIC.... Now I am off to wander through our empty shopping malls getting my annual Boney M fix :)
OK - Here is a contribution (for what its worth)... The real Case-Shiller national index is approaching a bottom. This indicator is a measure of the real condition of the US banking system asset base. US Bank failures will continue until this indicator shows an upward trend for about a year or two. A reputed forward indicator for global trade was the Baltic Dry Index and Dry Ships (DRYS) which have never recovered since the bottom of the collapse over 2 years ago. However, the RSI on DRYS has been positive over the last 6 months and a +20% price gain occurred in November. The Euro pessimism is diverting attention from the biggest elephant, which is the US debt and upcoming bond crisis. Attention must inevitably revert to this. When the China-Russia-Euro connection becomes mainstream the attention will turn and the dollar will revert to relative weakening. Bail-outs are European equivalent of QE. Massive QE will debase. Commodity based economies will see strong currencies relative to QE affected currencies. Sustained low interest rates in major economies will cause commodity and property prices to trend higher which will alleviate deflation fears. Interest rates will probably need to commence eventually serious upward adjustments during 2011 to address this prospective spectre of QE and recovery driven inflation. Smoke and mirrors will continue be the daily media and politico fodder. Objective overview will remain elusive and largely irrelevant to short-term market action. Global warming effects will remain bullish and early signs of the next ice age will appear. The CIA will place South Africa in the corrupt State category.