Tuesday, January 6, 2009

Phillip capital market watch

I have been busy with work lately and might not be able to post as frequently as I used to.

Anyway, recently the market is rising a little too fast though there is not much change in the fundamentals of the market...this implies that the market is very optimistic. Hence any bad news will trigger off a massive sell down, as big and as fast as how it has risen over the last few days. Only when a constant supply of good news is announced, in the form of fundamental changes and not in the form of rescue packages can we be almost certain the crisis is over.

This video talks about the possible movement of oil prices.

Here is a summary
  • It has drop 53% in 1 year last year, from a high of $147
  • Reason is because lower demand
  • Even though the OPEC cut in oil supply has not really affected the oil price, it might be too early to say, as cuts only start from 1st Jan 09. Hence we should wait for the exact figures to find out if there is really a shortage of demand
  • Price drop also because funds are moving out of commodities into safer investments like treasury bills
  • $40 will be a good support and $50 will a resistance. However if resistance is broken, $75-80 is possible in the medium term
  • We will also need to observe what is happen in the middle east, as it will affect oil prices
Here is the video