Dow : up 179.82 points, or 1.5%, to 12,397.38. It was the Dow’s highest close since July 26.
The US Commerce Department reported construction spending climbed 1.2% in November, the third increase in four months.
The U.S. economic indicators followed positive reports from overseas, with unemployment falling to a two-decade low last year in Germany and indexes for China’s services and manufacturing industries rising in December.
Based on the latest Dow Jones Chart, DJ’s 50-day moving average has moved above the 200-day moving average to form a Golden Cross. This should lend some support to our STI, which is still far from forming the same chart pattern. However, the likelihood of seeing at least a good small New Year Rally in SGX till end-January appears brighter.
Below is a definition of the Golden Cross - “The Golden Cross represents a major shift from the bears to the bulls. It triggers when the 50-day average breaks above the 200-day average. Conversely, the Death Cross restores bear power when the 50-day falls back beneath the 200-day. The 200-day average becomes major resistance after the 50-day average drops below it, and major support after breaking above it. When price gets trapped between the 50-day and 200-day averages, it can whipsaw repeatedly between their price extremes. This pinball action marks a zone of opportunity for swing trades.” - From:
www.tradingday.com/c/tatuto/movingaveragecrossovers.html
Thank you observer2 for your view. I am less optimistic and will be restrained in putting fresh money into equities until the euro crisis show signs of turning around. Wonder why those European leaders (and the public) are so inept. The professionals who can flee are doing so, as they see a bleak future for their families. This in turn will lead to slower growth (if at all) and precipitate a decline of what was once a mighty group of countries.
Observer2, you may like the latest comment by DBS’ Chief Economist David Carbon:
“Asia will shake off the EU debt crisis just as it shook off the US subprime crisis. The trouble in Europe is going to be resolved one way or the other and sooner rather than later. Weak growth in G3 will persist but the unbearable lightness of uncertainty will be gone. Asia’s persistent growth, though below average, will once again remind investors that G3 matters less than it once did. ‘Risk-on’ and inflows to Asia will return. A surge in growth could even follow, not unlike the V-shaped surge Asia experienced in 2009. Markets will head north and currencies will rise 10% in the course of 2012”
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