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Monday, December 22, 2008 

The global economic slowdown

The New Year is coming up fast and no hopes for a better economical environment are in perspective. During 2008 we saw a sharp deterioration of conditions in financial markets initiated by the sub-prime crisis. In a global economy, and building on the complex connections between different markets, the absence of a solid financial system will bring inevitable setbacks in the growth of the real economy. The complete rupture of the channels for granting credit on a global scale will have unpredictable consequences on global economic growth. The recovery of the economies after a crisis in the banking system is generally slower as a result of the transmission mechanisms of monetary policy does not work as expected. Thus, I believe the growth of economies will only appear and accelerate just in 2010, supported by an improvement in the conditions of access to credit and, secondly, the relief in prices of food and energy goods, which should provide for an acceleration consumption. At this moment the economy environment we're in is extremely tough, and unfortunately, I can't see the bottom nor to predict a good beginning of the year for financial markets.

Chart courtesy of www.stockcharts.com ( click to enlarge )

CTX - The short-term trend is up. The immediate target is 13-13.21, which was achieved on the past week. The price has reversed from here. The stock should be bought only on a close above $13, as it faces strong resistance at that level. The uptrend continuation scenario remains more likely at the moment, however a stop-loss at is necessary at $10.13.

Chart courtesy of www.stockcharts.com ( click to enlarge )

Downward bias in JDSU. The stock failed to close above the resistance level of $4.10 last week. This resulted in a sharp drop on today session. The recent price patterns suggest that the downward move started on Monday could continue. A decline to the 3-3.10 range appears likely. Shareholders who prefer higher risks may hold with a stop-loss at $3.18. Fresh buying may be only considered on a close above $4.12.

Disclaimer : Trading stocks involves risk, this information should not be viewed as trading recommendations.The charts provided here are not meant for investment purposes and only serve as technical examples.

That's all Folks. See you tomorrow !!

AC

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  • I'm a 43 year old Independent Trader using proprietary technical analysis with more than 18 years experience of investing in the US stock markets. I started this blog in 2006 simply as a way to share my thoughts about capital, risk management, and trading. My blog contains only my personal opinion and is provided for informational purposes only.

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