Global Market Outlook as at May 3, 2012

On April 23, 2012, I have posted on the outlook of the global equity markets (here). While the equity markets everywhere had declined quite substantially (especially in Europe), the main market barometers were & are still in an uptrend. It was encouraging to note that many of these indices were able to hold above their intermediate uptrend line (denoted as 'SS').

What is even more encouraging is that these indices have rebounded & tested their medium-term downtrend (denoted as 'RR') over the past few days. Two indices have broken above the downtrend lines- DJIA & Hang Seng indices. DJIA had even surpassed its high for this year.

While the Eurozone problem will continue to brew, the US & Asian markets could continue with their prior uptrend in the weeks & months ahead. Of course, the big question is where would that leave us. I believe that we would join the other Asian markets & slowly recover. However, this may be reflected in the FBMKLCI as that index and, by extension, some blue chips, may need to undergo further consolidation. In the meantime, 2nd & 3rd liners would likely dominate the market play for the next few weeks.

 
Chart 1: DAX's daily chart as at May 2, 2012 (Source: Stockcharts)

 
Chart 2: FTSE's daily chart as at May 2, 2012 (Source: Stockcharts)

 
Chart 3: NASDAQ's daily chart as at May 2, 2012 (Source: Stockcharts)


Chart 4: DJIA's daily chart as at May 2, 2012 (Source: Stockcharts)


Chart 5: STI's daily chart as at May 2, 2012 (Source: Stockcharts)


Chart 6: HSI's daily chart as at May 2, 2012 (Source: Stockcharts)