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US Market In Super Drive Mood, What Is Next?
Perspective | 07 January 2013
By: Daniel Loh
Articles (40) Profile

On Friday, the Dow Jones Industrial Average increased yet by another 44 points with the Standard & Poor’s 500 (S&P500) increasing another 7 points with the better than expected non-farm payroll job report.

This capped off a tremendous gain in a week with the Dow adding 500 points. The US market is accelerating at its fastest speed before entering the earnings season, starting with the first Dow index company Alcoa issuing its forecast on Tuesday. This kicks off a month of intense evaluation of the earnings results.

I foresee great opportunities to make money in the US market as many analysts have lowered their forecast across the board last year. This makes it easier for companies to do better than expected. We can expect stocks to be gapping up more than down. If you remembered, the third quarter earnings release in October was a disaster, which brought about the slump before the election.

However, in America, the best earnings quarter is always the last quarter, especially with everyone in a great holiday mood to shop, shop and shop, which bodes well with the stocks.

Some of you may wonder when the debt ceiling showdown between the Democrats and Republicans is going to kick off. I agree that before the deadline in March, uncertainty and volatility will surface in the market again. But my prediction is that it won’t happen this month, when all the analysts and media focus their attention to the fundamental earnings results. However, we need to be careful after the earnings season.

Our market sentiment indicator has shown that all major sectors in US are bullish now. More than 70 percent of the companies are bullish. This shows that US is in bullish acceleration mode.

Our market sentiment indicator is as shown:

Bear in mind that now is not the time to short any stocks as short sellers will likely be crushed. You should only start to be wary when one of the sectors turns bearish. I anticipate that to happen one month later from now, perhaps after the earnings season and one month before the March debt ceiling deadline.

In the meantime, let us focus on how the US companies are doing, because it will determine if the Straits Times Index (STI) will have the strength to power forward. In a few weeks, it will be our time to focus on our Singapore stocks’ earnings results. That is the best time to screen out the good apples from the bad, and a good time to review our portfolio of stocks.


FREE Investment Seminar:

TOPIC: <<Statistics about The Market in Quarter 1 Yr 2013 that you MUST understand >> 

You will learn:

- What is the Santa Claus Rally effect?
- What is the January Effect?
- What are the best months to buy stocks and why?
- What are the hedge fund managers strategy for Quarter 1?
- What are the sectors to watch out for in First Quarter?

15 Jan 2013, Tue   7pm – 10pm   (English)
16 Jan 2013, Wed   7pm – 10pm   (Chinese 华文)
Speaker: Daniel LohVenue: 141 Cecil street, Tung Ann Association Building
#07-02 S(069541),
Tanjong Pagar MRT exit G, walk straight 80m, opposite traffic light
To register pls  SMS <Name><Email><HP><Date><Number of seats> to 93676623
DANIEL LOH is an investment coach that specializes in equities and derivatives trading. He regularly appears on TV financial programmes like “Morning Express”, "Good Morning Singapore" and "Hello Singapore". He is interviewed bi-weekly on radio station FM95.8.

Please click here for more information about this author.

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