The Mother Of All Head And Shoulders

Source : Business Insider 

Attached two charts which seems to suggest that an imminent crash may occur in the stock markets. 

For technical analysis to have any use, it can't just be based on moving averages which any old computer could identify, but rather it requires human observation.And to that end, he sent us this chart, which shows that not only is the market currently in a mini "head and shoulders" pattern, this head and shoulders pattern is in itself the second shoulder in a larger pattern, which apparently means the market is doubly doomed! Or not!

Property : SG Private property prices and rentals at standstill

Source : Business Times

Q4 data hints that market may have peaked; secondary-market volumes are slowing down

(Singapore)
PRICE rises for private homes almost ground to a halt last quarter while rental increases also tapered off. The latest official data has sparked a discussion in property circles on whether the market has peaked.
Most observers say that either the peak has already been touched, or will be touched very soon.
The Urban Redevelopment Authority's benchmark private home price index inched up just 0.2 per cent quarter on quarter (q-o-q) in Q4 last year, its ninth consecutive quarter of moderation. For the full year, the index's 5.9 per cent rise was a third of the 17.6 per cent gain registered in 2010. The figures were identical to flash estimates released on Jan 3.
And for the first time since Q3 2009, the increase in URA's landed property sub-index was lower than that for the non-landed property sub-index. The landed sub-index rose just 0.1 per cent q-o-q in Q4 2011, compared with 0.3 per cent for the non-landed sub-index. In fact, for semi-detached houses, the price index actually fell 0.6 per cent q-o-q in Q4.
'In that quarter, prices of semi-detached houses in the east fell 1.6 per cent while those in the north-east softened by 1.3 per cent. This shows that some segments of the landed market are facing stronger price resistance,' says Credo Real Estate executive director Ong Teck Hui. 'However, landed prices have risen 80 per cent from the market trough in Q2 2009, outperforming the 48 per cent increase for non-landed for the same period.'
URA's overall rental index for private homes rose 0.4 per cent q-o-q in Q4, or half the 0.8 per cent rise it had posted in Q3. Full year 2011, the index was up 3.8 per cent - a fraction of the 17.9 per cent gain it had put on in 2010.
The outlook for private home prices looks bleak. CBRE predicts a price drop of 5-15 per cent this year, with luxury/prime properties taking the bigger hit and mass-market homes being the least affected.
Credo's Mr Ong says: 'It's difficult for prices to regain momentum as the recently imposed ABSD (additional buyer's stamp duty) and the economic slowdown could ease demand. Sustained supply and competition among sellers will also keep a lid on prices.'
Giving a different take, Savills Singapore research head Alan Cheong said: 'We still believe it's difficult to conclude if we've reached an inflexion point, if any at all.'
Mr Cheong cites the oligopolistic nature of the Singapore residential property market, with large developers with deep pockets who're likely to resist any price cut. 'A cocktail of low interest rates till at least late-2014 (as pledged by the US Federal Reserve) and higher inflation will in due course reignite another round of interest in the residential market as it's deemed a good hedge against inflation,' he said.
Credo's Mr Ong paints two scenarios. 'In the best-case scenario, if the economic slowdown is milder than expected, then buying sentiment may remain positive, translating to sustained buying activity which will help to keep prices stable amid the build-up in supply. In the worst-case scenario, if there's a recession, we can expect demand to slacken, creating downward pressure on prices.'
Lamenting the difficulty in making accurate predictions, Knight Frank chairman Tan Tiong Cheng said: 'Each time after the government has announced cooling measures in the past two years, I thought the measures would be sufficient to cool the market. But things have turned out to be otherwise.'
He admits that the ABSD will have some effect in curbing investment and foreign demand for private homes. 'Prices will come down - but to what degree before they go up again? What's the alternative for people with savings? Where should they put their money? If you believe in the longer term, property is as good a bet as any. After all, interest rates are expected to stay low for the next couple of years.'
Price declines could be exacerbated by the secondary market, where volumes have slowed down more sharply than in the primary market (that is, developer sales). The number of units (excluding executive condos, or ECs) sold by developers fell 2.4 per cent from 16,292 units in 2010 to 15,904 units in 2011. However, the number of homes sold in the secondary market (resales and subsales combined) slipped 27.6 per cent, from 22,608 in 2010 to 16,357 in 2011.
Developers are wooing buyers with nice showflats and appealing ad pitches. The ease of stretching out progress payments over a few years - compared with having to pay the full price upfront when buying a completed home in the secondary market - is another reason to buy a home directly from a developer.
DTZ's Asia Pacific research head Chua Chor Hoon said: 'When secondary volumes come down, eventually it will affect prices. If demand slows down and sellers find it hard to sell after a few months hanging on to their prices, some owners will start to reduce prices. There will be more bargaining power for buyers as well as occupiers as rents start to ease.'
URA stats also show that developers completed 12,469 private homes (excluding ECs), up 19.9 per cent from the 10,399 in 2010. This has begun to weigh on residential rents, which are rising at a slower rate.
Savills Singapore expects a 'mild correction' of 5 per cent in rentals this year as more new apartments come on stream in the months ahead. It also expects the number of private residential leasing deals (excluding ECs) to hover around 45,000 in 2012, after hitting an all-time high of 45,062 leases last year. The figure for 2010 was 41,573.
'The strong 2011 showing may be attributed to Singapore becoming the preferred location among MNCs for their regional HQs. This has also attracted more senior and top executives to relocate here,' said Savills' residential leasing head Patrick Lai.
DTZ's Ms Chua said rental pressure is greater in Core Central Region but this is likely to shift to Outside Central Region in three to four years due to expected completion of projects in suburban areas arising from the ramp-up in Government Land Sales since the second half of 2010.

Apple Is Now Twice As Valuable As Google

Source : Business Insider 

With Apple's stock surging, and Google's fading, Apple is now twice as valuable as Google, when measured by market cap.

In February 2009, Google was bigger than Apple, but since then, the two companies have diverged. No wonder Larry Page bought Motorola. He's drooling over Apple's business.

Natural Gas : Price Lowest in Ten Years Due to Winter Effects

Source : Business Insider 

Natural gas prices have fallen to their lowest levels in 10 years.  Traders who have been long natural gas have been feeling the heat.

But it has in fact been warmer than usual for all of us.  This is bad news for the natural gas companies who would hope we'd crank up our natural gas heaters each winter.

Last week, Citi's Robert Morris slashed his 2012 natural gas price target to $3.25/MMBtu from $3.85/MMBtu.

Among other things, he notes that we're experiencing one of the warmest winters in a decade.  Here's some of what he had to say:

Temperatures winter-to-date (November 1st through January 5th) have now been ~10% warmer-than-normal (i.e., ten-year average), with November, December and the first week of January accounting for ~41% of a normal winter’s total customer-weighted gas-home heating degree days (HDDs). Consequently, last week ended with a 356 Bcf year-over-year storage surplus. We estimate that if temperatures for the remainder of this winter just match the ten-year average, then the full winter would end up ~4% warmer than-normal. However, most forecasts are calling for continued mild temperatures through February. Meanwhile, last winter was ~6% colder-than-normal. The unusually warm progression of this winter has resulted in ~3.2 Bcf/d lower demand in the residential and commercial sectors through the end of December versus a normal winter...

That brings us to Chart 2 in his report.  It captures winter temperatures as measured in heating degree days (HDDs).  The baseline represents the 10-year average.  As you can see from the 2011-2012 winter-to-date, it has been 9.6% warmer than usual.

Gold : Global Supply / Demand of Gold

Source : Business Insider 

Morgan Stanley has made it no secret that they're bearish on stocks and the economy. However, in this backdrop, they've also made it very clear that they favor gold.
But what is it about gold? Where does it come from? Where does it go? You certainly can't eat it.

Below is a chart from Morgan Stanley's Global Metals Playbook. And it answers all questions.

Morgan Stanley

Even after it recently fell below its critical 200-day moving average, Morgan's not concerned.  Here's their take;

Gold prices have fallen sharply since reaching a new all-time intraday high of US$1,925/oz on September 6, 2011, and a closing high of US$1,889.7/oz on 22 August. The retreat to US$1,541/oz on December 29 represented a 18.5% decline from the record peak on a closing basis. In the process, the spot price trend broke the 200-day moving average in mid-December, raising fears that the ten-year bull market in gold was coming to an end.

We have a different view. Such corrective price movements, while less aggressive than that in 2H 2011, have been evident throughout the 2001-2011 bull market, especially since the acceleration in the uptrend from 2009. Moreover, the timing of the sell-off, especially to the sell-off low in late December, suggests strong selling pressure linked to year-end book squaring, portfolio adjustments and commodity index reweighting. Furthermore, the sell-off also coincided with an especially sharp rally in the TWI of the USD, a strong headwind for gold given its USD pricing and quasi-currency function.

US Trade Gap Comes In WIDER Than Expected, Spiking 10% To -$47.8 Billion

Source : Business Insider 

The trade gap came in wider than expected at $47.8 billion.
This is a big jump from the $43.3 billion gap from October.
Analysts had expected a $45 billion gap.

Also from the report, some commentary about trade with some of our major partners.

• The goods deficit with Canada increased from $2.2 billion in October to $3.0 billion in November. Exports decreased $1.3 billion (primarily automobiles, parts, and accessories and other household goods) to $23.3 billion, while imports decreased $0.5 billion (primarily nonmonetary gold, civilian aircraft, and other precious metals) to $26.3 billion.

• The goods deficit with China decreased from $28.1 billion in October to $26.9 billion in November. Exports increased $0.2 billion (primarily civilian aircraft, engines, equipment, and parts; corn; and passenger cars) to $9.9 billion, while imports decreased $1.0 billion (primarily household goods and apparel) to $36.8 billion.
• The goods deficit with European Union increased from $8.0 billion in October to $9.7 billion in November. Exports decreased $1.4 billion (primarily fuel oil, drilling and oilfield equipment, and nonmonetary gold) to $22.0 billion, while imports increased $0.4 billion (primarily petroleum products, passenger cars, and household goods) to $31.7 billion.

Performance of every Asset Class in 2011

The last of the major global financial markets will close for the year in just a few hours.  The S&P 500 started the year at 1,257, and it's trading right around that level now.

So does this mean nothing happened in the financial markets this year?

Of course, not.  Perhaps the most surprising asset class of 2011 was US Treasuries.  Between QE2 ending and the US credit rating getting downgraded, most bond experts thought Treasuries would collapse.  But the exact opposite happened.

From Reuters chart guru Scott Barber, here's a quick look at how the world's major financial asset classes performed this year: