Markets to fall after Feb 2012 - Larry Williams

Srujani Panda / 16 Dec 2011

Markets to fall after Feb 2012 - Larry Williams
The recession witnessed in the global economic scenario could hardly have left the Indian and other major Asian markets untouched. The impact promises to continue in the year 2012 too, says Larry Williams.
On a global picture, the only question is will the Eurodollar die of a heart attack or self-suffocation? Certainly, things in Europe are unsettled, and this is not about to change in a hurry, as a cathartic economic process is taking place there.  This process will have an impact on the Indian economy as well. 

But there is more happening than only that. The economies of China, Japan and India have also begun receding. This is best seen in imports to the West Coast. Lawrence Dunnigan, manager of business development with the Port of Oakland, recently said, "All of the imports are very soft this year".

This downtrend can be seen in the JP Morgan Global Manufacturing chart presented here.



My friends in China are now frequently referring to a recession taking place there, which is hardly news to anyone who has looked at the Shanghai stock index. The index has reflected a continual bear market for several years now. While imports from Asia and India to America are low, those to Europe are greatly down. Europe has stopped buying, and given the turmoil taking place, there it is difficult to expect a reversal of this trend. Top all this with my personal knowledge of several cases where Americans are now owed money by ‘slow pay or no pay’ Chinese, and you have to seriously question if the bubble is bursting.My suspicion is that an unsettled global economy will create a flight to the US dollar in the coming year, as investors seek protection from the European debacle and the Asian meltdown.

This potential flight to the US dollar may well be accentuated by the election of a more fiscally conservative president. If it becomes obvious that such a candidate will defeat president Obama, I would expect this to be an additional influence for the US dollar. Of course, the re-election of the president does not mean the dollar cannot rally, but just that it will not be as flashy.

With that in mind, let’s look at what the cycles suggest for the future of the Nifty.



My cyclical work is demonstrating that there should be a year-end rally in stock prices going into the middle of February 2012, and then down.

First, I draw your attention to 2011. The red line below price was the forecast made a year ago, and as you can see, the price pretty much followed this roadmap. I expect 2012 to be no different. We should rally the first half, then down with no meaningful rally until late September or October, as indicated by the turn up in my forecast line at that point.

I believe that the US stock market will also have an impact on Indian stocks. The middle of April 2012 should mark a significant turning point in the US that even those in India should pay attention to.

If you want to stay updated with the share market news today, keep a close watch on the indian stock market today with real time movements like sensex today live and overall stock market today trends. Investors tracking ipo allotment status, ipo news today, or the latest ipo india can also follow daily updates along with bse share price live data. Whether you are learning how to invest in stock market in india, preparing for a market crash today, or searching for the best stocks to buy in india, insights on top gainers today india, top losers today india, trending stocks india and long term stocks india help in making informed investment decisions.