Lots of charts this week from Ploy, see below!

The question I have been asking myself for a few days is, “where does all the money go?”

The answer: It’s pouring into the Dollar.

The Dollar has been racing like crazy since last week, adding pressure to the world equity market. In my opinion, it may be heading toward 79.50-79.60 resistance, meaning that the Dollar may continue to weigh down the SET until it reaches its resistance. Note that, I saw money pouring into the US 10-year bond and the US 30-year bond, causing the price to rise significantly since last week. I am not quite sure whether it is signaling a speculation of QE3, a negative sentiment over the Euro debt crisis or maybe both. Meanwhile, both the Dow Jones and the DAX, which I use to measure the sentiment in the world equity markets, have fallen below the supports I gave last week. The downside for the Dow Jones may be as low as 11,400, and the DAX at 5,570-5,550 and 5,440.

After we reached the 10^th-15^th November cycle resistance, the SET seemed to become weak and sloppy; it backed down from the 1,000 resistance. The SET50 also made a false breakout, and eventually tumbled. The SET50 is now testing its support at 674-673 and if the support can’t hold, the downside is 651-650.

The SET also tumbled and now looks risky with the Baht/Dollar exchange rate breaching above its down channel. The weakening Baht is hurting the SET.  I’d like to give a stoploss line at 960. If the SET falls below 960, it may head down to 940-945 or lower at 905-900. The resistance for the Baht/Dollar exchange rate is 31.30 baht/dollar. Note from the chart that, when the rate hits the resistance, it usually trigger the ‘low’ in the SET.

Another chart I’d like to update is the Brent and the SET. The Brent oil price has tested the resistance at 116 for a few times and finally backed down. Note from the chart that the downside gap in the Brent oil price is quite large, with the potential that the Brent oil price may head down to 99-97. Note also that when the Brent hits its support, it usually signals the ‘low’ in the SET as well.

So, what are we waiting for?

We are waiting for the Baht/Dollar exchange rate to hit its resistance, and the Brent oil price to hit its support. If both occur, we may expect the ‘low’ in the SET. Meanwhile, if the SET trades below 960, I’d recommend stopping loss in the portfolio, because the SET may head down to 945-940.

Another update on Gold.

Referring to my latest comment on gold, http://www.thaicapitalist.com/2011/11/charts-gold/#more-673, the LME Gold spot couldn’t breach above the barrier at $1,802 and has fallen below its up channel. The support is now at $1,663-1,660. If this support can’t hold, it may head down to $1,640-1,635 and $1,600. Actually, in my medium-long term outlook, I am quite positive on gold, but obviously, it is not a good investment now.  I may turn back to gold again when it can breach above $1,695-1,710.

Thanks again ploy! You can contact her directly @ ploy@thaicapitalist.com