The market for the past couple of weeks have been up down up down. A flat top have set in most indices except STI, HSI.(A flat top produce market drop). In the previous post i mention about CRB index sky rocket. It is push by the sugar,coffee,orange juice,wheat,corn, soy bean,crude,gold,copper up and etc except oil and the meat. This week we see oil starting to rally. The USD is also kept down by the FED. A cheaper dollar will also make commodities and stock price to rally.
So what's up??
The market is always been prop up when the dollar is crush. The dollar has lost 10% of it value since June 2010.Imagine you have 10 USD in June and it actually worth 9 USD in Oct.The FED are the ones that control the dollar and they have a POMO programme. POMO = permanent open market operation. The operation come into the market every other day. The purpose of it is to make sure the market do not come down (prop up the market). Another factor is prop up he market is to keep the USD low. Obama has wanted to increase the export of the nation by 2 X. To achieve that, one of the ways is to keep the USD low.
However, a currency that keep inflate is not good for the economy for the long run either. So we shall see the development of the market as it unfold.
From Technical point of view, the market is really under some pressure to come down.But nothing is ever 100%.
