Trouble in Dubai: Another "Lehman Brothers"?

Friday morning (November 27) brought troubling news from Dubai:

 

"Late Wednesday, Dubai World, the city state's largest corporate entity asked creditors for a six-month stay on repayment of its $60 billion in debts." -- The Wall Street Journal.

 

Stocks around the world tumbled on Friday. This begs the question: Could this be this year's "Lehman Brothers" event? As we all know, mainstream financial pundits have almost universally blamed the 2008 Wall Street meltdown on Lehman's bankruptcy. Is Dubai this year's "Lehman"?

 

Regular readers of Elliott Wave International's publications already know the answer to that. Broad trends in financial market are not created by events, but by shifts in social mood, which reverses for endogenous reasons, not exogenous ones. Simply put, no "triggers" are needed for a market to reverse its course.

 

A more thorough explanation appeared in the October issue of The Socionomics Institute's monthly Socionomist:

 

The Persistence of the Exogenous Causality Fallacy

Last month we pointed out that conventional analysts frequently use exogenous events to explain changes in social mood. This tendency was on display again on the one-year anniversary of the Lehman Brothers bankruptcy. Newsweek reported that the bankruptcy 'seemed to be the direct cause of serious problems [in the financial sector].' USA Today printed a chart of the DJIA from September 12, 2008 to the present, with many economic events listed as 'causes' for the market’s gyrations; it also made the case that the Lehman bankruptcy triggered the financial crisis.

 

These reports somehow overlooked the fact the DJIA (and social mood) had been in decline for 11 months before Lehman’s bankruptcy. Did Lehman cause the financial crisis? No, its failure resulted from a trend that had already in place for between one and three years, based on graphs of stock and real estate prices. The bankruptcy was a result of the negative social mood, not the cause.

 

So, will Dubai become this year's "Lehman"? Only if Elliott wave patterns in global stock market charts suggest that market participants will interpret the news from Dubai as something catastrophic.

Source: Elliotwave.com

Is this the beginning of the 2nd Chapter of World Crisis?

Recently, most world Indices has declined in a huge amount. One example is FTSE 100 which declined around 5% just in two days, IHSG has declined around 4% in the last four days trading although the regional indices were increased for some days lately which eventually followed the decline.

One of a bad news that arose in market is the problem of one of the rich country in the world, Dubai. Dubai's big property developer, Dubai World, has caused the big problem, which is the "standstill" action to the bonds which will due by this December 14,2009. Standstill action is the action of postponing the debt due date. Dubai World with its subsidiary, Nakheel & Limitless, has a lot of debt to be paid in this near time. There's a due of US$ 3.5 Billion of Islamic Bond on December 14, 2009 and debt which will due on May 12, 2010 amount US$980 million by Nakheel. Meanwhile, Limitless will have a due on March 30,2010 amount US$1.2 Billion. Totally, Dubai World has a great amount in liabilities which amounted US$59 Billion, which is the biggest portion of Dubai's liabilities which is US$80 Billion. The good news is the government has pointed Deloitte & Touche to restucturized the debts on bonds.

It is shocking that a great country like Dubai can't pay their debt. What's happening actually behind the scene? Is this in purpose or this is the real beginning of the 2nd Chapter of World Crisis? Just wait & see....

Back to stock reviews, my suggestion is to enlarge the proportion amount of your cash & reduce your stocks, it's due to the BIG BEAR has come. And remember, Buy On Weakness is one of the best strategy I ever met. Enlarge your cash, I personally has allocated around 40-50% cash in my portfolio, just in case of great crisis happened again. Get ready to cut loss, if possible cut loss below 5%. Have a great weekend....

Source: Detik Finance

Happy Trading^^
Disclaimer ON!!!

Cash or Stock??

This days as market don't go well, I think its time to save your cash rather than stocks. This is a strategy for you to know the next entry point. This is the time for exitting in a moment. Before you exit, learn the candle pattern first or else you'll regret if you exit too early.

Happy Trading...^^
Disclaimer ON!!!

ENRG & Bakrie in analysis

Several days ago, that I expected ENRG would rise at the next day, but it didn't. Well, I'll explain to you :

1. From the technical view, it might rise after days of declinings.
2. Unfortunately, the firm did announce the Right Issue of ENRG.
3. Market is instable

As it's stated in Disclaimer that any faulty or inaccuracy isn't my fault, then it's all you risk if you lose on it. Even I did cut loss at yesterday due to this sudden information. Yet, it's not my favourite actually but it's a speculative one.

Bakrie went down today with average of around 10% totally esp. DEWA which informed the RI & BNBR informed will issue convertible bonds that will affect its subsidiary. Lately, Bakrie's issued a lot of bonds & Right Issued. What's happening to them actually.

UNSP itself yesterday was analyzed by YU (One of IDX Member) that UNSP will drop down to 660 & it might be realized soon due to today it slided down fast to 730 from 790.

Is this the beginning of 2nd crisis this year? We have no idea, what we can do is wait & see.

Happy Trading....^^
Disclaimer ON!!!

PTBA in analysis

As today it opened higher than closed yesterday, PTBA has slided down today. This might caught some retailers, but not me, as I sold them in profits, eventhough I still got 1 left. Let's start the analysis.

As days ago it rallied fast and showing a great uptrend after a downtrend which was reversed by a bullish engulfing pattern which ended quite high & finally closed it's bullish at 10% higher at the reversal.

Unfortunately for those who didn't take profit today, will suffer further loss, as the graph showed the new reversal bearish, which is Bearish Engulfing Pattern & this might skid PTBA more, as the BEAR is very big & bigger than the bull. This is the time to wait & see the reversal of PTBA, once it gives reversal pattern then its the entry time. Today is a great exit time & let's wait for the next entry time.

Happy Trading...^^
Disclaimer ON!!!!