market outlook and trading strategy

I attended two investment talks over the weekend. What are the expert's view on the market outlook? Compared to the investment talk that i attended last week, the experts i met this week are rather bullish.

One of them presented on the macro economic aspect, the top down approach, while another are strictly on technical. Let's see on the macro economic side of the story here

year 2009 is a recession, year 2010 is recovery year. This can be seen from the GDP growth. For US: 2008: 0.4%, 2009: -2.6% and 2010f: 1.7%. Europe is in a deeper recession: 2008:0.7%, 2009:-4.8%,2010f:0.1%. For US, there are three important barometer on this, which is the consumer confidence index, purchasing manager index & home sales index. All these register a growth last year. On the other hand, job loss is improving but stay at 26 year high of 9.3%. With very low interest rate of 0.25%, this will translate into a very vibrant stock market. Indeed, the steps taken by Obama few days back is deemed to force the hot money back to US market, and is thought to have direct link to the heavy correction on regional market.

The expert has also pointed out that Asia emerging markets are still strong. In term of savings rate, both China & Singapore has excess of 50%, Malaysia 40.2% compared to US which only have 12.6%. GDP of these market are also good, for example: China: 2009: 8.7% and 2010f: 9.4%. In addition, china has interest is at 5.31% (the government is trying to cool down the loan growth which is high and might still increase rate). The People bank of China has also recently increase the capital ratio for banks to 16% from 15.5%. In short the country has taken step to prevent a bubble proactively and overall Asia market should be positive over long term. As such , the expert is bullish with the market.

Despite the fundamental, the expert also pointed out that bull market normally last 24 months, which mean we have another 14 months of bull market to aim at. Mean time it is 15 months for bear market, which we should have past.

Index (with respect to US)

Consumer Consumer Index
is issued monthly by The Conference Board, an independent economic research organization, and is based on 5,000 households. Such measurement is indicative of consumption component level of the gross domestic product. The Federal Reserve looks at the CCI when determining interest rate changes, and it also affects stock market prices.

Purchasing managers index
PMI measures how well the manufacturing sector is doing. PMI’s index is based on five major indicators: new orders, inventory levels, production, supplier deliveries, and employment.

MANUFACTURING AT A GLANCE DECEMBER 2009
Index	Series Index December	Series Index November	Percentage Point Change	Direction	Rate of Change	Trend* (Months)
PMI	55.9	53.6	+2.3	Growing	Faster	5