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Hi shweli,

Yes, by the "Rules of Recognition", but it does not necessarily means it will turn down, just a warning of caution, as by the rules, "confirmation is definitely required" , which means it must be followed by a lower high n lower low candle to validate the reversal.

Rules of Recognition:

1. The small real body is at the upper end of the trading range.

2. The color of the body is not important.

3. The long lower shadow should be much longer than the length of the real body, usually 2 to 3 times. (fulfils this criteria as it is at 1.8, close to 2 times)

4. There should be no upper shadow, or if there is, it should be very small.

Hope my explanation helps.

shweli ( Date: 19-Jul-2009 09:01) Posted:

Hi richtan,

I m a newbie. STI on 17 july 09, is it Hanging Man?

lawcheemeng ( Date: 18-Jul-2009 20:59) Posted:

ok got it. thks both of u

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U r right, in another words, "Dun follow the herd instinct"

petertan4949 ( Date: 19-Jul-2009 12:36) Posted:

If the current rally continue, it is just a matter of time, before s chip play catch up with the mid cap and penny.

buy only solid s-chip. buy when people not interested.and sell when they turn greedy

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Read today's Sunday Times article pg 21 (World section) by Mark Mobius:

China "to overtake Wall St in 3 years"

dealer0168 ( Date: 19-Jul-2009 12:08) Posted:

But 30yrs is too long lah. US market is too fragile. N it just a matter of time China take over. When? Let don't guess...... just see fr ourselves...... Smiley

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U.S. Stocks Post Biggest Gain Since March, End Four-Week Slump

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By Lynn Thomasson

July 18 (Bloomberg) -- U.S. stocks rose, propelling the Standard & Poor’s 500 Index to the biggest weekly advance since March, after Goldman Sachs Group Inc. and Intel Corp. beat analysts’ estimates and reports on manufacturing and retail sales signaled the economy is improving.

Goldman Sachs surged 11 percent to the highest price since September after reporting record profit of $3.44 billion. Also, analyst Meredith Whitney gave the bank the only “buy” rating among eight companies she covers. Intel, the world’s biggest chipmaker, added 17 percent and completed a seven-day rally as it reported twice as much profit as analysts forecast.

The S&P 500 rose 7 percent to 940.38 for the second- steepest weekly gain of 2009. The Dow Jones Industrial Average jumped 597.42 points, or 7.3 percent, to 8,743.94. The Russell 2000 Index of small companies soared 8 percent to 519.22.

“We’re bullish,” said Scott Wren, senior equity strategist at Wells Fargo Advisors in St. Louis. “Between now and the end of 2010, we’re looking for the market to be up at least 25 percent.”

The S&P 500 has added 61.25 points since July 10, almost erasing the 67.08-point retreat from the prior four weeks, as Goldman Sachs, Intel and Johnson & Johnson helped allay concern that equities had risen faster than the outlook for corporate profits. S&P 500 companies that reported second-quarter results since July 8 topped estimates by 16 percent, according to data compiled by Bloomberg. Thirty out of 38 beat projections.

‘Relatively Sanguine’

The Chicago Board Options Exchange Volatility Index, used as a gauge of investors’ concern, tumbled 16 percent to 24.34 for the steepest weekly decline since December. All of the S&P 500’s 10 industries rose this week, with technology companies having the biggest gain.

“The picture looks pretty good,” Jack Ablin, who oversees $60 billion as chief investment officer at Harris Private Bank in Chicago, said in a Bloomberg Television interview. “Outlooks are relatively sanguine.”

Goldman Sachs jumped 11 percent to $156.84. Whitney, who correctly predicted in 2007 that Citigroup Inc. would cut its dividend, said Goldman Sachs will probably advance to $186.

Financial stocks soared even as CIT Group Inc., the 101- year-old lender facing bankruptcy, plunged 54 percent to 70 cents after failing to receive federal guarantees for its bonds. Red Hat Inc., the biggest seller of Linux operating systems, was picked to replace CIT, which finances about 1 million businesses, in the S&P 500 after the close of trading July 24.

‘For Real’

Intel increased 17 percent to $18.79. The company also predicted third-quarter revenue above analysts’ estimates, indicating that shoppers in Asia are helping reignite demand for personal computers.

“Earnings have definitely driven the market,” said Russell Rolnick, who helps oversee about $1.2 billion at Lenox Advisors Inc. in New York. “What’s going to show that these numbers are for real is if we see unemployment start to slow down.”

The number of Americans filing claims for unemployment benefits fell last week to the lowest level since January, while retail sales rose more than economists estimated. Government reports also showed that industrial production shrank less than forecast and a New York regional factory gauge had the smallest contraction in more than a year, a sign that manufacturing is on the verge of stabilizing.

GE Drops

General Electric Co. dropped 6.1 percent yesterday, the most in three months, to $11.65 after second-quarter sales trailed projections. The maker of jet engines and medical imaging machines gained 8.1 percent for the week as the better- than-estimated economic reports lifted industrial companies.

Almost 150 companies in the S&P 500 are scheduled to report results next week, including Apple Inc., Coca-Cola Co., McDonald’s Corp., Microsoft Corp. and Morgan Stanley. Analysts estimate profits fell 33 percent in the second quarter and will drop 20 percent in the current period.

The Conference Board’s index of U.S. leading indicators probably rose in June for a third consecutive month, another sign the economy may be emerging from the worst recession in five decades, economists said before a July 20 report.

To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net. Last Updated: July 18, 2009 08:00 EDT

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U.S. Stocks Post Biggest Gain Since March, End Four-Week Slump

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By Lynn Thomasson

July 18 (Bloomberg) -- U.S. stocks rose, propelling the Standard & Poor’s 500 Index to the biggest weekly advance since March, after Goldman Sachs Group Inc. and Intel Corp. beat analysts’ estimates and reports on manufacturing and retail sales signaled the economy is improving.

Goldman Sachs surged 11 percent to the highest price since September after reporting record profit of $3.44 billion. Also, analyst Meredith Whitney gave the bank the only “buy” rating among eight companies she covers. Intel, the world’s biggest chipmaker, added 17 percent and completed a seven-day rally as it reported twice as much profit as analysts forecast.

The S&P 500 rose 7 percent to 940.38 for the second- steepest weekly gain of 2009. The Dow Jones Industrial Average jumped 597.42 points, or 7.3 percent, to 8,743.94. The Russell 2000 Index of small companies soared 8 percent to 519.22.

“We’re bullish,” said Scott Wren, senior equity strategist at Wells Fargo Advisors in St. Louis. “Between now and the end of 2010, we’re looking for the market to be up at least 25 percent.”

The S&P 500 has added 61.25 points since July 10, almost erasing the 67.08-point retreat from the prior four weeks, as Goldman Sachs, Intel and Johnson & Johnson helped allay concern that equities had risen faster than the outlook for corporate profits. S&P 500 companies that reported second-quarter results since July 8 topped estimates by 16 percent, according to data compiled by Bloomberg. Thirty out of 38 beat projections.

‘Relatively Sanguine’

The Chicago Board Options Exchange Volatility Index, used as a gauge of investors’ concern, tumbled 16 percent to 24.34 for the steepest weekly decline since December. All of the S&P 500’s 10 industries rose this week, with technology companies having the biggest gain.

“The picture looks pretty good,” Jack Ablin, who oversees $60 billion as chief investment officer at Harris Private Bank in Chicago, said in a Bloomberg Television interview. “Outlooks are relatively sanguine.”

Goldman Sachs jumped 11 percent to $156.84. Whitney, who correctly predicted in 2007 that Citigroup Inc. would cut its dividend, said Goldman Sachs will probably advance to $186.

Financial stocks soared even as CIT Group Inc., the 101- year-old lender facing bankruptcy, plunged 54 percent to 70 cents after failing to receive federal guarantees for its bonds. Red Hat Inc., the biggest seller of Linux operating systems, was picked to replace CIT, which finances about 1 million businesses, in the S&P 500 after the close of trading July 24.

‘For Real’

Intel increased 17 percent to $18.79. The company also predicted third-quarter revenue above analysts’ estimates, indicating that shoppers in Asia are helping reignite demand for personal computers.

“Earnings have definitely driven the market,” said Russell Rolnick, who helps oversee about $1.2 billion at Lenox Advisors Inc. in New York. “What’s going to show that these numbers are for real is if we see unemployment start to slow down.”

The number of Americans filing claims for unemployment benefits fell last week to the lowest level since January, while retail sales rose more than economists estimated. Government reports also showed that industrial production shrank less than forecast and a New York regional factory gauge had the smallest contraction in more than a year, a sign that manufacturing is on the verge of stabilizing.

GE Drops

General Electric Co. dropped 6.1 percent yesterday, the most in three months, to $11.65 after second-quarter sales trailed projections. The maker of jet engines and medical imaging machines gained 8.1 percent for the week as the better- than-estimated economic reports lifted industrial companies.

Almost 150 companies in the S&P 500 are scheduled to report results next week, including Apple Inc., Coca-Cola Co., McDonald’s Corp., Microsoft Corp. and Morgan Stanley. Analysts estimate profits fell 33 percent in the second quarter and will drop 20 percent in the current period.

The Conference Board’s index of U.S. leading indicators probably rose in June for a third consecutive month, another sign the economy may be emerging from the worst recession in five decades, economists said before a July 20 report.

To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net. Last Updated: July 18, 2009 08:00 EDT

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Home Resales, Leading Index Probably Rose: U.S. Economy Preview

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By Shobhana Chandra

July 19 (Bloomberg) -- Home resales in the U.S. probably rose in June and a gauge of the economic outlook improved, signaling the recession may soon be over, economists said before reports this week.

Purchases of previously owned homes climbed to an annual rate of 4.83 million, the highest level since October, according to the median of 57 estimates in a Bloomberg survey before the National Association of Realtors’ report on July 23. Figures tomorrow may show the index of leading indicators climbed for a third consecutive month.

Mounting evidence that housing is stabilizing is bolstering forecasts that government stimulus efforts will gain traction in coming months and lift the economy from the worst slump in five decades. Other reports may show rising joblessness is weighing on Americans’ moods, tempering optimism about any rebound.

“The end of the recession could be pretty close,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “We’re getting near the bottom in housing. It’ll still be a very gradual recovery for the economy, with a labor market that’s very weak.”

Reports last week corroborated that the housing slump, now in its fourth year, is dissipating. Housing starts unexpectedly jumped in June to the highest level since November as construction of single-family dwellings climbed by the most since 2004. Building permits, indicating future construction, rose the most in a year.

Signs of Stability

The National Association of Home Builders/Wells Fargo index of builder confidence increased this month to the highest level since September.

One reason for the projected increase in home resales is that prospective buyers are taking advantage of the plunge in prices caused by the foreclosure crisis. Filings reached a record in the first half of 2009, according to RealtyTrac Inc., an Irvine, California-based seller of default data. More than 1.5 million properties got a default or auction notice or were seized by banks in the six months through June.

The New York-based Conference Board’s leading index, which points to the direction of the economy over the next three to six months, rose 0.5 percent last month after a 1.2 percent increase in May, according to the survey median.

The jump in building permits was probably one of the biggest contributors to the predicted gain in the leading index, economists said. Fewer jobless claims and higher stock prices were also likely drivers.

Stocks Rise

Stocks have gained on optimism an economic recovery is at hand. The Standard & Poor’s 500 Index is up 39 percent since reaching a 12-year low on March 9.

A July 24 report may show the Reuters/University of Michigan final index of consumer sentiment fell in July after four consecutive gains, economists predicted. A preliminary reading dropped to the lowest level since March.

The U.S. has lost about 6.5 million jobs since the recession began in December 2007. Economists in a separate survey taken by Bloomberg this month predicted the jobless rate will reach 10 percent by year-end from 9.5 percent in June.

Federal Reserve officials thought the economy was “still quite weak and vulnerable to further adverse shocks,” according to minutes of their June meeting released last week. Even so, the report also said “the economic contraction was slowing and that the decline in activity could cease before long.”

Companies seeing an improvement include CSX Corp., the third-largest U.S. railroad. Jacksonville, Florida-based CSX reported second-quarter profit that topped analysts’ forecasts, and said demand for hauling most freight is stabilizing. Railroad traffic is considered an economic bellwether.

“We’re seeing pretty good stabilization in our markets,” Chief Executive Officer Michael Ward said in an interview last week. “We don’t see any further deterioration, and we see some incremental improvement in the near future.”

                         Bloomberg Survey

================================================================
                        Release    Period    Prior     Median
Indicator                 Date               Value    Forecast
================================================================
LEI  MOM%                 7/20      June      1.2%      0.5%
Initial Claims ,000’s     7/23     18-Jul     522       560
Cont. Claims ,000’s       7/23     11-Jul     6273      6390
Exist Homes Mlns          7/23      June      4.77      4.83
Exist Homes MOM%          7/23      June      2.4%      1.3%
U of Mich Conf. Index     7/24     July F     64.6      65.0
================================================================

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net Last Updated: July 19, 2009 00:00 EDT

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Global equity technicals
Wave C has started? - by Nigel Foo

The strong rebound of the US equity market over the past week caught us by surprise and probably negated our S&P500 head & shoulder formation. The S&P500 may have already completed its minor wave "b" consolidation at the end of last week and the wave "c" up leg may have just begun. If so, the index could hit 1,050. The Dollar Index looks technically weak, with the MACD and RSI technical indicators turning negative. We see one more down leg minor wave "v" to complete the minor wave "c". This would synchronise with our view that global equity markets could have just started their minor wave "c" upleg. We believe the performance of South Korea's Kospi could give us an idea where Asian markets are heading in the coming weeks. The index led Asia's rally since Mar and peaked in May, earlier than the other Asian equity markets. Kospi should be the first to start its minor wave "c".

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Market Snapshot

Jul 17, 2009, 4:50 p.m. EST

Bulls are back this week, market internals show

By Nick Godt, MarketWatch

NEW YORK (MarketWatch) -- Stronger volumes during buying spurts than on selling action this week have some believing that, after four weeks of downside, the bulls are back in the market as earnings season starts in earnest.

The market advanced every day this week, giving a 7.3% gain to the Dow Jones Industrial Average, while the S&P 500 Index rose 7% and the Nasdaq Composite Index added 7.4%. The technology-heavy index also rose for its eighth consecutive session of gains.

Some technical analysts especially noted the strong action seen on Wednesday, as stocks rallied in the wake of Intel Corp. /quotes/comstock/15*!intc/quotes/nls/intc (INTC 18.79, +0.29, +1.57%) and its surprisingly good second-quarter earnings. See more on Intel results and stock action.

/quotes/comstock/10w!i:dji/delayed INDU 8,744, +32.12, +0.37%

8,800

8,600

8,400

8,200

8,000

9

14

16

A thus-far modest bounce "gained some of its mojo back with bulls showing they still have some juice -- i.e., buying power -- left," said Kevin Lane, chief market strategist at Fusion Investments.

"What gave us comfort in the advance was not as much the point gain but rather the internal skew," he wrote in a note, noting up volume topping down volume by a ratio of 27.3 to 1 on the New York Stock Exchange as well as market breadth among advancers vs. decliners.

On Wednesday, the Dow jumped 256 points, or 3%. But for Lane, that wasn't the most important aspect of the rally.

"As we always say, it's not the point gain that matters, but rather the sponsorship behind the move and the internals behind yesterday's were certainly akin to going into battle with a fully loaded battalion," he added.

The 1.3 billion shares traded on the NYSE on Wednesday were "a nice increase" -- up 40% from the previous session -- and were a strong improvement from the previous two weeks, according to Banyan Partners, an investment-advising firm.

Options expiration in play

The expiration of stock options on Friday, however, had other strategists take a more critical look at this past week's action. Traders have to cover bets ahead of those expirations and this tends to boost volume action.

"I'll take that and it's better than having lower volumes," said Barry Ritholtz, chief executive and chief market strategist at Fusion IQ. "I'm always careful when trying to interpret what's happening in the market."

On Friday, the market ended little changed for the most part, with the Dow industrials /quotes/comstock/10w!i:dji/delayed (INDU 8,744, +32.12, +0.37%) up 32 points at 8,743, while the S&P 500 /quotes/comstock/21z!i1:in\x (SPX 940.38, -0.36, -0.04%) dipped 0.4 points to 940 and the Nasdaq /quotes/comstock/10y!i:comp (COMP 1,887, +1.58, +0.08%) rose 1.6 points to 1,886.

The market still remains on track for a strong performance this week, ending a four-week losing streak that saw the broad S&P 500 lose 7% after failing to breach the 950 level.

"We were down for four weeks and were due for a bit of respite from the selling," Ritholtz commented.

However, the veteran strategist isn't convinced that earnings -- although many key companies that have reported so far for the June quarter beat expectations -- are convincing enough.

Bellwethers such as IBM Corp. /quotes/comstock/13*!ibm/quotes/nls/ibm (IBM 115.42, +4.78, +4.32%) and General Electric Co. /quotes/comstock/13*!ge/quotes/nls/ge (GE 11.65, -0.75, -6.05%) have topped expectations thanks to cost-cutting measures, not because of improving business conditions, Ritholtz said, noting that revenue actually missed expectations in the case of both companies.

"The market needs evidence of [economic] green shoots in earnings but that's not what we're seeing so far," the strategist added.

As for volumes, although this week showed a marked improvement, they've still remained well below the average recorded this year so far, according to Banyan Partners.

"The sellers haven't been completely removed," wrote Robert Pavlik, chief market strategist at the firm, in a note.

Although the 1.3 billion shares traded on Wednesday were a strong improvement, the level is "still far below the average daily volume on a year to date basis which is about 1.5 billion shares daily," he said. "So if we get some selling, we think that will likely help the market rally next week and it could take the S&P 500 back up to resistance at 950."

Nick Godt is a MarketWatch reporter based in New York.

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Asian Stocks Record Best Week Since May on Recovery Speculation

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By Darren Boey

July 18 (Bloomberg) -- Asian stocks rose this week, giving the MSCI Asia Pacific Index its biggest advance since May, amid renewed confidence the global economy is recovering.

CapitaLand Ltd., Singapore’s biggest developer, climbed 10 percent as Singapore upgraded its economic growth forecasts. Alumina Ltd., partner in the world’s biggest producer of the material used to make aluminum, jumped 15 percent in Sydney as commodity prices climbed. Bank of Communications Co. gained 8.3 percent in Hong Kong as economist Nouriel Roubini said the worst of the financial crisis is over.

“The recovery is gaining traction,” said Nader Naeimi, a strategist at AMP Capital Investors in Sydney, which manages about $95 billion. “Even if we don’t see spectacular growth, a stabilization should be enough to support a market rally.”

The MSCI Asia Pacific Index added 2.7 percent to 103.38 this week. The gauge has rallied 47 percent from a five-year low on March 9 amid optimism stimulus policies around the world will revive the global economy. The MSCI World Index gained 6.7 percent this week, the most since March.

Hong Kong’s Hang Seng Index climbed 6.2 percent, while Japan’s Nikkei 225 Stock Average rose 1.2 percent. Indonesia’s Jakarta Composite Index fell 0.6 percent yesterday, paring its weekly gain to 2.1 percent, after bomb blasts killed at least eight people in the city.

The MSCI Asia Pacific Index has risen this week as government reports showed economic growth accelerated in China and U.S. manufacturing improved. Intel Corp. forecast sales that beat analyst estimates, while International Business Machines Corp. raised its profit forecast.

‘Gaining Momentum’

“Sentiment has been gaining momentum following positive economic and earnings news,” said Michiya Tomita, who helps manage $61 billion at Mitsubishi UFJ Asset Management Co. in Hong Kong. “Most of the good news has been priced in. Investors will be looking for more catalysts in the next few weeks as companies report earnings.”

Stocks on the MSCI Asia Pacific Index are trading at an average 43 times reported earnings, up from the 15 times shares were trading at during the market’s trough in March. Companies on the S&P 500 are currently at 14 times profit.

In Singapore, the Straits Times Index advanced 5.3 percent this week, after the trade ministry said the city’s gross domestic product will shrink between 4 percent and 6 percent this year, less than an earlier forecast for a contraction of as much as 9 percent.

The economy grew an annualized 20.4 percent last quarter from the previous three months, after declining a revised 12.7 percent between January and March, it said.

Singapore Growth

CapitaLand surged 10 percent to S$3.73. City Developments Ltd., Singapore’s second-largest property company, jumped 14 percent to S$9.38. City Developments has started selling an 85- unit development, the Business Times reported yesterday.

“This upward trend will continue for some time, as economic indicators have confirmed the economy is recovering,” said Harvey Chang, a SinoPac Securities Investment Trust Co. fund manager who helps oversee about $1.5 billion. “There’s plenty of money in the market.”

Energy shares, material producers and finance companies were the best performing of the MSCI Asia Pacific Index’s 10 industry groups this week on speculation economic growth will boost commodity prices, real-estate demand and bank lending.

Alumina jumped 15 percent to A$1.52, while Fortescue Metals Group Ltd., Australia’s third-largest iron ore exporter, climbed 15 percent to A$3.92. BHP Billiton Ltd., the world’s largest mining company and Australia’s largest oil producer, added 7.8 percent to A$35.20.

Metals Rally

A gauge of six metals in London rose 9.1 percent, the best week since Feb. 6. Oil futures in New York added 6.1 percent, the biggest weekly advance since May 29.

Among finance companies, Bank of Communications, part owned by HSBC Holdings Plc, rose 8.3 percent to HK$8.83 in Hong Kong. HSBC, Europe’s largest lender, climbed 9.2 percent to HK$68.30.

Sumitomo Realty & Development Co., Japan’s No. 3 developer, rose 5.2 percent to 1,646 yen. Takashi Hashimoto, a Barclays Capital analyst in Tokyo, assigned an “overweight” recommendation to the company in new coverage.

“The freefall of the economy has stopped,” New York University’s Roubini, who predicted the financial crisis, said on July 16. “There is light at the end of the tunnel. And the light at the end of the tunnel for once is not the one of an incoming train.” Roubini reiterated his view that the contraction would last 24 months.

To contact the reporter for this story: Darren Boey in Hong Kong at dboey@bloomberg.net. Last Updated: July 17, 2009 21:24 EDT

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cheemeng,

Sorry for the late reply.

Yes, des_khor had replied correctly, the horizontal line is the 2424.

lawcheemeng ( Date: 18-Jul-2009 10:14) Posted:

Richtan may i know which is the ascending triangle? thks

cyjjerry85 ( Date: 18-Jul-2009 04:36) Posted:

based on the indicators u mentioned and the lines drawn...it seemed today a credible breakout upwards

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Wow!!! Cheong Wee, Smiley Smiley Smiley Smiley Smiley Smiley Smiley Smiley Smiley

Warm welcome back after long hiatus.

I m so sorry, due to time-constraint, from now onwards, I shall not be posting charts unless time permits.

cheongwee ( Date: 17-Jul-2009 19:36) Posted:

Your effort you put in is treasure and appreciated by many , no post is lousy here, it is lousy only because we are lousy.

we fail to understand and thus profit from the posting. Words is at times mistaken.

i understand little about chart and TA ,but you are good. Please do continue with your good work.

and your chart below looking promisimg for China Hong. Thanks

with china growing at 7.9%, i think very soon S-chip will be in play.

it about time to rotate our $ into china stock again.

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Mobius says US out of the woods:

http://www.bloomberg.com/avp/avp.htm?N=av&T=Mobius%20Says%20U.S.%20%60Out%20Of%20The%20Woods%2C'%20Russia%20Undervalued&clipSRC=mms://media2.bloomberg.com/cache/vELujdoyyXT4.asf

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China’s Rebound Carries U.S., Asia Toward Recovery (Update1)

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By Bloomberg News

July 17 (Bloomberg) -- China’s economic comeback is under way, towing along companies from Intel Corp. to Hyundai Motor Co. and starting to make up for weak demand in other major economies.

The world’s third-largest economy grew 7.9 percent in the second quarter from a year earlier after expanding at the slowest pace in almost a decade in the previous three months, the statistics bureau said yesterday. The first acceleration in growth in more than two years came after the government implemented a 4 trillion yuan ($585 billion) stimulus plan and prodded banks to lend more.

China is the only one of the 10 biggest economies that is expanding, highlighting the role the nation may play in easing the worst global recession since the Great Depression. The U.S. economy is still shrinking, five months after Congress agreed to President Barack Obama’s $787 billion stimulus package.

“China cannot save the world by itself, but its recovery is a definite positive,” said Brian Jackson, a strategist at Royal Bank of Canada in Hong Kong. “China has a lot more control over how its banks do business and they were in a lot stronger position than U.S. banks to implement policy stimulus.”

The Chinese economy will expand 8.1 percent this year, according to the median forecast of 16 economists surveyed by Bloomberg News after the government released the second-quarter figure. Growth will accelerate to 9.1 percent in 2010, they estimated. The pickup, driven by tax cuts and government-funded incentives to encourage consumers to buy automobiles and electronics goods, is bolstering demand for imports.

Asian Consumers

Intel says consumers in Asia -- especially China -- are leading a recovery in demand for personal computers. The Santa Clara, California-based company’s sales in the Asia-Pacific region rose 21 percent to $4.41 billion in the past quarter, while sales in the Americas and Europe plunged.

“We are seeing Asia-Pacific stronger than the rest of the world; in particular, consumption in China looks very good,” Stacy Smith, Intel’s chief financial officer, said in an interview with Bloomberg Television on July 14. “Mature markets are lagging a little bit behind.”

Seoul-based Hyundai’s sales in China surged 56 percent from a year earlier to 257,003 units in the first half, making the country its biggest overseas and fastest-growing market. Sales by South Korea’s largest automaker in the U.S., which used to be its biggest market, dropped 11 percent to 204,686 units, according to the company.

Investment Surge

Government-influenced spending is driving more than four- fifths of China’s expansion, according to the World Bank. Urban fixed-asset investment surged 33.6 percent in the first half, the fastest growth in five years. Industrial production increased 10.7 percent in June from a year earlier, the largest gain in nine months.

“China’s recovery is major positive news, especially for commodities exporters,” said Wang Tao, an economist with UBS AG in Beijing. “The strongest factor in China’s recovery is investment demand, which means it will import more commodities and machinery.”

Chinese imports of copper and its products jumped to a record in June, increasing 13 percent from the previous month. Iron ore imports rose 3.4 percent in June to the second-highest level this year, as rising prices prompted steelmakers to produce more and buy more raw materials.

Komatsu’s Upswing

The Chinese government unveiled its stimulus package in November, four months before Obama’s measures were approved. The stimulus has boosted sales for construction equipment-maker Komatsu Ltd., while subsidies to encourage consumer spending have boosted sales for manufacturers such as Tokyo-based Nissan Motor Co., Japan’s third-largest automaker, and plastics-maker Teijin Ltd. in Osaka.

Tokyo-based Komatsu, the world’s second-biggest maker of earthmovers, said last month its sales in China probably beat expectations in the quarter ended June 30. The company expects the market to grow to about 15 percent of total sales this business year, compared with 10 percent in 2008.

AU Optronics Corp. and Chi Mei Optoelectronics Corp., Taiwan’s two biggest liquid-crystal display makers, said last week they expect third-quarter sales to rise from the previous three-month period, because there is a global shortage of glass while demand from China is strengthening.

In June, China’s TV makers said they planned to purchase $4.4 billion of flat-panel products from Taiwan this year, doubling their December forecast.

‘Cautious Optimism’

“What you’re seeing happening in emerging Asia, not just China, is encouraging,” U.S. Treasury Secretary Timothy Geithner said in a Bloomberg Television interview in Paris yesterday. “It provides some basis for cautious optimism that we’re going to start to come out of this over the next few quarters.”

Federal Reserve Chairman Ben S. Bernanke will brief Chinese officials at a summit this month about how the U.S. plans to keep inflation in check over the next few years, according to people advised on the plans.

David Loevinger, a U.S. Treasury official coordinating the meeting, told business lobbyists and lawyers in Washington this week that the Obama administration was enlisting Bernanke to try to assuage Chinese concerns about long-term U.S. economic health, people at the meeting said on condition of anonymity. China, the largest foreign investor in U.S. Treasuries, increased its holdings to $801.5 billion in May.

It’s still too much to hope that China can rally the world, given that its stimulus has been focused on bolstering demand at home, said Robert Carnell, chief international economist at ING Financial Markets in London.

“There will be some economies that benefit on the sidelines, but that’s not going to help the average Joe on a street in America,” he said. “Its economy is not going to offset the U.S. and Europe declining simultaneously.”

To contact the Bloomberg News staff on this story: Kevin Hamlin in Beijing on khamlin@bloomberg.net; Last Updated: July 16, 2009 20:24 EDT

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Yen Rises After Jakarta Bombs; Stocks Advance on IBM Earnings

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By Justin Carrigan and Daniel Hauck

July 17 (Bloomberg) -- The yen rose as bomb blasts in Indonesia sapped investors’ appetite for higher-yielding currencies. Stocks climbed after International Business Machines Corp. raised its earnings forecast.

The Japanese currency rose 0.8 percent against the Indonesian rupiah as of 11:06 a.m. in London and advanced 0.8 percent against the Australian dollar. The MSCI World Index of 23 developed nations added 0.2 percent, the first five-day gain since May.

Investors sought the perceived safety of the yen after explosions at two Jakarta hotels killed at least nine people. The MSCI World has surged 6.7 percent this week, the most since March, as forecasts from IBM and Intel Corp. exceeded analysts’ estimates and earnings at Goldman Sachs Group Inc. and Johnson & Johnson beat projections. Nouriel Roubini, the New York University economist who predicted the credit crisis, reiterated yesterday the U.S. recession may be over by the end of the year.

“Investors have looked at the events in Indonesia and decided that’s a good reason to take profits on what has been a fairly bullish week in terms of risk tolerance,” said Simon Derrick, chief currency strategist in London at Bank of New York Mellon Corp., the world’s biggest custodian of financial assets.

The yen rose against 15 of the 16 most-traded currencies, strengthening to 93.76 per dollar and 132.25 per euro. Treasuries rose for a second day, sending the 10-year note’s yield down 1 basis point to 3.56 percent.

European Stocks

Europe’s Dow Jones Stoxx 600 Index rose 0.5 percent, bringing its weekly gain to 6.9 percent, the biggest since November. Sandvik AB, the world’s largest maker of metal-cutting tools, led the advance, surging 5.4 percent in Stockholm after reporting an operating loss that was smaller than the company predicted last month.

IBM advanced 1.1 percent in Germany. The world’s biggest computer-services provider posted second-quarter earnings that beat analysts’ estimates after the close of U.S. trading yesterday. Bank of America Corp., Citigroup Inc. and General Electric Co. are scheduled to report results today.

Google Inc., the owner of the most popular search engine, tempered the outlook for the technology industry by reporting slowing sales in the second quarter. The shares retreated 3.5 percent in pre-market New York trading.

Profits fell an average 35 percent at Standard & Poor’s 500 Index companies in the second quarter and will drop 21 percent from July through September, according to analyst projections compiled by Bloomberg. That would extend the streak of quarterly profit declines to a record nine, Bloomberg data show.

CIT Talks

Futures on the Standard & Poor’s 500 Index were little changed, as CIT Group Inc., the U.S. commercial lender that failed to get a federal guarantee for its bonds, said it’s in talks with potential lenders to secure funding. CIT may need as much as $6 billion to avoid filing for bankruptcy protection, according to CreditSights Inc.

The MSCI Emerging Markets Index rose for a fourth day, gaining 1 percent to the highest level since June 15. The 22- country benchmark has climbed 6.2 percent this week, poised for the best weekly gain in more than two months.

The Indonesian rupiah declined the most in two weeks against the dollar after the bombings, while the nation’s stocks and bonds slid. Indonesia went ahead with a 35 billion-yen ($374 million) sale of 10-year samurai bonds, a banker involved in the deal said. The offering was the first by a nation in the samurai market, where non-Japanese issuers sell yen-denominated bonds in Japan, since the collapse of Lehman Brothers Holdings Inc. in September.

Emerging-Market Returns

Hungary’s government sold 1 billion euros ($1.4 billion) of bonds, a banker involved in the deal said, its first international debt offering in more than a year.

Emerging-market bond investors have recovered all their losses from the worst financial crisis since the Great Depression. JPMorgan Chase & Co.’s EMBI+ Index, which tracks total returns on the foreign-currency debt of developing nations, rose to 444.37 yesterday, the highest since the index began in December 1993. The gauge had dropped as much as 30 percent from May through October. It slipped to 444.32 today.

Credit-default swaps fell, signaling an improvement in perceptions of credit quality, with the high-yield Markit iTraxx Crossover Index dropping 13 basis points to 708, according to JPMorgan Chase & Co. prices.

Crude oil for August delivery fell 0.4 percent to $61.78 a barrel on the New York Mercantile Exchange, snapping two days of gains.

To contact the reporters on this story: Justin Carrigan in London at jcarrigan@bloomberg.net; Daniel Hauck in London at dhauck1@bloomberg.net Last Updated: July 17, 2009 06:11 EDT

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Asian Stocks Head for First Weekly Gain in Three; Nomura Gains

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By Jonathan Burgos

July 17 (Bloomberg) -- Asian stocks rose, with the MSCI Asia Pacific Index set for its first weekly gain in three, as economist Nouriel Roubini said the worst of the financial crisis is over and reiterated that the recession may end this year.

Mitsubishi Estate Co., Japan’s biggest property developer by market value, rose 4 percent after Barclays Plc gave the company its top “overweight” rating. Nomura Holdings Inc., Japan’s largest brokerage, gained 2.5 percent after the Nikkei English News said the nation’s investment banking revenue rose. Macquarie Countrywide Trust jumped 13 percent in Sydney after selling a stake in U.S. properties.

The MSCI Asia Pacific Index added 0.6 percent to 103.17 as of 1:06 p.m. in Tokyo, taking its gain this week to 2.5 percent. The gauge has rallied 46 percent from a five-year low on March 9 amid optimism stimulus policies around the world will revive the global economy.

“Sentiment has been gaining momentum following positive economic and earnings news,” said Michiya Tomita, who helps manage $61 billion at Mitsubishi UFJ Asset Management Co in Hong Kong. “Most of the good news has been priced in. Investors will be looking for more catalysts in the next few weeks as companies report earnings.”

Japan’s Nikkei 225 Stock Average rose 0.5 percent, while Hong Kong’s Hang Seng Index gained 1.3 percent. Taiwan’s Taiex Index climbed 1.2 percent. Indonesia’s Jakarta Composite Index fell 1.4 percent after explosions rocked two hotels in the city.

Orient Overseas (International) Ltd., Hong Kong’s largest container line, surged 52 percent, rebounding from a 32 percent plunge yesterday that analysts said may have been caused by a trading error. Nintendo Co., which gets 43 percent of its sales from the U.S., fell 1.2 percent after video-game sales in the U.S. fell by most in nine years last month.

Worst Is Over?

Futures on the Standard & Poor’s 500 Index lost 0.3 percent. The gauge reversed a loss of as much as 0.6 percent to end the day 0.9 percent higher on Roubini’s comments.

“The freefall of the economy has stopped,” the New York University professor who predicted the financial crisis said at a conference in the city. “There is light at the end of the tunnel. And the light at the end of the tunnel for once is not the one of an incoming train.”

After the close of trading, Roubini said his comments were a reiteration of his view that the contraction would last 24 months.

The MSCI Asia Pacific Index has risen this week as government reports showed economic growth accelerated in China and U.S. manufacturing improved. Singapore also upgraded its forecast for gross domestic product. Intel Corp. forecast sales that beat analyst estimates, while International Business Machines Corp. yesterday raised its profit forecast.

“Improved investor risk appetite is being reflected in rising stocks,” said Juichi Wako, a senior strategist at Tokyo- based Nomura Holdings Inc. “The market is starting to surmise that U.S. earnings will not be as weak as forecast.”

Rising Valuations

Stocks on the MSCI Asia Pacific Index are trading at an average 43 times reported earnings, up from the 15 times shares were trading at during the market’s trough in March. Companies on the S&P 500 are currently at 14 times profit.

Finance stocks accounted for 47 percent of the MSCI index’s advance today. Mitsubishi Estate jumped 4 percent to 1,472 yen. NTT Urban Development Co., which manages properties for Japan’s phone monopoly, added 2.7 percent to 88,000 yen. Sumitomo Realty & Development Co., the country’s No. 3 developer, climbed 2.9 percent to 1,628 yen.

Takashi Hashimoto, a Barclays analyst in Tokyo, assigned “overweight” recommendations to all three companies in new coverage.

Nomura added 2.5 percent to 732 yen. Japanese investment bank commission revenue in the quarter ended in June rose 90 percent to $874 million from a year earlier, Nikkei English News reported, citing research firm Dealogic.

Macquarie Countrywide climbed 13 percent to 58 Australian cents. The company agreed to sell its 75 percent interest in a U.S. portfolio of 86 properties for $1.3 billion.

Slumping Sales

Nintendo, the maker of Wii game consoles, declined 1.2 percent to 25,640 yen. Sony Corp., the maker of PlayStation game consoles, slipped 0.9 percent to 2,265 yen.

Total U.S. revenue from gaming hardware, software and accessories tumbled 31 percent, the largest drop since September 2000 and prolonging the contraction for a fourth month, according to NPD Group Inc.

June sales of Sony’s PlayStation 3 fell 59 percent, while those of Nintendo’s Wii console slumped 46 percent, NPD said.

Orient Overseas surged 52 percent to HK$35 following yesterday’s 32 percent plunge. The company had “no clue” what caused the decline, spokesman Stanley Shen said.

“We are not aware of any fundamental change in the company or the industry to cause the sharp decline,” Goldman Sachs Group Inc. analyst Tom Kim said in a research note today, reiterating his “buy” rating on the stock. It may have been a “trading glitch,” he wrote.

To contact the reporter for this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.

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S&P 500 to Rise More, Credit Suisse Says: Technical Analysis

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By Francesca Cinelli

July 16 (Bloomberg) -- The Standard & Poor’s 500 Index may rise further after breaking a “major resistance” level yesterday and crossing its 233-day moving average for the first time since December 2007, according to analysts at Credit Suisse Group AG who use price charts to make forecasts.

“A rise above the June highs is expected in the coming 2-3 weeks,” technical analysts at the Swiss bank including Zurich- based Mensur Pocinci wrote in a report today. “With yesterday’s advance most stock markets have triggered upgrade levels on the short- and medium-term horizon.”

The benchmark index for U.S. stocks rose to 932.68 at yesterday’s close, bringing this week’s increase to 6.1 percent. While the measure, down 1.4 percent since June 12 when it reached a seven-month high of 946.21, may fall back to 925 in the next day or two, the uptrend is “expected to resume,” Pocinci said in a phone interview. “The upward movement in the last few days was too strong and too fast.”

Technical analysts look at price charts to forecast resistance levels, or ceilings restricting further price increases, and support levels, or floors limiting declines.

“The break of the 233-day moving average, which is a Fibonacci number, is a further bullish sign,” Pocinci said. The S&P 500 closed above its 233-day moving average, currently at 928.61, for the first time since December 2007.

Fibonacci analysts use a system pioneered by 13th century mathematician Leonardo Pisano, who discerned ratios from proportions found in nature. The analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low. Passage through one level is a sign an index will keep moving to the next.

To contact the reporter on this story: Francesca Cinelli in Milan at fcinelli@bloomberg.net.