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Bubblicious

Posted By Mike On Aug 10, 2009 @ 4:03 am In Long term view, bear markets, crash, technicals | 9 Comments

The Indian stock market since 1990:

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Source: http://www.nseindia.com/

I suspect that this market will end up back at 2002-2003 levels. Manias like this tend to be completely retraced, like the oil bubble from ‘04 to ‘08, which sports a similar chart to the above, complete with a big B-wave bounce that should be peaking soon, though by looking at this chart alone I wouldn’t rule out $80:

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Source: http://futures.tradingcharts.com

Thought I’d take a look at some other wild markets:

Russia’s RTS:

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Source: http://www.rts.ru

Russia hasn’t made much of a retracement, only about 25%, but if the US markets fall from here you can bet it will join them.

Shanghai is ready to rumble (about a Fibonacci 38% retracement, just like the S&P 500):

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Yahoo! Finance

Brazil’s Bovespa - about a Fibonacci 62% bounce:

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Bloomberg.com

Why not check out the Swiss? Ok, they’re not so wild — just a 33% retracement here, but a remarkably similar pattern to the S&P 500. Also, it is worth noting that the Franc went from roughly $0.83 to $0.93 over this period, so this was a much larger rally when priced in dollars, like many of the other foreign markets.

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Bloomberg.com

WIth foreign markets sporting high valuations and high exchange rates, it looks to me like the US dollar is going to be where it’s at going forward. Shorts that capture the exchange rate movement along with stock moves would be attractive.

Share and Enjoy:

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