Today will be our first trading day for 2011 and we thought it would be nice to kick off by reviewing past 10 years history of our world indices and commodities.
Singapore (STI)
STI reaches the 10 years peak level approximately approaching end of 2007 whereby the Lehman brother bankruptcy triggered the global economics crisis that went most countries into recession mode.
It was one of the biggest pullbacks whereby STI falls back to 2003 level.
Luckily our countrymen have fought very hard for the past years to recover and now STI is back to the pre-crisis level.
However it also served as a warning to traders that any upside in 2011 will be limited especially when STI approaches to the 10 years peak level. The traditional method of “Buy & Hold” will no longer be working perfectly as market will swing more volatile than ever.
Hong Kong (Hang Seng)
Some readers may be curious on why we loaded the charts of live charts for Hang Seng at the forum.
If we look closely, both 10 years charts of STI and Hang Seng are very similar. In fact, Hong Kong has always been Singapore finance rival where both countries often compete in the similar field.
Japan (Nikkei 225)
Many have said that the glory of the rising sun is over. The rising trend will go towards the Chinese where they will be dominating the global economics for at least next 5 years.
The 10 years peak of Nikkei is way back at beginning of 2000.
Although Nikkei managed to break 18000 at end of 2007 but the Lehman brother crisis also causes Japan to go into recession and till now having a hard time getting back on its feet.
Based on that, we would not advise any readers to trade in Japan market as it is relatively weak.
United States (DOW)
Over the past 10 years, US market did not really grow significantly as it just into consolidation mode.
We would expect the resistance at 12000 for DOW to be a very tough nut to crack.
Throughout the 10 years time frame, DOW only managed to maintain the indices above 12000 only for approximately 1.5 years. In 85% of the time, DOW is below this level.
This is one of the main reasons that we always advise not to invest solely in US market since Singapore and Hong Kong are comparable if not better.
Gold
There is an old saying that “Gold is good and it is more valuable than cash”
My parents are obviously better investors than I do.
From the charts, we could see that for the past 10 year’s prices increased from $300 to $1400 (4.7 times) and only pullback once in end of 2008.
However this pullback did not defer prices of gold to climb higher and reach higher height.
Do consider gold for long term investment if interested.
Crude Oil
Oil has always been our important natural resources for global economics. Investors will buy oil when they are bullish on the economics ahead.
Big companies in Singapore such as SIA which depends oil prices for their company profits employs traders to help them secure at good prices especially when they are bullish on their business.
As of now, oil has not recover back to the pre-crisis level since the economics still in fragile conditions and any huge increase of prices will lead to another crisis as business fails on high oil pricing.
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