DOW Wednesday broke record high, Thursday down 153 point, then Friday up 168 point, can your heart take it?

DOW broke history high on Wednesday.  Down 153 point on Thursday.  Then up 168 point on Friday, crossed the previous (Wed) high.   How about it?  Can your heart take it? 

Since I started this blog in August, I mentioned that today equities market is mend for trade rather than invest, put on your belt and be prepare to ride on roller coaster.  June, the first correction for the DOW.  Then followed by August and then mid September.  Rewind back the past 5 months trending for DOW.  Do you realise something similar?  The pattern on how it went up and came down.  Yes, DOW 怎么样上 就怎么样下。That's why I said that last week "The pattern that DOW moved up plus its trading volume is not in favour.  It needs a retracement with consolidation.

This few days, traders are watching closely on China Third Plenary Session.  The outcome will affect the China and Hang Seng markets.  While we are waiting for the outcome, let's look at some of the economic data and politics action over the past one week. 

China:-

• Third quarter GDP 7.8% versus 7.5% in second quarter.
• Manufacturing PMI rose to 51.4 in October from 51.1 in September.
• Non-manufacturing PMI rose to 56.3 in October from 55.4 in September.
• Industrial output rose 10.3% in October from a year earlier, beating market expectation.
• Retail sales up 13.3% in October.
• Exports rose 5.6% from a year earlier, while imports jumped 7.6%
• Real estate investment rose 19.2% in the first ten months of 2013 from the same period a year earlier.
• CPI accelerated slightly to 3.2% in October which led by higher food prices.
• China needs o sustain an economic growth of 7.2% to ensure a stable job market, Premier Li Keqiang made this remarks on last Tuesday "We want to stabilize economic growth because we need to guarantee employment essentially." 

US:-

• Third quarter GDP 2.8% versus 2.5% in second quarter.
• ISM Manufacturing PMI rose to 56.4 in October from 56.2 in September.
• ISM Non Manufacturing PMI rose to 55.4 in October from 54.4 in September.
• Unemployment claims last week 336K versus 345K in previous week.
• Unemployment rate up by 0.1% to 7.3% in October.
• Non Farm employment change 204K versus 163K in September.
• FED Chairman Ben Bernanke said on Friday that there was still an "awful lot of slack" in the US labour market, but cautioned that economic data did not do a good job of providing an accurate measure.

Europe:-

• Eurozone factory order rose for a fourth consecutive in October with a Manufacturing PMI of 51.3 in October, up from 51.1 in Spetember.  Only France and Greece, out of the 17 countries that use the euro, failed to enjoy improved condition. 
• S&P down grades France rating from AA+ to AA

Analysis:

• China will not go back to double digit growth.  The Third Plenary Session meeting should be on economic reform, rather than economic planning.  Therefore, I am expecting to see some announcement from the central government exercise about price control and policy on banking sector.  Chinese parents are concern about the housing price in China.  Their worry and concern are similar to us.  Can their children afford to purchase a housing if estate price keeps going up. 
• As long as tapering date is not confirm, the roller coaster ride will always be there.  Traders will make use on whatever possible news and data to push the index high and low.   Therefore trade with care.  Know the S/R lines before you get in to the market.
• Europe is improving but all those outstanding issues are still there.  Watch them closely. 
• Last but not least, Middle East which has been quiet for quite a while.  Watch out for them as well. 

Happy trading.  As what I keep reminding myself  - do not be a goal keeper, catching stocks/counters that the professional traders and investors release.  Also trade with care.