May 8, 2011 At a glance
Regardless of broad’s situation, and gloomy forecasts of the economists, our cute-Chilean-economy seems to be sneakily unconnected to the situation abroad. Growing at 6%, and with an inflation rate that has not gotten near 1%, our economy shows a nonchalant attitude towards international shocks. However, just in those indicators, because these shocks are reflected on our two major gauges: benchmark IPSA, and the exchange rate CLP/USD.
Last week we received positive news, and also bad news that stopped the sudden rally generated by Bin Laden’s death, and that drove upwards major stock indexes, but that was stopped by the negative news related with the debt crisis in Europe. Later, gripping markets became gloomy, and all green numbers turned red. Nonetheless, the week ended with positive numbers, and more numbers reassuring recovery.
What’s to come this week? more apocalyptic news from Europe, inflationary pressures, and commodity prices breaking their upward trends? If so, there’s a chance to make a profit this week. Let’s start with oil. It seems to be peaked, and many oil traders were betting that the oil prices would fall. Instead, the prices kept rising. On Monday his luck finally turned around. And prices started to collapse, and have slid 12% in the span of a week. In the other hand, gold and silver prices were affected by, positive economic data. Gold will be most likely to keep its upward trend due to the long run inflationary expectations.
I consider my position to be a little different; I consider that there’s no data backing a medium-term falling of commodities, so I bet it is temporary. Nevertheless, just in case, if you see that prices keep falling, breaking your resistances lines in either market your investing, just proceed with your stop loss, because one important lesson must’ve been learnt during the last months: when one investor starts the sell-off, all of them will follow him.
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