Our technical analysis indicate that IDX performance may deteriorate even further. See graph below.
We do not like with what we saw because above graph indicate that when this bearish situation persist until first week of February 2011, IDX will experience a bearish year. We expect phase of bearish year will be, phase one, IDX deteriorating slowly in early February until late March, phase two, IDX deteriorating rapidly in April to June, phase three, IDX experience trendless market in August until Oktober, and finally phase four, IDX may experience bear market rally from early November until early to mid December.
The worst thing about above analysis is we cannot figure out what went wrong in IDX. From developed country perspectives, first, devastating effect of credit crunch already price in and we cannot expect things getting worse much from current condition, second from firm perspectives, firm with significant portion of investment in emerging market experience good earning growth, hence supporting currently high stock valuation in developed market; second, emerging market experience surge of inflation cause by improving economic condition and better economic outlook, this kind of inflation already managed properly by central bankers using monetary tools; third from indonesia fundamental perspectives, indonesia already in a clear path of rating upgrade due to clear progress of economic growth.
Maybe what religion leaders said about lies, include economic data, being made by government is true, then indonesia economy will soon reveal their ugly sides.
Final remark, IDX may not get into bearish phase if IDX rebound and cross 3.800 level. Currently we saw economic good news not being responded positively by the market. Get ready to cut loose and let it go down.
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