short index, component stocks, ETF forecast workshop

Dr. Warren Huang, Founder, OSA, USA wh3928@yahoo.com    www.osawh.com

- 3:04 pm August 10, 2011 Wall Street Journal Real Time Economic Blog Warren Huang wrote:
The market is overpriced for correction over optimistic over economic recovery, housing market rebound. The first half economic data disappointed us drag market for 20 % correction Dow will graduately slipping below 10,000 in short term we are long way to priced in for recession, which we will be close by the end of this year. as repeating 2009 of Dow 6500. This time recession will come and go slowly because all option of QE1, QE2, stimulus, bail out all ready tried and failed, and debt ceiling will force us for spending cuts. details on http://www.osawh.com/recession.html

                                                                                                                                                          Abstract

This paper demonstrated Huang’30 years pioneering proactive structural behavior arbitrage assets ( equities, bond, commodities, housing ) pricing research, teaching, consulting for China , Taiwan, US 15 cities TV, radio, 30 million   high net worth individual and institutional investors, fund managers through integrating last 30 years macro, financial , industrial economic and investors daily trading volume ( confidence ) data into real time   stock indices and its component portfolios earning performance, stock prices and commodities , housing price mechanism Operations Simulations Analysis (OSA).
These asset prices simulators have been used for tracking   global central banks monetary, economic, fiscal policy ,   financial systemic stability risks , Basel II Risk, corporate scandals applications . It quantify and compensate financial system and specific noise ( uncertainties), identify the real time global financial market asset prices   defferential due to speculation resulted mispricing ( over and underpricing in interest rate, currency, inflation, housing, equities price bubbles and earning announcement ) in last 20 years global banking, financial crisis, recessions systemic risks , corporate scandals cycle months, years ahead of the emerging bull, bear market trend to maximize risks adjusted strategic indexing ETF arbitrage return for global asset allocation . These Proactive APT simulator compensate current APT and CAPM systemic noise due to betting on the wrong side of monetary policy, interest rate, bail out pan impact on assets price.

Huang extended proactive structural OSA arbitrage asset pricing to macro, financial, industrial econometrics integration into real time investors speculation behaviors tracking

misprcing (over and underprice) through Exponential GARCH estimation and Granger causes, consequences co-integration . It simulate US Fed monetary, economic, fiscal ( tax cuts,

bail out , stimulus package policy impact on dollar currency, unemployment, inflation, interest rate on mortgage default and Dow Jones Index, S&P 500 index, NASDAQ Index and its banking, finance, high tech, retail energy, biotech component stocks ,

Beware of excessive liquidity, from stimulus, bailout resulted equities, oil, gold , commodity , housing , debt asset price bubble burst due to China housing price bubble and inflation control , US debt crisis related downgrade and Asian exit strategy rate hike fighting inflation lead to weakness in business and consumer demand resulted double dip recession, while complicated by excessive liquidity bubble resulted global sovereign debt bubble burst crisis from US downgrade, PIGS (Greece, Spain, UK, Portugee se , Italy)) resulted commodity prices bubble lead to inflationary pressure and credit tightening in exit strategy.
2010- 2011 currency, oil, gasoline, heating oil, Natural gas prices forecast:
US dollar steady in current narrow range against major currency despite QE2, only appreciate against Asian currency with good trade surplus.
China RMB will stay in narrow range 6.40- 6.50
Australia 0.95- 0.99, China RMB 6.4- 6.5, Singapore 1.20- 1.30 Taiwan NT 28.5- 30.5 Won 1055- 1200 Indonesia 8500- 9000 India 43.5- 45   Malaysia 3.00- 3.20   Thailand 28.5- 30
China credit tightening housing price bubble and inflation control, in 2011 to reduce GDP from 12 % to 8 %, M2 money supply growth from 28 to 15 % in 2011 and US exit strategy fighting inflation in second half 2010 will cut oil demand and lead to oil price peaking out in 2011
Oil price will be peaking out 66- 86 after QE2 ended in 2011    3 Q and 71- 89 in 4 Q   2011
Gasoline price will be   220- 270 in 3 Q, 190- 220 in 4Q , 2011
heating oil price will be 210- 270, 3 Q, 210- 230 in 4Q   2011
Natural   price will be rebound from3.5-4.50   3 Q, 5.0- 6. in 4Q   2011
Gold price will be rebound from 1550- 1850 in 3 Q, 1500- 1850 in 4Q   2011
US dollar decline due to downgrade but   continued debt crisis in PIGS and UK support US dollar 1.35- 1.45 EURO ,in 3 Q, 1.25- 1.42 in 4 Q   2011
and 1.55- 1.69 pound in   in 3, 4 Q 2011
US dollar 70- 80    3Q, 70- 76-   in   4 Q, 2011 due to Japan recovery, US double recession
China stable, consistant, gradual independent RMB policy will lead RMB appreciate in 4 % range to 6.3- 6.45 against US dollar and basket of money ( US, Yen, EURO)
predicted Feb. March 2009 in Hong Kong , Pudong investment summit forum on Proactive Structural Dynamic Demand Side future, cash Oil Price Simulation : US tax rebate in 2009 and China economic stimulus package
　

Dow Junes will be return to consolidate in 9000- 9900 soon , NASDAQ test 2000- 2200, S&P test 1000- 1100 and may test in second financial crisis dip triggered by Greek and PIGSS

Comment by Dr. Warren Huang on Wall Street Journal Real Time Economic Blog Aug. 30, 2010
With personal income trailing spending, sluggish stock market and export growth, US consumer spending rebound is not sustainable!
US economy will getting worse as continued housing market slump, at record jobless rate despite record low interest rate, any drive to prove lower interest rates will not help and housing rebound and prevent economic double dip recession , July consumer spending surge is not sustainable, as we are facing China credit tightening economic cooloff from GDP of 11 % to 8 % by year end and Asian countries India, Korea, Australia rate hike fight housing prices bubbles will cut our export growth.. Euro are debt crisis will drag GDP to 1 %, Japan facing near recession, with stimulus facing slowdown ahead.
US second GDP only grow 1.6% even with Fed's aggressive MBS buy back, housing, auto incentive program We will expect the second half GDP much below 1 % with all these stimulus program removed since April.
In the mean time we are facing trilemma situation with record personal, business, government debt and excessive liquidity all ready endange rcredit rating and inflation fear
That is why US stock bullish index plunged from 30 to 21 ( close to 2009 March low of 19 , Dow Jones index will test 9000- 9900 ahead

details on www.osawh.com/recession.html www.osawh.com/centmaf.html www.osawh.com/dowwp.htmComment by Warren Huang -Wall Street Journal Market Beat Blog November 13, 2008 at 1:10 pm

Dr. Warren Huang comment on Yahoo, finance economic forecasts July. Aug. 12, 2010

Even the top US economic forecasters is still overoptimistic over US second half economic growth, carried away by the bullish stock ad currency markets.
My prediction is much realistic by considering US record housing foreclosure, housing market is not out of the wood, record joblessless rate at 9.6 % in addition to China credit control over housing bubble GDP slowdown from 11 to 8 % , India, Korea , Austrialia,rate hikes, EURO debt crisis resulted slowdown resulted US GDP drop below 1.5 % in the second half. ISM will be down to 53, housing start continue decline, housing sales, industrial production will continue decline.
details on www.osawh.com/centmaf.html www.osawh.com/dowwp.htm www.oswh.com/econ.htm

countries debt crisis, China/Asian slowdown, warned on 2007 Peking university International financial engineering risk management June 2007 and on Wall Street Journal Market beat blog since Sept. 2007 and March 5,

2008 on China Fund World 2008, Shanghai Conference that US housing price slump , credit crisis continue into 2009 , drag economy into 1980 style double dip recession ,banking, finance, housing investment banks loss trillion dollars

writedown, banking, finance, mortgage stock down 50- 90 %, drag US and global stock 50 % bear markets correction, S&P and Dow Jones, NASDAQ plunge 50 % with Dow

Jones index test 7000, SP500 test 700, NASDAQ test 1250 as US economy entering deep recession early 2009 , there will be no 2008 Santa Claus yearend rally ( Taiwan,

Hong Kong, India stock indices down 50-70 %) %)in recession bear market correction and the overpricing of US high flier Google, Apple, Goldman Sach, China PetroChina, Sinopec,

and Bear Stearn 29 billion hedge fund failure , rescue Fannie Mae, Freddie Mac AIG mortgage crisis, with average error below 1.5 %, correlation over 0.98.

This work also extend proactive arbitrage pricing into financial market behavior tracking forecast mortgage crisis, recession impact on banking, finance, share stock price, tracking

forecast by introducing stock indices and stocks trading volume ( investor confidence) relationship into price, return forecast with correlation constant greater 0.98 , average error

below 2 % S & P 500 E-mini future hedging strategy http://www.optionsxpress.com/welcome/tour/trade/futures/sp500.aspx?SessionID=
　

Dr. Huang will be the keynote speaker for EUROMONEYs China derivatives market conference March 24-25, Shanghai 2009 to speak on 2009 China/US economic/Capital market outlook and Challenges, opportunities in China/global onshore, offshore derivative markets

Keyword: emerging market behavior finance arbitrage assets prices bubble, financial crisis US mortgage default corporate scandals ETF indexing arbitrage , systemic noise risks

global stock indices trade volume/price relations

DO not miss the following full day proactive structural simulation , forecast of Ultra long short strategy of US major indices ETF and component stock price performance workshops
Optimal long- short of S &P 500 ETF Optimal long-short of Dow Jones ETF Optimal NASDAQ ETF long short strategy

China/global Derivatives markets 2009 conference Shanghai, China
　

Comment by Warren Huang , Wall Street Journal Real Time Economics Blog- October 17, 2008 at 10:05 pm

US Sept. consumer confidence plunge to 38, ISM manufacturing purchaser index plunge to 43 and jobless rate to 6.1 % and Dow Jones plunged 40 % third quarter GDP contract 0.3 %core inflation up 2.9 %, warned, predict by me Sept. 2007 on this blog that US housing slump continue , will entering double dip inflationary recession 3Q 2008 despite rate cuts, stimulus, bail out plan and extends into deeper recession contracting by 2 % in $Q 2008 and 1Q 2009, resulted by full impact o business, consumer spending decline due to 6.5 % jobless and 20 % housing slump, 40 % stocks market loss
The real causes of current mortgage, credit, financial crisis and recession are due to poor financial, monetary policy decision modeling in asset pricing and risks valuation mechanism, MBS, CDO , the burst of super housing, commodities asset price bubbles caused by 7 year longest expansive excessive money supply, easy credit policy .
Global central banks, financial markets financial decision still rely on 30 year old probabilistic, statistical Capital Market Asset Pricing (CAPM) and macroeconomic modeling, ignoring asset price impact on inflation and financial, housing , MBS, CDO prices.
Predicted by Dr. Warren Huang, pioneer of Proactive Global Asset Pricing Mechanism , June 2007 , Beijing, Wall Street Journal Economic, Market Beat
Blog Aug.2007 and March 5, 2008 Pudong, China Fund World 2008 to 200 global top investment banking, fund managers that Global Housing price bubble burst, prices plunge 30 % into 2009, drag global economy into recession and stocks bond, oil, commodities, metals ,Derivative Asset Prices Bubbles Burst with 50 % Price Correction Cause Credit, Financial Crisis and Economic Recession, ( As Dow Jones, SP 500, NASDAQ drag global stock indices plunged more than 50 % into 2002 recession low ,( Dow Jones after current consolidate in 8000- 9000 will test 7000, NASDAQ test 1250, S&P test 700 low, oil price plunged 50 % from 147 to 60，gold from 1050 to 600, Gas oil from1300 to 600 , corn from 800 to 350, cotton from 80 to 44 as global economy enter deep recession by year end, despite US 700 billion and ECB 2.3 trillion bail out to stabilize credit crisis

details on www.osawh.com/Fedcrisab.htm www.osawh.com/mortdefa.htm www.osawh.com/commody.html www.osawh.com/centmaf.html

Dr. Warren Huang (黃華南博士) Pioneer, proactive structural dynamic global inflation, macro economy, daily financial markets interest rates, currency, stock, bond, derivatives, housing, commodities, oil asset pricing and risks valuation markets fundamentals price mechanism, accurately warned on Wall Street Journal Market beat Blog Sept.19, 2007 and Mar 5, 2008 masterclass workshop China fund world 2008, Pudong, China to Goldman Sach managing directors JPM, UBS and 150 China QDII/QFII fund managers that US Fed aggressive rate cuts drag dollar to 1.53-1.65 EURO, 95- 108 Yen, economic stimulus boost consumer spending on gasoline and jet fuel summer, demand, driving gasoline , heating oil to 415, oil price to 121-145, commodity price double, will peak out as US dollar rebound follow Fed ending rate cuts cycle , can not stop sub-prime crisis spreading, regional housing price slump 30-50 % and credit crisis, crunch crisis continue through 2009 drag economy into 2009 double dip inflationary recession resulted trillion housing and stock market loss and US, global stock indices bear market 50 % , Dow Jones test 7000- 8000 NASDAQ PLUNGE testing 1250- 1500 and high fliers (GOOG, PTR, AAPL) , IT, retail stocks facing correction, with banking, finance, housing share price plunge 70- 90 %, dollar making to new low 90 Yen, commodity prices doubled, and bubble burst plunge 50 % in recession widening bond , CDS spread and failure in MBS/CDO, Bear Stearn 30 billion dollar MBS hedge fund and government steps rescue Fannie Mae, Freddie Mac bail out, despite Fed rate cuts . He also warned top global QFII management on Peking Univ June 2007 International Financial Engineering Conference that China overheated housing, stock market wealth gain resulted inflation over 8.7 % will lead to China Peoples Bank credit tightening to remove excessive liquidity, Banking housing, stock markets follow US housing price slump, recession, bear market correction, with Shanghai A testing 1800 through early 2009 until economy softlanding
China is suffering from housing market overheating, with 300 % gain in housing prices still up 3.5 % , FIXED investment , export growth and consumer spending still up 26 %, first 9 month GDP still up 9.9 %, CPI up 7 % despite China peoples Bank 6 rate hikes, 16 bank deposit rat hike to 17.5 %. China need to further cut its M2 money supply growth from 15 % to 12 % next year to achieve housing price cut of 30 %, CPI to 4 %, GDP to 8 % to achieve soft landing and start of bull market stock rally.