2010 is coming to a close. It has been a great year for the
The index is looking like it is forming the right shoulder of a head-and-shoulder top formation. The neckline for this pattern is between 3100 to 3120 levels.
The index has to move quickly above its 50 day moving average. Doing so will negate the head-and-shoulder pattern.
The index has been losing momentum and market participation has dwindled to a low due to the holiday season. Support is at 3100 to 3120 levels.
Hang Seng Index broke its 50 day moving average support line this week, moving the index into “Warning” phase.
The index appears to be forming a top that looks like a head and shoulders pattern top. The neckline for this pattern is at 23,000 which serve as support level. In the event that this support cannot hold the selling pressure, we are looking at a minimum downside target of 21,000.
More than US$3 billion worth of proposed IPOs in
The warning sign for further weakness has appeared and traders need to listen to the market in order to avoid being burnt by the down swing.
The FED has announced that It intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. With the news out of the way, what is next for the US dollars?
The GBP recovered from a test of its 50 day moving average and it is now testing the 1.61 level. The phase chart for GBPUSD is clearly in “Bullish” mode and the momentum may help to push GBP higher against the USD.
The next resistance for the currency pair is at 1.64 and looking at the technical charts, we may soon get there.
GBPUSD pullback after breaching 1.60 level. The current phase chart indicates that the currency pair is still in “Bullish” mode. The 50 day moving average is around 1.58 level and this serves as the support level. If the price is above to go above 1.60 level again, it will be a very good sign for the bulls.
The currency war has started. US started the ball rolling by injecting liquidity into the market. Just as the problem gambler that blames the casino for his losses, the
The likelihood of further quantitative easing in US caused the US dollar to plunge in value. The EURUSD pierced through the 1.41 level on Friday before easing to 1.39 level.
The phase chart shows that EURUSD is currently in “Bullish” phase. The 50 day and 200 day moving made a golden cross on 4 Oct and the currency pair never looked back. Any pullback has been met with more buying as investors who missed the early moves placed their bets for further gains.
The next resistance for EURUSD is at 1.4216. Support is at 1.3300 level.
Dow managed another triple digit gain last night. The phase chart is indicating “Accumulation” phase with the index now above its 50 day and 200 day moving average respectively.
All eyes will be on the FED. Although the FED is widely expected to leave the rate at current levels, investors will be digesting the FOMC statement to give clues as to where the FED policy might be headed.
The trend is certainly positive at this stage and if the market can maintain its momentum, the 50 day moving average will be set to move above its 200 day moving average, giving what we call a golden cross. That will be good news for the bulls.
S&P500 moved back above its 50 day moving average thanks to market strength for the past few days. Initial US jobless claims that were less than expected drove market higher. However there are a number of downside risks and the economy remains fragile at this stage. There seems to be a lack of business, consumer and investor confidence that is needed to push the market higher. Credit growth in the
The phase chart has endured a bearish attack with the index now in “Recover” phase. The next resistance is at the 200 day moving average at 1115. The index does not seem to have enough momentum to clear its 200 day moving average. The market is likely to trade within range of 1020 and 1120 for the time being
The next chapter of expansion will depend on whether domestic consumption is able to propel the economy to greater heights. With the population in
The
The chart pattern is still positive at this stage with the index rebounding from the low formed on 13 Aug. An inverted head and shoulder pattern has been established in the charts and this gives a target of 2740.
US market closed down 265 points on Wednesday. Bad news seems to be appearing at the same time. China reported a weaker than expected retail sales numbers and a dip in industrial production during July. The US Fed appeared to be less optimistic in the recovery and weakness is appearing in the US economy. CISCO reported revenue that fell short of analyst’s expectation after the market closed. This will put more pressure on the market.
The Dow Jones Industrial Average has now broken through the 50 day moving average and is set to test its 200 day moving average at 10,263. This will be a key level to watch for Thursday trading session.
The phase chart has made a U-turn from “Accumulation” phase. It looks likely that the index will test the 10,000 level soon.
Market got their first big sell off after a week of gains that carry the Dow Jones Industrial Average to 10,400 level. Bears got the sell off that they were looking for on Friday with a drop of 261 points. The index is now below its 50 and 200 day average, driving the market back into “Bearish” phase as indicated in the phase chart.
Earning results gave stocks like Alcoa and Intel a good bounce. However, they were not able to hold onto their gains.
This market looks to be following the “Buy on rumors sell on news” syndrome. With the index now back in “Bearish” territory, good earnings results may not be able to drive the market higher.
The dreaded dead cross where the 50 day moving average goes below its 200 day moving average appeared on the chart of S&P500 index. This brings the index into “Bearish” territory based on the phase chart.
The Dow Jones Industrial Average has confirmed its head and shoulder pattern and this gives a downside target of 8500. Similar head and shoulder pattern is also appearing on the S&P500 chart.
All these signs point to further weakness in the market.
The Dow Jones Industrial Average managed to close above its 200 day moving average this week. The index formed a “W” pattern on the daily chart. This bode well for the bulls. However, this pattern was formed on low volume, meaning that the market went up without the mass participation that is required to make a sustainable rally. It is likely that the market is moving up because of the lack of sellers rather than abundance of buyers.
The improvement in the market action is also shown in the daily phase. The phase chart has moved back to “Warning” phase from “Distribution” phase. This improvement cannot be taken as sign to buy into the market and investors looking to add to their positions should wait for a better entry point.
EURUSD continues falling amid more news of problems in
The currency pair has now broken below 1.20 levels and looks likely to fall further.
Looking at the phase chart, we see that the trend for EURUSD is firmly in “Bearish” territory. Apart from mid April where the currency bounced above its 50 day moving average, the currency pair has been in “Bear” phase since late January. Traders who had taken the signal to short the market would have seen the currency pair falls from 1.38 level to the current 1.19 level. That is a good profit for staying with the trend.
The phase chart for Dow Jones Industrial Average has fallen to “Distribution” stage and the current price movement is the typical “Distribution” market. The 9700 level is still the support level to watch. If the market pierces through this support line, we can expect to see the index test the 9000 level.
Market turmoil continues. Dow closed yesterday at 10,620 falling 162 points for the day. The euphoria from the €750 billion agreement by the EU and IMF more or less fizzled out.
There are signs that debt crisis in
The phase chart has also moved to “Bearish” phase. The longer the index stays below its 200 day moving average, the more “Bearish” it gets. The best scenario for the bulls is for the index to move above its 200 day moving average in the next few trading session and for the index to move above 3200 level. However judging from yesterday’s performance, it is unlikely that such scenario will play out. It is best to take a defensive stance and to wait for a better opportunity to buy into this market.
Dow did not manage to break the 11000 level on Tuesday’s trading session. The index has made a significant recovery since its low on March 2009 and it is not realistic to keep going up in a straight line. Looking at the monthly chart, the Dow has made 10 white candles out of 13 trading months from March 2009 to March 2010. Hence a pullback at this point is actually healthy for the market.
Judging from the phase chart, the market is still in bullish territory. However the market is already showing some fatigue as it runs into resistance level. If the index manage to overcome the 11,000 level it is most likely be coming against a strong resistance at 11,300 level. This level coincides with the 61.8% Fibonacci retracement level.
The USDJPY currency pair recovered some of its previous day losses and broke the 91 level before settling at 90.45. Weakness in the Yen is usually good news for
Most investors are not positive on
However looking at the phase chart, the Nikkei 225 is still in “Bullish” mode. The index faces a major resistance at 11000 level. If it is not able to go above the 11000 level then the support at 9867 needs to hold. If this support level is broken, then we will have a lower high and lower low. According to Dow theory, that will be bearish for the market.
The market is back to buying mood. The Dow Jones Industrial had a good outing on Friday moving up 122 points. It seems that the bulls are back in control with indexes making a move to the upside and breaking through resistance levels.
Technically, the
Global stock market has been adversely affected by policy makers in
Dow industrial average has entered “Warning” phase with the index closing below its 200 day moving average. Since moving to “Bullish” phase, the index closed below its 200 day moving average only on 2 occasions.
The manner in which the index pierced through this support line suggests that we will be seeing further weakness. For investors who are thinking of raising their bets, I suggest that they take to the sidelines to wait for clearer signs from Mr Market before putting their money into the market.
Remember to trade with the trend and make it your best friend in 2010. Happy trading!
