STI closed below its 50 day moving average on Friday. The market has been trying to stay on the recovery path but Friday’s bearish move proved to be too strong for the market to resist. The 50 day moving average closed below it’s 50 day moving average for this first time since late Oct when the market made its recovery move.
The stock market is being pressured by fears in
STI closed with a gain of 54 points on Friday. For the week, the index was down 144 points. The carnage started due to a downside of US debt. Traders used it as an excuse to take money off the table. The index went decisively below its 200 day moving average, moving the index into bearish phase.
Looking at the daily chart, the market is still in bearish trend. Although there may be a rebound in the short term, the 50 day and 200 day moving average will serve as resistance level. Usually when market drops with such big volume, it will not be able to move above its 50 day and 200 day moving average during the first test. So expect the market to move down again after the rebound loses its momentum.
Hang Seng Index broke into “Bearish” territory since 21 Jun when the 50 day moving average made a bearish crossover with its 200 day moving average. The index has managed to stage a rebound together with the global stock market. However, traders were not able to push the index above its 50 day moving average and the inverted hammer candlestick pattern seems to warn that selling will resume in the coming weeks.
With the
It has been a roller coaster ride for commodities prices for the past few weeks. Silver had a sharp correction and that was followed by Gold and Oil prices.
The phase chart for oil is now in “Warning” phase. Looking at the phase chart, the price of oil dipped into “Warning” phase back in Nov 2010 and Jan 2011. These dips proved to be a buying opportunity with the bulls buying strength pushing the chart into a new high.
Support appears to be at 2940. The phase chart shows clearly that the uptrend is still intact. Although the index moved into “Distribution” territory in late January 2011, the index managed to recover quickly and made its way back to “Bullish” phase. The phase chart has been in “Bullish” phase since 10 Feb 2011.
The phase chart is telling investors to be careful as the market is now in “Distribution” stage. The STI index is now facing resistance at its 200 day moving average. The rebound seems to be a bear market move with momentum indicators painting a negative picture.
Note that the STI has broken its double top formation and this indicates a potential for the index to drop to the 2900 region.
As the phase indicator is showing that the market is in distribution phase, it will be wise to step aside and wait for the dust to clear before going into the market.
The market regained 2700 level on Friday but in order to negate the bearish view, the index needs to break the down trend channel line which is at 2800 level. A break below 2700 gives a target of 2580 which acts as a support for this market.
The trend for the market is now in “Distribution” stage and it will move to “Bearish” phase if the 50 day moving average moves below its 200 day moving average. All eyes will be on the market next week to see whether the index is able to hold above its support level.
The phase chart is suggesting continuation of the current up trend. The index is now near its 50 day moving average. The 200 day moving average is still rising with a positive slope meaning that the long term trend is still intact. The support level is at 3100 level and resistance is at 3220 level. The index looked to be forming a head and shoulder pattern but the index was above to rebound near its neckline. The index now has to go above 3200 level to break the current trading range of 3100 to 3220. Once this resistance is cleared, the next resistance is at 3300 level. In the mean time, the bulls should have the upper hand. Remember the trend is your friend, and that friend is pointing to further upward momentum. Happy 2011!
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.
