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Monday, 28 July 2014

S&P 500 still trending up, while Dow breaks lower from bearish wedge, a divergence that will not last

First chart illustrates that the S&P 500 continues to trend up.

Second chart shows that in contrast to the S&P, the Dow has broken lower from a bearish wedge pattern. Both charts include all sessions trade through to the current European session.

So have US stocks topped as the Dow is signalling, or will they continue to trend higher as per the S&P? Nobody knows, of course, but the benefit of doubt must be given to the up trend, unless the Dow's break lower proves itself to be genuine by declining swiftly and relentlessly. As I have stated many times before (most recently here), and as the longer term charts suggest, the June low is key. Below that and the top could be in.

Sunday, 27 July 2014

S&P 500 below 1888 would confirm big top is in

A big top could be in for the S&P. As I showed last week, once the current impulse wave is complete, the entire rally from the 2009 low could be finished. That said, the daily chart Elliott Wave count for the S&P suggests that a move below 1888 is required to take the market below the wave 1 peak, and therefore is required to confirm that the current impulse wave is complete. In the meantime, the alternate count shown below remains alive, suggesting the possibility of new highs.

Dow breaks lower from six month bearish wedge

Daily chart shows break lower from six month bearish wedge. Charts include all sessions trade.

Monthly chart suggests that a move below last month's low (16673) would complete a false break higher from a huge bearish megaphone pattern, and call for a decline below the 2009 low.

Gold's false break lower a bullish edge, with last week's low key to that view

Thursday, 24 July 2014

ASX 200 finally breaking through long term trend line resistance, what next?

Weekly chart shows the ASX 200 finally breaking through long term trend line resistance, after many previous attempts. Charts in this post include after hours trade through to the current European session. Barring a big reversal lower in the next 36 hours or so, the market should close the week above the trend line. So, what next?

Daily chart suggests that trend channel resistance would be tested around 5625. Given the potential that US stocks are very close to the end of their rally from the 2009 low, combined with the relatively weak weak weak performance of the ASX 200 since that 2009 low, I wouldn't be getting too excited about the bullish potential of this burst higher. I'm looking for the ASX 200 to complete a false break above that weekly chart trend line, some time in coming weeks. I'm fully aware that this market may not follow my roadmap, in which case I'll stay clear of trading it til either the market changes path, or I change my plan.

GBP/USD testing two key long term supports

GBP/USD is testing the trend line drawn from the 2013 low, plus the support zone around the 2005 low and 2009 high.