Monday, 23 May 2011

ASX 200 trends down, S&P 500 at edge of cliff, China with one foot dangling

Over the weekend I posted daily and hourly charts of the ASX 200 showing it to be in a down trend at those time frames. This weekly candle chart of action for the past 4 years provides more perspective. The market looks to be heading lower to test the trend line drawn from the 2009 lows. The charts of the US and Chinese markets that follow increase the confidence in that view, particularly if the US heads lower tonight.

This S&P 500 daily candle chart shows the market is testing the trend line that has supported the run higher over the past year. A break below today's after hours market low of 1317 would breach the trend line, and raise the odds of a down trend developing at this time frame.

This weekly candle chart of the China H-shares index shows that the market has breached the trend line formed from the late 2008 lows, raising the odds of a down trend developing at this time frame.

AUD/USD daily chart

The market looks set to test the top of the previous trading range, around 1.05. A fall through that level would open the way for a test of parity, and lower.

EUR/USD down trend continues

This daily candle chart of action for the past two years shows the down trend continuing. There may be some support around 1.38, but remember the adage "there is no such thing as support in a bear market, or resistance in a bull market". Keep your eye on the trend.