Wednesday, 27 July 2011

ASX SPI 200 daily chart down trend

Amid the excitement in Australia today about new highs for the Aussie dollar, let's not forget to keep one eye on the stock market. The daily chart down trend continues, and with the moving averages on the cusp of crossing bearishly, an extension and acceleration of the down trend is a strong possibility.

EUR/USD daily chart trend line touch and hourly chart wedge

Daily chart trend line touch. I think the angle of the trend line is significant, as I have seen it numerous times in the EUR/USD, but I am not so sure that this particular instance/line is significant, as it is not drawn from a price extreme. Anyway, it is what it is., and the pattern on the hourly chart certainly makes me think that at least a short term top is nearby...

Hourly chart wedge. The market has had a few nibbles at the top wedge line, and could meander further upwards below the line without invalidating the pattern.

AUD/USD monthly chart trend line touch

Will the AUD/USD bounce down from the trend line or surge through it? Mainstream media headlines like today's

$US1.50 a prospect as dollar dazzles

from the Sydney Morning Herald are enough to make a contrarian call a top. I'll stay out of the forecasting game, and simply say, watch that line.

ASX SPI 200 breaks trend line on hourly chart

Hourly chart including overnight trading (Oz time) showing trend line break, in the context of market action which has so far remained below the down trend line from the April high, shown on the daily chart...