Sunday, 21 August 2011

Global stocks wrap

The trend is down across the globe, and there's no sign yet of stocks bottoming. In fact, if the Japanese market is anything to go by, the global decline is gathering pace and breadth. The Nikkei closed the week trading below chart support levels that had held for two years.

I've shown weekly charts below for a selection of markets.

US S&P 500...


Aussie ASX SPI 200 closed the week below trend line resistance, and below resistance from the 2010 lows...


China H-shares, I can't see any major chart support til the market moves many 1000s of points lower... maybe 10000 will provide round number support, but other than back in 2007, that level hasn't been particularly significant...


India Nifty 50, to my eyes, the strongest / least weak of all. Remember that for Australian investors, India outperformed other global markets over the past decade (see this post from July). Perhaps it will continue to outperform. Which is not to say that I would be a buyer at this point... let's wait and see what happens when the nearby trend line is tested...


Japanese Nikkei 225, two year old support shelf broken, looks likely to trend lower toward the 2008 & 2009 lows...


German DAX, should trend toward the point that the wedge began, ie. the 2009 low...


UK FTSE 100, similar to the DAX, the wedge pattern in to the recent top, indicates a likely move lower toward the 2009 low...


Silver and Gold rocket

Daily charts shown below for each.

Silver has just touched a trend line drawn from at least 5 other separate touches over the past year. Does the latest touch indicate a likely near term reversal?


Gold, to my eye, is now in its blow-off phase. There is no sign yet that Gold has topped, but when tops do form following a blow-off, the initial decline is often spectacular. The top may not form for many months, or it may form next week, we will have to wait and see...


EUR/USD weekly trend is up, is the daily chart showing a range, or triangle?

In recent posts I have commented that the EUR/USD daily chart is showing a triangle. Although I didn't spell it out, the symetrical triangle indicates equal likelihoods for either a new up trend or new down trend developing. Here is an up to date daily chart showing the triangle...


In the spirit of not wanting to become welded on to a particular view, today I decided to step back up to weekly chart level.

The weekly chart shows an up trend...


Next we go back to the daily chart. Due to up trend at weekly chart level, it is more likely than not that a new up trend will develop on the daily chart. While the triangle shown above is one option, another is the corrective trend channel shown below...


In either case, triangle or trading range, a break above last week's high should lead to a new up trend. Alternately, a move lower in coming days would put me in a position of confusion, and as a trader would keep me on the sideline, watching, and waiting.

AUD/USD hesitates, no clear near term trend

My most recent AUD/USD post proclaimed that the Aussie was head back toward parity. Market action leading in to the end of the week forced me to re-evaluate.

I remained confident of a plunge toward parity so long as the market remained below the parallel trend line on the hourly chart. However the up to date hourly chart shows that the market broke upward through that line on Friday, ending the validity of my near-term bearish stance...


How do I re-evaluate? I zoom out to larger degree of trend charts, in this case, all the way to the weekly chart.

The weekly candlestick chart shows that the AUD/USD closed last week's trading almost unchanged from where it opened trading the previous week. I don't think the near term trend will be clear until the market breaks either the high of last week, or the low of the week before, though perhaps aggressive bears may have their interest sparked by a break of last week's lows rather than the previous week's.


The moral of the story is, I am uncertain about the near term direction of this market. It is irrelevant whether that is due to the AUD/USD being a genuinely trendless market, or simply my perception making it appear a trendless market. I shouldn't trade this market until I find an edge that I have confidence in.