Saturday, 3 November 2012

ASX 200 trending up on daily but testing long term support after hours

First a daily chart of the cash index, which closed on Friday afternoon at 4460.

The next chart includes after hours trade, which ended the week lower than the cash close, at 4442.

Zooming out to the weekly chart shows the market closed the week testing key support.Trend lines and support levels are zones rather than clearly defined points, so give the market some leeway here, but a close back below 4400 would open the way for further declines.

S&P 500 still showing two trend channel potentials

Regardless of the trend channels shown on these charts, a close below 1400 would be bearish, breaking a significant support shelf from lows in August, September and October.

First chart shows a trend channel already broken to downside.

The second shows the market still testing the lower line of another trend channel, with bullish potential so long as the recent low holds.

AUD/USD falls in to week's end

Late Friday afternoon I tweeted an hourly chart showing a potential Head and Shoulders top, which the market obligingly followed by declining in to week's end. Zooming out to the daily chart for the purposes of this post shows that the AUD/USD is range bound, and choppy, not my idea of fun to trade.

Zooming out further to the weekly chart illustrates that the market is forming a triangle. On Tuesday I posted a target for an upside break of 1.23, but as per Dartagnan's comment, will it break upwards or will it break downwards? Or morph in to something else?

EUR/USD slices lower through multiple trend lines to open substantial downside potential

Last week the EUR/USD fell lower through the trend line drawn from the July and August lows. This week it retested and fell away from that line, ending the week by slicing lower through a shorter term trend line drawn from multiple lows in September and October.

Zooming out we see that the EUR/USD is turning lower from near the top of the down trend channel that has captured more than eighteen months of trade. Now that trend line support has failed, downside potential is substantial.

Gold range bound on weekly chart

Gold is testing the zone between the 18 and 40 week moving averages. I illustrated earlier in the week that several times in the past decade tests of these moving averages have kicked off a new rally. That said, beware range bound markets. Only a break from the range, be it up or down, would give full confidence of trend direction.

Silver range bound on weekly chart