Thursday, 15 November 2012

ASX 200 decline accelerates

Daily chart including after hours trade. Potential resistance lies at nearby overhead trend lines and previous resistance zone around August and September highs.

S&P 500 monthly momentum and trend channel warn of immense bearish potential

For the record, let's begin with the daily chart, which shows the S&P 500 continuing to decline within a down trend channel. Any immediate further decline would take the market definitively below the trend channel and indicate an acceleration of the decline. Don't rule it out.

The monthly chart supports the view that any further immediate decline would have strongly bearish implications. Such a decline would return the S&P 500 to the area of the trend channel that has captured 90%+ of market action since 1997, opening the potential for a decline to the lower trend line ie. below the 2009 lows. Multiple bearish momentum (MACDH) divergences at recent highs warn that this market is weak and ripe for a reversal lower.

DAX sets sail

The DAX's decline in the past day has disqualified a bull flag as an option, and the nearby overhead trend line should now act as resistance if the infant down trend is to flourish. 7200 should not be beaten if the decline is to continue in the near term.

AUD/USD pushing lower through up trend lines

Whether or not you subscribe to the wedge plus Head and Shoulders scenario illustrated this morning, all but blind Freddie can see the AUD/USD pushing downward through multiple up trend lines. A push through the lowest trend line, drawn from the June and October lows, could see the AUD/USD assaulted in a manner reminiscent of the recent (ongoing) stock market mauling. From little things, big things grow, sometimes.

EUR/USD retesting recent channel and trending down

USD/JPY rallying from multi-year wedge

Haven't looked at this one for some months. Wedges are tricky buggers to trade. If the wedge is indeed complete, the measured target is a move to the level where the wedge began ie. over 120. Measured targets are all well and good, but better to take things one step at a time.

AUD/USD breaks below wedge trend line

AUD/USD has broken below the lower trend line of a rising wedge, or nearly so. Why nearly so? Depends which trend line you are working from. The following chart illustrates a Head and Shoulders scenario that Peter Brandt is tracking, within a larger symmetrical triangle. Yes, the same symmetrical triangle that I and doubtless many others have been watching for some time too. He would be short on a close below the November 9 low at 1.0359.