Saturday, 16 February 2013

ASX 200 sluggish long term, manic short term

Weekly chart to remind you of how weak the ASX 200 is. Almost four years after the 2009 low it has barely recovered 50% of the losses from the preceding decline.

Zooming in now to the daily chart. Despite the big picture sluggishness we must respect the near term up trend. Given this weeks attempted thrust through the top line of the steep up trend channel, a possible throw-over / false break higher, don't rule out this week's move above 5000 being a bull trap.

S&P 500 thrashing around at top of wedge

Weekly chart first. Another range bound stock market, with the 2007 all time high (shown) being barely above the 2000 high. Respect the range until it is broken ie. in this case play for a turn lower.

Daily chart illustrates that thrashing around I mentioned in the title of this post. Lots of recent candles with long upper and lower shadows. Market needs to move lower from the recent trend channel very soon to keep the wedge scenario alive and suggest the wedge is complete. Til that happens, you've gotta respect the near term up trend while also respecting the proximity to resistance at the 2007 high (1575ish).

DAX breaking down on daily chart

First the weekly, for context. Not far from the 2007 high, which was very close to the highs of 2000/2001. So the DAX has been range bound for over a decade. Respect the range until it is broken ie. in this case play for a turn lower. The market is currently testing the 2011 high from above.

Daily chart now. Is the DAX showing a Head and Shoulders top with a weak right shoulder? Maybe. One thing that's not a maybe is that trend line break. If the 2011 highs give way, look out below!

Gold long and short term charts, testing trend channel support on daily

Monthly chart. Trend is up, stating the obvious.

Weekly chart. Range bound.

Daily chart. The two trend line breaks this week were great short entries, but that's history. Gold could go either way from the current trend line test. If the trend line fails to hold, we'll see a test of the 2012 low around 1530 in no time at all. Unless that trend line break occurs, the action since the October high looks like a textbook Elliott Wave double zigzag correction, indicating that a rally will start from nearby current levels, to above that October high. Current market sentiment suggests this is not a trivial possibility.

Silver long and short term charts



AUD/USD shows false upside break / throw-over from triangle, hinting at a new trend

The weekly chart of the AUD/USD shows a false upside break / throw-over from the eighteen month old triangle.

Zooming in to the daily chart shows the market re-testing the upper triangle line from below, then turning lower. The trend line retest coincided with the 18 day moving average, which often in the past has provided either support or resistance depending on the active trend. The AUD/USD has been choppy and trendless for some time, so not many expect it to launch a new trend now. If last week's high holds we may see a down trend toward the lower triangle line.

EUR/USD watch those trend lines?

Of all the markets I track on this site, EUR/USD is the one I struggle with most when trying to fit long term trend lines. Perhaps I should give up doing so and admit it's in a big trading range between 1.20ish and 1.50ish? Nah, I'll go with the parallel trend lines I've drawn below.

Zooming in to the daily chart, watch that trend line.

GBP/USD breaks lower from four year old triangle

The GBP/USD this week broke lower from a four year old triangle.

Zooming in to the daily chart shows the market trending down within a trend channel.