Saturday, 27 April 2013

ASX 200 rallies from support, yet to beat resistance

Weekly chart including after hours trade through to the end of the past week, illustrating that the ASX 200 has rallied from support only to arrive at strong resistance. It may yet beat that resistance, but keep an eye on potential weakness on the S&P 500.

S&P 500 shows Head and Shoulders top on hourly chart, plus potential weakness at larger degree of trend

Hourly chart shows a possible Head and Shoulders top forming. Okay it's only the hourly chart, and the trend at higher degree is certainly up. But the picture at higher degrees of trend also suggests potential resistance from multiple trend lines, so the chance for near term weakness should not be underestimated.

Daily chart shows the market must beat parallel trend line resistance to move higher. Over the years there have been many instances of trend line support and resistance at this same angle. I illustrated more such instances yesterday.

Weekly chart shows the market testing the mid line of the channel that has contained most of the action since the 2009 low.

Zooming out still further to the monthly chart, illustrates what we all know. That the market is trading near record highs. Repeating what I have said in recent weeks, I don't trust the break above the 2007 highs by the S&P 500. This may be a monumental mistake on my part, but there you go. Can't win 'em all, and there are plenty of other markets to trade, so being wrong wouldn't bother me.

I think the market remains range bound on the monthly chart. So far the market has beaten the 2007 high by less than 40 points. In my view this is not enough to give confidence in the recent breakout.

The monthly chart illustrates that in 2009 the market dropped 100 points below the low from 2002, then snapped back within the range. That 100 points was a move of just over 13%. An equivalent percentage move over the 2007 high would take the market to 1785. I think it has to beat that level to escape the potential for another snap back in to the monthly chart range. 1785 seems a long way away, given the potential for weakness illustrated above on the hourly, daily, and weekly charts.

AUD/USD range bound

Daily chart only this week. Til the market breaks out of the illustrated range, that's all I need to see.

AUD/JPY headed for test of trend channel support?

Daily chart begs the question, is the AUD/JPY headed for a test of trend channel support? Maybe, but potential support at 100 from the March highs mean we shouldn't take it for granted.

Weekly chart shows that the AUD/JPY could be topping in a multi year trend channel, so if (if) the daily chart trend line is broken to the downside, this market has a long way to fall.

GBP/USD trending higher on daily chart but lower on weekly, testing resistance

Daily chart

Weekly chart. Break lower from triangle indicates the trend is down. Now testing the upper region of the resistance zone that I have been illustrating for some time now.

EUR/USD in sweet spot ahead of strong move, could go either way, the past week's low is key

Earlier in the week I posted that the EUR/USD was in a sweet spot for further rally. Since then it has hesitated. When a market does not act bullishly in the face of multiple bullish edges, as were present this week, at the least you shouldn't be too attached to the bullish scenario. Ideally you should keep a completely open mind about what lies ahead.

The bullishly crossed moving averages on the daily chart suggest that a new up trend could be beginning, so long as this week's low holds and the market beats the past week's high soon.

The weekly chart shows that a fall below this week's low would coincide with a fall below the 40 week moving average, which has many times directly preceded a sharp decline. So the past week's low is key.

Gold trending lower unless 1600 is beaten

Weekly chart illustrates big overhead resistance below 1600. I am not saying 1600 won't be beaten (nobody knows), just that anyone who is long term bullish Gold is fighting the trend unless/until that level is beaten.

Hourly chart begs the question, false break higher?

Silver trending lower

Whether the correct scenario for Silver is a descending triangle or a down trend channel (both illustrated separately on Tuesday), either way it is trending lower.