Thursday, 9 May 2013

ASX 200 still wrestling parallel trend line resistance

ASX 200 weekly chart is an updated version of the one I posted on Monday. What I wrote then bears repeating "in 2010, 2011, and 2012 the market made marginal new highs in April or May, then declined powerfully, anywhere from 10% to 25%. How about 2013? We've got a marginal new high in May. The latest in the series of parallel trend lines may also be significant. Will history repeat and give us a decline from nearby current levels?"

Zooming in to the daily chart with the nearest parallel trend line illustrated shows that today the market gave the line another solid test, and could be setting up for a turn lower. If instead of turning lower now the market rallies through trend line resistance, we would likely see an acceleration of the recent rally, perhaps in to a blow off top?

S&P 500 and NASDAQ 100 both testing top lines of up trend channels

Both the S&P 500 and NASDAQ 100 are testing the top lines of up trend channels. Both may continue to ride upwards along the underside of those lines, as they have done in the past, but it is not required. They may top at any time. Alternatively, a rally through the nearby lines could signal the beginning of a blow off phase.



AUD/USD range bound or trending down? Expect lower prices unless 1.03 is beaten

AUD/USD daily chart sets the scene. The market is testing the support zone at the bottom of a nearly ten month old range. Earlier in the week it broke below the up trend line drawn from the June 2012 low, and earlier today retested that trend line from below.

Zooming in to the hourly shows two clear down trend channels. The market needs to break upwards from the larger channel to remain range bound on the daily chart. Until/unless that break happens, requiring a break above 1.03ish as I type these words, the trend is down and we should expect lower prices.

AUD/JPY again testing lower line of almost eight month old up trend channel

GBP/USD 50 Fib / last week's high still key resistance

Daily chart shows last week's high coincided with the 50% Fibo retracement of the decline from early January to mid March.

Zooming in to the hourly chart suggests a leading diagonal may be forming? ie. a five wave expanding triangle, with 4 waves complete and wave 5 down imminent. If so (we'll find out soon!) that would indicate the trend is down, against last week's high.