Saturday, 11 May 2013

ASX 200 poised to top after Friday's big false break above trend line resistance?

Is the ASX 200 poised to top after Friday's big false break above trend line resistance? The weekly chart best illustrates the trend line I am talking about. Repeating what I wrote earlier in the week "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?"

The daily chart, with the same trend line drawn, better illustrates the bearish false upside break.

S&P 500 testing upside extremity of up trend channel

Daily chart shows the S&P 500 testing the upside extremity of the illustrated trend channel. It could continue to ride the underside of the line higher, as it has done in the past, but don't take it for granted. A top could already be in.

Zooming out to the monthly chart, illustrates what we all know. The market is trading at 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 needs a move over 1785 or so to escape the gravitational pull of its long term trading range. Why 1785? 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 above the 2007 high would take the market to 1785. I think the market has to beat that level to escape the potential for another snap back in to the monthly chart range.

AUD/USD testing parity after plunging lower from ten month old trading range

Daily chart shows the AUD/USD testing parity after plunging lower from ten month old trading range. Worth noting that the measured target for the range breakout is around 0.98, arguably lower if you include intraday  extremities.

Weekly chart shows the market is still within a multi year triangle, and while the current focus is on the downside potential, the market could break in either direction. An upwards break would target 1.20 or so, while a downside break would target low 0.80s.

AUD/JPY setting up for a 20% decline?

Is the AUD/JPY setting up for a 20% decline toward the lower trend channel line?

Nobody knows. But the possibility makes the current trend line test on the daily chart seem more interesting and worth watching.

EUR/USD breaking lower through trend line support?

Daily chart shows the EUR/USD possibly breaking lower through parallel trend line support, and arguably working towards completing the right Shoulder of a bearish Head and Shoulders top.

Weekly chart shows that the market is in the area of the 40 week moving average, which often coincides with commencement of strong trends, either up or down.

GBP/USD breaking lower through key trend line support?

The daily chart shows the GBP/USD testing key trend line support, after having turned lower at the 50% retracement of the decline from earlier in the year.

Weekly chart shows that a break lower on the daily chart would likely signal a resumption of the down trend spawned from a downwards break from a multi year triangle, with a measured target below the 2009 low.

USD/JPY long term target is > 120, but hitting big resistance now at noughties lows?

The USD/JPY wedged in to a bottom over a number of years, as shown on the monthly chart. The measured target for a rally from such a wedge / ending diagonal, is the point where the wedge began, so above 120, but 102 could provide significant resistance.

Gold channeling lower on weekly chart

A break below the nearby trend lines would signal an acceleration of the down trend, while a rally through 1750ish and the upper trend line is required to signal a completed bull flag. Don't rule out either possibility.

Silver channeling lower or falling from descending triangle on weekly?

Is Silver simply channeling lower, or falling from a descending triangle? If the latter, then a break lower through the nearby down trend line is likely, and the measured target would be 1350ish.