Monday, 22 July 2013

S&P 500 launches to new record highs, targeting move to 1800?

Daily chart shows that the S&P 500 has embarked on a fierce new up trend. The futures hit new record highs in Asian trade today.

Weekly chart illustrates a bearish megaphone top. Is the S&P now beginning a run toward a test of the upper trend line, around 1800? So long as the recent steep up trend line on the daily chart is unbroken, there's a good chance that a final blow-off move has begun. 

Why final? Monthly chart supports the case that 1800 is likely in a key resistance zone. 1800 lies just beyond the illustrated resistance line at 1785, which is the level that the S&P would beat the 2007 high by the same percentage as it beat the 2002 low at the 2009 low. Until 1785-1800 or so is beaten, I am of the view that the S&P remains in a giant trading range, and will eventually be drawn back down toward the 2002 and 2009 lows.

Nikkei has the next leg down of the 23 year old bear market begun?

Monthly chart illustrates the Nikkei's 23 year old bear market. The market is currently testing a resistance zone surrounding 14500-600. Only a rally above the May high would challenge the down trend, and until/unless we see that, the trend is down.

Daily chart begs the question, has the market kissed goodbye to the trend channel, in advance of a new leg lower? A close below 14500 would suggest so, to my eyes.

Gold still trending down on daily chart, below 1300 would present a bearish edge

Gold is still trending down on the daily chart, as indicated by the direction of the 40 day simple moving average. Since 2012's peak last October, moves below that moving average have presented a profitable bearish edge. Needless to say, sooner or later the edge will stop working, but if it presents again in coming days, I certainly wouldn't be betting against it.

USD/JPY watch trend line support at today's low

If (if) the larger trend has turned lower for the Nikkei, a break below trend line support at today's low would likely mark the beginning of an extended decline. Unless/until that break happens, the near term trend remains choppily up.