Thursday, 8 August 2013

S&P 500 grinding higher against trend line resistance, setting up for blow off?

The S&P 500 continues to grind higher against trend line resistance, as shown on the following weekly chart. As a rule of thumb, the longer a market grinds against resistance, the more likely it is to burst through. So, is the S&P setting up for a final blow off top? I have discussed and illustrated that blow off potential many times previously, most recently here, so won't go over it again tonight.

AUD/USD could be in the early stages of a rally to above its 2011 peak

Greg McKenna's Tuesday Global FX Morning Call alerted to me to the AUD/USD testing long term trend channel support. What jumped out at me was a very clear Elliott Wave count, which suggests that the action from the 2011 peak has been corrective. The corrective pattern (and the term correction itself) imply that a move above the 2011 highs will be forthcoming sooner or later. A-B-C corrections often terminate at trend line support just as this one has, so the correction is possibly complete at this week's low

EUR/USD testing down trend line drawn from the 2011 and 2013 highs

Nikkei daily chart trend lines

Last night's post on the Nikkei posed the question, is it setting up for a(nother) 60%+ decline? The trend lines on the following daily chart illustrate levels that would to my eyes confirm or deny the near term bearish case. The longer term bearish case would only be negated by a move above the 22 year old down trend line illustrated last night on the monthly chart, so above 16000.