Saturday, 31 May 2014

ASX 200 still wresting long term trend line resistance

S&P 500 now only 1% below key long term trend line resistance

The S&P 500 appears to be headed for another test of long term trend line resistance, currently around 1840, just 1% above current levels. The bearish wedge is a devastatingly bearish setup. If it is the correct interpretation of market behaviour, then we will subsequently see a decline to the origin of the pattern (the 2009 low) or lower. In coming weeks we may see a throw over to complete the pattern, ie. a brief false break above the top line.

Gold tests trend channel support, trend is down

Daily chart shows Gold testing trend channel support, following the earlier break lower from a symmetrical triangle. The trend is down. As the saying goes, the trend is your friend, so don't fight it.

Weekly chart reinforces the view that the trend is down.

AUD/USD time to look long?

Daily chart suggests the AUD/USD has rallied from trend channel support. Some who follow me on twitter will know that I was looking short late this week. You win some, you lose some. One of the market's many challenges is that often good opportunities in one direction can morph in to good opportunities in the opposite direction. The 40 period MA is key in my trading. For now a long is pending a move through Friday's high.

Supportive of a pending bullish stance is the weekly trend. With one eye on heavy resistance about 350 pips above current levels...