Thursday, 28 August 2014

S&P 500 futures lower from dual trend line resistance, Dow breaks trend line support

Daily chart shows the S&P futures at 1992, down from the previous New York close of 2000, turning lower from dual trend line resistance.

Dow futures have tested the July peak and subsequently broken below trend line support.

Zooming waaaay out to the Dow monthly chart suggests that it is putting the finishing touches to a giant bearish megaphone. A decline below the 2009 low will be the next major trend for US stocks. Said decline may have begun at this week's high. Keep an eye on European and Asian markets, which are painting similarly bearish long term scenarios. I posted charts earlier today for the DAX (Germany) and Hang Seng (Hong Kong).

German DAX monthly MACDH flips -ve, daily chart trend channel suggests next leg lower beginning

As I posted earlier this month, the monthly chart MACDH on the German DAX index has flipped to negative. The three prior occurrences preceded large declines. Below is an updated monthly chart.

Daily chart shows that the market has completed a false break higher from an upwards corrective trend channel. Given the bearish big picture, this indicates that another leg lower may have begun.

Hourly chart zooms in on the corrective trend channel, and illustrates why I tweeted earlier today "German DAX looking toppy to me, upwards corrective trend channel seemingly complete...."

Hang Seng reversing from key resistance near peak of 2010, beginning 60%+ decline?

Weekly chart shows the Hang Seng reversing from key resistance near the peak of 2010.

Zooming out, the illustrated Elliott Wave count suggests that the Hang Seng could be beginning a decline to below the low of 2008 ie. a drop of greater than 60% from current levels.