Saturday, 22 November 2014

ASX 200 trend is unequivocally down

It's been kinda tiring remaining bearish the ASX 200 from its peak back in August, while US indexes have been making fresh record highs, but the charting evidence shows unequivocally that the ASX 200 trend is down. Even allowing for increasing influence from China on Australian economic health, I doubt that the ASX 200 can diverge from the S&P 500 indefinitely, so it will pay to watch for signs that their trends are converging ie. that either US stocks are topping, or that Aussie stocks are bottoming. You can view my latest charts for US indexes here.

4 hour chart of the ASX 200 includes after hours trade and shows the market clearly trending down, with the down trend line around 5400.

Zooming out to the daily chart shows that the area around 5400 is also important at this timeframe, as it coincides with multiple lows from mid-year, which may now act as resistance.

Weekly chart shows the up trend from mid 2012 is finished, and the imminent bearish triple moving average cross is a strong bearish trading edge, so long as the market stays below the moving averages, currently between 5450 and 5470.

Monthly chart shows the Elliott Wave count for the bearish big picture scenario that will remain favoured so long as the weekly chart trend follows through on the current setup. Big week coming up!

S&P 500 sold off from the open on Friday, false upside breaks for Dow and NASDAQ 100

Daily chart of the S&P 500 futures shows a big upside breakout. However it's worth looking at more than just this chart to gauge the health of the US stock market's seemingly invincible rally.

Intraday chart of the cash market for the past week shows that the S&P 500 gapped up on Friday then was sold relentlessly for almost the entire day. A sign of an exhausted rally, at least in the short term?

Weekly chart shows that the S&P again tested long term trend line resistance, coinciding with Friday's high and with the beginning of the intraday sell off.

It's worth also looking at other US indexes. The Dow futures look to have set up a bearish false upside break.

The NASDAQ 100 futures also look to have set up a bearish false upside break.

Hang Seng rallies to test resistance at underside of recent up trend channel

Daily chart including futures shows the Hang Seng rallying to test the underside of the recent up trend channel.

Weekly chart Elliott Wave count illustrates the bearish big picture scenario, still certainly on the cards. A break above this week's high, some 1000 points above where the futures closed the week, would weaken the bearish case. It would be surprising to see such a rally, but anything is possible.

DAX rally is stretched, nearing key resistance around 9800

4 hour chart futures shows the DAX rally looking stretched, testing trend channel resistance.

Daily chart shows that further rally may encounter resistance around 9800, a level coinciding with multiple short term peaks from earlier this year, and also the down trend line drawn from highs in July and September.

Weekly shows that despite choppy action for the entirety of 2014 so far, the long term trend is up. But is a new down trend beginning? Perhaps, so long as 9800 is not decisively beaten.