Wednesday, 2 December 2015

ASX 200 rallying toward cluster of resistance around 5400?

Start with the big picture, always. Monthly chart. Nobody knows if my wave count and scenario will prove correct, but  I have seen nothing to suggest that it is wrong, So I will stick with it, unless the market tells me not to. Charts include all sessions trade.

Weekly chart next. While the market is below the red 40 week moving average, a cascade decline such as 2008 is possible. That moving average is my line in the sand for the near term bearish case. It's currently just below 5500.

Daily chart shows the market is perhaps pushing through short term trend line resistance, but is near stronger trend line resistance around the 5400-5450 zone. The market must beat the illustrated trend lines before it can have a crack at the 40 week moving average. I would not be holding my breath waiting for that outcome, but I've been surprised before, many times. Markets do that. Let's see.

S&P 500 testing LT trend channel resistance, also near cluster of ST resistance

Weekly chart shows the S&P 500 testing trend channel resistance. Charts include all sessions trade.

Daily chart shows the market is near a cluster of trend line resistance, not to mention the November high. Given the weekly chart, can it stretch much higher than current levels?

Hang Seng rolling over from trend line resistance toward 60% decline

Weekly chart shows the Hang Seng rolling over lower from trend line resistance, with the most likely Elliott Wave count calling for a 60% decline from current levels, more or less. Charts include all sessions trade.

Next chart zooms in a little on the weekly, for clarity's sake.

Three indications that Gold is beginning a significant rally

Weekly chart shows Gold currently trading at the lower line of a down trend channel that began in 2011, and that Gold has recently poked below that line. From here, Gold must either push decisively below the trend channel and cascade lower, or rally back inside the trend channel, opening the door to a move up to at least the mid channel lines around 1250. I favour the latter, bullish, scenario, and that the rally has already begun. Why? Let's zoom in and see.

Daily chart gives us two indications that Gold could have bottomed and is beginning to rally. MACD has crossed bullishly at oversold levels, and RSI is rallying out of oversold levels. Both these signals also accompanied lows in March and July.

Hourly chart gives us a third indication that Gold's trend has turned up. 5 waves up is the impulsive building block of an up trend. 5 waves up on the hourly is only a very small building block, but given the market's position on the weekly chart and the indications on the daily chart, I'm watching for this 5 waves up to be the first of many in coming months. Let's see.