2008-12-12 Market Watch: weekly analysis

Here is the last weekly analysis.  After reaching a short-term top, the market pulled back a little bit.  Although the primary trend is still up, it is prudent to watch how it goes in the next week and act accordingly.

Overview of World Markets and Sectors

On the world market weekly chart, we can see that the market has been calmed down a bit from the fast dropping during the past several months.  At the moment, it is still too early to say if this is a bottom in the intermediate term or not.  The emerging market had been dropping down very sharply, now it looks better.

Comparison between US market and Asian markets: SPX looks like a rising wedge, rejected by 50-day moving average.  Japan market is still lower high.  Mainland China market is sitting on the trend line.  Hong Kong seems in better shape. 
 

The left chart shows the MSCI World/EAFE/Emerging Market, Shanghai Stock Exchange Composite Index, Hang Seng Index, and Nikkei 225 index.
 

Major indices, commodities, and US dollar are shown in the left chart.  With the dropping of US dollar, commodities start to bounce back up.
 

Sector overview chart.

SPX

Wave counting on the daily chart: wave C of 4 isn't completed yet.  We should be able to see 900+ to have a better entry point for mid-term short positions.

(overview) (close up)

Check the P&F chart for the resistance and support.  Downside support: 820.  Upside resistance: 915-920, then 950-955.

On this 60-min chart, it is very possible that SPX will make a faked breakout.  But reaching 950 seems unlikely in the short term.

XLF and SKF

XLF: last breakout was failed.  Although the up trend is intact, the level of 13.0 is still a short.

SKF: wait for the next long entry below 120.  If it drops further on Monday, buy at market close and Tuesday market open.

Forex

USD/CAD: target is 1.15.

USD/SGD: same trend as others.  Rebound after deep oversold.

USD/JPY: the primary trend of Yen is up.  In the short term it may bounce back up further to go back to the original descending channel.  However touching the upper edge seems impossible.  This means the stock market won't improve in the near future.

(weekly) (bi-hourly)

EUR/USD: the target is approaching.

Commodities

Gold: no update.  See the chart on the Oct 31st weekly analysis.

Crude oil (continuous adjusted)

The following chart [left] shows the adjusted crude oil price since 1983.

Matthew's charts

VIX long term chart: buy signal.

INDU - weekly long term: positive. bottom in place.  buy.

Dow daily TRIX: buy signal.

SPX LT Stochastics: bottomed out. buy.

S&P 500 Projection: wave 3 finished.  Bottomed out.

S&P500 trend chart:

SPX daily TRIX: buy signal.

NASI 1 year: buy signal.

$CRX - Commoditiy Related Equity Index: oversold but no buy signal yet.

SSO system: buy.

SDS system: short.

Index All: short term down.

Dow 60-min: rising wedge.  Bearish.

put,call and put,call 10 day

SPX 15: resistance.  May fall down at market open.

USD monthly: down.

2008-12-11 Market Watch

SPX: very like the wave C is over prematurely.  There is no clear sign on the SPX daily chart (left).  On the hourly chart, it seems SPX could have one more rally.  However on the intraday chart of index futures it looks obvious, and the wave might need to be recounted.  Note what I said yesterday: Keep an eye on 870, if SPX breaks down with heavy volume, chase the UltralShort.

(SPX daily) (SPX hourly)

ES: see why I was bearish in the afternoon...On the 5-min chart, 885 was tested several times and bulls really defended it well.  Today the volume was quite light until -- check the 1-min chart A -- ES broke 885 and the volume bar hiked.  Note that during 2 minutes the two volume bars were huge as well, this indicates that short covering failed to push the price higher, in turn it means investors who held long positions were trying to get out and there was not really any bottom-fishers. Now check out the hourly chart, the second support was broken without any struggling.  Now the only significant support below the current level is around 817.  Note that this analysis was done around the lunch time not in the evening.

(5-min) (1-min A) (1-min B) (hourly)

Here is the MHP analysis based on up/down channels.

USD/JPY: new low, very bearish.

SKF: the signal on the chart turned out to be accurate.  I definitely closed the long position too early although it was a wrong order.  However according to DT rule, breakout at 120 was a good buy.

(hourly) (5-min)

2008-12-10 Market Watch

SPX: still in wave C of 4 but it is hard to say whether or not this sub-wave is finished.  Note that the Fibonacci levels are subtle, so is the current level of the market.  It seems directionless but the potential breakout could be violent.  If it breaks the Monday high, 1000+ can expected; on the other hand if it reverses a new low could be seen in the near future.  Keep an eye on 870, if SPX breaks down with heavy volume, chase the UltralShort.  I guess the odd is at the upside.

(daily) (60-min) ($INDU 15-min)

USD/JPY: still bearish.  Again, watch the resistance level.

SKF: the buy signal seems still there but a new wave down should have started.  I expected 90-100 at least.

2008-12-09 Market Watch

SPX: pullback is well expected as mentioned yesterday.  From the INDU 15-min chart it seems the correction is not over yet, and the market may take one or two days on either further pullback or consolidation before the volume picking up and continuing wave C.

(daily) (60-min)  ($INDU 15-min)

USD/JPY: watch the resistance and see how it plays out.  Still bearish.

SKF: at the time being I am trading against the trend.  But today the signal is in place.

2008-12-08 Market Watch

SPX: it is no doubt that wave C of 4 is unfolding.  From the futures and intraday volume of INDU, it seems the market was in a selling mode today.  Some technical indicators are overbought.  So a pullback is due tomorrow or the next day.

(inverse chart) (daily chart) (60-min)

USD/JPY: short-term trend reversed.  bearish.

SKF: today should be an good entry.  Tomorrow market open should be another chance.