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“NEVER BEFORE HAVE YOU HAVE SEEN THIS PERFECTION OF CHART ANALYSIS“
As expected, Dow Jones and S&P 500 have been started to fall down. Let’s start by looking Nifty future…, Yes we are waiting for long “Expected time is 2-3day for long” Click here.
Yes, You can short-sell Nifty for 5928-5947 small points.
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Moving Avg-Exponential Indicator:
Conventional Interpretation: Price is above the moving average so the trend is up.
Trend: Market trend is UP.
Mov Avg 3 lines Indicator:
Note: In evaluating the short term, plot1 represents the fast moving average, and plot2 is the slow moving average. For the longer term analysis, plot2 is the fast moving average and plot3 is the slow moving average
Conventional Interpretation – Short Term: The market is bullish because the fast moving average is above the slow moving average.
Additional Analysis – Short Term: The market is EXTREMELY BULLISH. Everything in this indicator is pointing to higher prices: the fast average is above the slow average; the fast average is on an upward slope from the previous bar; the slow average is on an upward slope from the previous bar; and price is above the fast average and the slow average.
Conventional Interpretation – Long Term: The market is bullish because the fast moving average is above the slow moving average.
Additional Analysis – Long Term: The market is EXTREMELY BULLISH. Everything in this indicator is pointing to higher prices: the fast average is above the slow average; the fast average is on an upward slope from the previous bar; the slow average is on an upward slope from the previous bar; and price is above the fast average and the slow average.
Bollinger Bands Indicator:
Conventional Interpretation: The Bollinger Bands are indicating an overbought market. An overbought reading occurs when the close is nearer to the top band than the bottom band.
Additional Analysis: The market appears overbought, but may continue to become more overbought before reversing. Given that we closed at a 45 bar new high, the chance for further bullish momentum is greatly increased. Look for some price weakness before taking any bearish positions based on this indicator.
Volatility Indicator: Volatility is in a downtrend based on a 9 bar moving average.
Momentum Indicator:
Conventional Interpretation: Momentum (1000.11) is above zero, indicating an overbought market.
Additional Analysis: The long term trend, based on a 45 bar moving average, is UP. The short term trend, based on a 9 bar moving average, is UP. Momentum is indicating an overbought market, and appears to be slowing. A modest downturn is possible here.
Rate of change Indicator:
Conventional Interpretation: Rate of Change (7.69) is above zero, indicating an overbought market.
Additional Analysis: The long term trend, based on a 45 bar moving average, is UP. The short term trend, based on a 9 bar moving average, is UP. Rate of Change is indicating an overbought market, and appears to be slowing. A modest downturn is possible here.
Comm Channel Index Indicator:
Conventional Interpretation: CCI (170.27) recently crossed above the buy line into bullish territory, and is currently long. This long position should be liquidated when the CCI crosses back into the neutral center region.
Additional Analysis: CCI often misses the early part of a new move because of the large amount of time spent out of the market in the neutral region. Initiating signals when CCI crosses zero, rather than waiting for CCI to cross out of the neutral region can often help overcome this. Given this interpretation, CCI (170.27) is currently long. The current long position position will be reversed when the CCI crosses below zero. Adding bullish pressure the market just reached a 45 bar new high.
RSI Indicator:
Conventional Interpretation: RSI is in neutral territory. (RSI is at 66.70). This indicator issues buy signals when the RSI line dips below the bottom line into the oversold zone; a sell signal is generated when the RSI rises above the top line into the overbought zone.
Additional Analysis: RSI is somewhat overbought (RSI is at 66.70), but given the 45 bar new high here, greater overbought levels are likely.
MACD Indicator:
Conventional Interpretation: MACD is in bullish territory, but has not issued a signal here. MACD generates a signal when the FastMA crosses above or below the SlowMA.
Additional Analysis: The long term trend, based on a 45 bar moving average, is UP. The short term trend, based on a 9 bar moving average, is UP. MACD is in bullish territory. And, the market just put in a 45 bar new high here. Look for more new highs.
Open Interest Indicator: No open interest value in the database for this bar. Note: Open interest not available for all data types.
Volume Indicator:
Conventional Interpretation: The current new high is not accompanied by increasing volume, suggesting that the current move lacks broad participation. Look for a retracement soon.
Additional Analysis: The long term market trend, based on a 45 bar moving average, is UP. The short term market trend, based on a 5 bar moving average, is UP.The current new high is not accompanied by increasing volume, suggesting that the current move lacks broad participation and the market may be overbought. A retracement is possible here.
Stochastic – Fast Indicator:
Conventional Interpretation: The stochastic is in overbought territory (SlowK is at 96.91); this indicates a possible market drop is coming.
Additional Analysis: The long term trend is UP. The short term trend is UP. Even though the stochastic is signaling that the market is overbought, don’t be fooled looking for a top here because of this indicator. The stochastic indicator is only good at picking tops in a Bear Market (in which we are not). Exit long position only if some other indicator tells you to.
Stochastic – Slow Indicator:
Conventional Interpretation: The stochastic is in overbought territory (SlowK is at 94.33); this indicates a possible market drop is coming.
Additional Analysis: The long term trend is UP. The short term trend is UP. Even though the stochastic is signaling that the market is overbought, don’t be fooled looking for a top here because of this indicator. The stochastic indicator is only good at picking tops in a Bear Market (in which we are not). Exit long position only if some other indicator tells you to.
Swing Index Indicator:
Conventional Interpretation: The swing index is most often used to identify bars where the market is likely to change direction. A signal is generated when the swing index crosses zero. No signal has been generated here.
Additional Analysis: No additional interpretation.
Important: This commentary is designed solely as a training tool for the understanding of technical analysis of the financial markets. It is not designed to provide any investment or other professional advice.
Japan is following in the footsteps of the man who laid the groundwork for the greatest global inflationary operation of the modern era. We see the Yen in the top panel of the chart below forming a similar pattern to that which USD made from 2000 to 2002 as an epic bubble in credit expansion was being fomented in the US.
The similarity in the charts (with a decade stagger) is striking and it is probably no coincidence that Japan has chosen to leverage its currency – which had been chronically strong since the 2007 beginnings of the US-triggered global financial meltdown – just as the US did with the once strong ‘King’ dollar in and around 2001.
The first week of the month is always the most interesting, with global purchasing managers indexes, U.S. ISM’s, and employment data released. Overnight we see continued weakness in Europe’s economic data and perhaps some more “green shoots” in China. Europe is sporting “beige shoots” at it is reaching the stage where things are so bad it is difficult to go down further.
China seems to be “recovering” not due to the private sector, but government led:
As for the U.S. we have ISM Manufacturing this morning at 10 AM; consensus for 51.7 – flat with last month. Construction spending also hits at 10 AM – expectation 0.4% growth.
Wednesday ADP employment which hopefully with some recent changes is “somewhat” closer to government data on a month-to-month data (before revisions) – expectations of 125K versus 158K. Sandy should be an issue. ISM Non Manufacturing, expectations of a drop to 53.6 versus 54.2.
Friday is the much watched (Jack Welch) employment report – expectations of only 80K versus last month’s 171K, again Sandy impacts here. Unemployment rate expected up to 8.0% versus 7.9%.
As for the technical picture, we have a gap up this morning on any myriad of “positive” news items – China PMI (despite China stock market falling yet again), European PMI not getting worse (European markets acting WELL), or Spain asking for bailout funds for its banks (no surprise, but algos read the headline and futures popped). Evidence continues to mount for a continuation of an inverse “head and shoulders” bottom move; if this continues there should be a move to the mid 143os to upper 1440s (depending on what you use for the head and neckline – up for some interpretation). Now if that happens this would create the first “higher high” in the S&P 500 since the correction began in mid-September, but if that is all the move has in it would be a particularly nasty spot to reverse since everyone would say “a new high” and the trend is changed. But we’ll see – this market has become famous since 2009 for “V shaped” moves that continue in one direction (not the boy band) without relent so the talk of “performance chasing” and “underinvested longs” and “repeatedly scarred shorts” should be relentless over S&P 1435.
At the time I write this the S&P 500 is gapping up to the 61.8% retrace of the entire two month correction. As posted Friday, the ability for the market to move sideways to consolidate gains was a positive – so the corrections in this move up have come mostly via time rather than price.
Nov 20, 2012
On its way down from 168, GLD broke its first support level and came to rest on the second (200-DMA) from which it had a bounce. Last week, I suggested that it might find some resistance on the small horizontal red trend line, which it has, and which caused it to pull back three points. It’s difficult to see how it could have much more of a decline right away if the market is going to have a mid-correction rally, so we can probably expect the near-term trend to turn up again, perhaps reaching the top channel line (blue) before rolling over again.
If GLD does not have much of a rally from here – especially if the market does rally – it will be an indication that some decent weakness can be expected into the cycle low. In any case, subsequent action should form a P&F pattern which will help us determine the extent of the decline into the 25-wk cycle low.
UUP normally goes against equities and gold. The index appears to be extended short-term and eady to pull-back. This can be seen in the indicators, one of which is very overbought and the other beginning to show some negative divergence. If a short-term top is forming, this should help the market to find a short-term low.
