Friday, 31 May 2013

RUT's sixth hit and GOLD

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I expressed my concern about the 6th hit in yesterday's post. It happened on RUT today and it is breaking down. I expect a declining channel forming down to 925-940 area.
On gold, the channels I marked from my previous gold post here are still in charge. Since then another blue rising channel has formed. I have doubts that it will hit the upper band of the blue channel once more because we have strong resistance from the orange one. Even if it finally breaks it upwards, the upper band of the orange channel will be very strong and I think the decline will resume with strength from there on. Hope it helps.

Thursday, 30 May 2013

Euro looking for direction

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I haven't been posting on Euro because the charts didn't tell me much. It has been a choppy market the last 2 months but this may change very soon. Today we are at an important junction which will make it or break it. I showed it with a green ellipse where two channel resistances have crossed. This may be a good shorting point with a very tight stop loss. Hope it helps.

RUT may give in very soon

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I haven't been posting on RUT for a while. Maybe this extended rise wore me off and I was concentrating on other stuff. However, today's chart is showing some weakness and we may decline some 30 points from here. I'm expecting the green channel to break down very soon. The lower band was hit 4 times shown in blue ellipses and the fifth one is on its way. My own experience says; when the channels withstand the fourth touch they break on the sixth not the fifth. No matter what, I would wait for this channel to break before I take any short positions.

Tuesday, 28 May 2013

AUDUSD brewing opportunity

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There is a very mature and well-established declining blue channel on AUDUSD with clear upper and lower bands. Breaking this channel upwards will present a good long opportunity with clear stop loss levels. I also showed two different support levels; the red one from June 2012 and the green one from October 2011. They may play a crucial role to end this declining channel. I showed two different scenarios just to make a shot but I wouldn't take a long position until this channel is broken. I will keep a close eye on it and keep you posted frequently. Hope it helps.

Monday, 27 May 2013

GBPUSD update

The green declining channel from my previous post here is a good guideline to see what GBP is doing right now. The correction to the area shown with the last red ellipse may be over and the decline should resume. 
Taking a closer look, I can see a potential declining channel in blue. This looks like a stretch because it needs a hit & bounce on the upper band first for confirmation but looking at it together with the green channel, this may be the route downwards. Hope it helps.

Friday, 24 May 2013

S&P500 update

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The timing of the recent drop after the QE news was very suspicious. It came right at the top of the green channel which was the fourth hit. The fourth touches are always a reason to be cautious. The final downturns at resistances and support breaks very often happen at the fourth hit. This green channel support break was not ideal because it broke down at the third hit. I was expecting one final push towards 1700 but the response to the negative news was very overwhelming. Will it still reach 1700? We will see, but first it has to break the resistance of the orange channel which I showed inside the red ellipse. That resistance was already tested once since yesterday. If that resistance is broken upwards, I would be very careful with shorts. Otherwise, I expect another hit at the lower band of the orange channel which will be the 4th hit! Hope it helps.

Thursday, 23 May 2013

Gold looking for direction

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This is a short update on gold. The long term chart can be found in my previous post on gold here. Looking at the short term trend, the green channel seems to be in charge but the upper resistance has been hit 3 times already. The fourth touches are always alarming and this may happen very soon. Unless this channel is broken upwards, the first target is 1320 which is the lower band. If broken, the orange channel is the one to watch closely.

Wednesday, 22 May 2013

S&P500 update

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Both long and short term charts speak for themselves. We are very close to the golden touch on the 4 year rising blue channel. The green channel in the second chart looks like the guiding path for the hit.

Tuesday, 21 May 2013

GBP and AUD update

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The declining green channel which I showed in my previous post is still in charge. The consolidation is happening with positive divergence on the RSI. There is a good chance of a rise around 1.53 area to neutralise that oversold condition. If it touches the next upper resistance, i.e. the second green line from the top, it is a good place to go short. The ultimate target of this very wide green channel is 1.40-1.42 area depending on how the waves unwind going down the way.
On AUDUSD, the triangle I showed in my previous post was not a triangle. I do not consider it as a triangle because there wasn't any support on the third hit. A third hit & bounce is a must to consider the lines as channels, supports and resistances. My anticipation of a bounce from here due to the large blue channel is still there, much reduced due to the triangle failure though. Of course I do not expect to hit the blue channel's upper band but a strong rally wouldn't be surprising from here.
Short term, AUD is in a very steep declining green channel and looks quite oversold. Unless the channel breaks upwards, the decline may accelerate which would dash my rally hopes completely. Hope it helps.

Monday, 20 May 2013

Gold channels delivering

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The long term red declining channel is confirmed with the third touch and bounce today. The strength of the bounce is remarkable. It is breaking up the declining green channel in the short term chart without any pullbacks as I write this post. Next stop is the orange channel resistance. The direction is down, so any touch on the orange channel is a reason to short. Hope it helps.

Sunday, 19 May 2013

Start of the week: SP500, DOW30 and GOLD

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S&P500 weekly chart shows the 4 year perfect blue channel and recent action proves that the market "wants" to hit that upper band once more which would be the 4th touch. The extreme overbought condition which resembles the top in 2011 will be a big resistance against this breathless rise. 
The short term picture is perhaps a guide to us to see how we may reach 1700. Now that the orange channel is broken upwards, the green channel is in charge but even that one's upper band is hit right now. We may consolidate to hit the lower band of the green channel to take us up to 1700 to make the golden hit on the blue channel.
The 4 year perfect channel in red on DOW30 indicates that another hit on the upper band is in the picture now. It looks massively overbought in RSI similar to 2011 top from where prices turned down and corrected by as much as 20%. However, I think we are very much in an euphoric period where any price looks cheap to the masses. It wouldn't shock anyone anymore, if it goes up another 1000 points from here. 
Looking at the short term picture, the green channel is not a perfect one due to the blue circled area which was a news related action. However, the upper band hits shown by green arrows tell that this channel can be taken seriously. The fourth hit is just around the corner and it may well turn down from there to hit the lower band which will be a good spot to go long again.
The charts on gold are quite clear from every point of view. The 2 year chart shows the blue larger down trend which will be hit very soon again. The green steeper channel shows the last leg of the decline and I think this one will be in charge for quite a while. Another hit on the upper band would be a great selling opportunity.
The short term chart on gold shows how the recent correction played out within the recent large decline. The rising red channel, the blue channel within the topping action, which for a while looked like a bull flag, and now  the decline in the green channel are very clear signs that lower prices are here to stay. Also note that on all 3 channels the reference point is the top shown in orange ellipse. No matter what the gold bugs scream at you, the prices say the last word. Hope it helps.

Friday, 17 May 2013

S&P500 update

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It's been a while since I posted on S&P. The worst news for the bears is the red channel which has been broken upwards rathen than down. The upper resistance band after this break was tested twice which I showed within the ellipse. Unless the prices do not go back into the red channel the green channel is in charge here. The upper resistance of that channel was also hit 4 times. Still no good news for the bears unless both of these channels are broken down. Hope it helps.


Thursday, 16 May 2013

GBP's journey

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Since my last post on GBP, it turned up around 1.52 which I showed as an intermediate stop on the way down with red ellipses. It may rally up to 1.53-1.5350 up to the green rectangle. Once it resumes the decline I expect the green intermediate resistance to be broken and this will open prices much lower than here. The ultimate target would be 1.43-1.44 as I can see via the larger green channel.


Tuesday, 14 May 2013

Nasdaq composite flying above and beyond

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The last push on Nasdaq Composite has gone above and beyond my expectations so far. What surprises me is the weekly chart below. The red support was broken in October 2012 and tested 4 times during this push since November. I thought it is time to say goodbye to that resistance, turn down and never hit it again. But no, it kept its pace and now broken that resistance up.

The only chance for the bears here is the green resistance to hold which is around 3467 today, of course rising every day until it is hit. Above that, is unchartered territory and I can't see any clear resistances. Hope it helps.

Monday, 13 May 2013

Gold, GBP and AUD updates

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Since my previous post on gold in the weekend, it looks like the blue channel is in charge here for a while. Unless this channel is broken downwards, I expect a jump from the lower band towards all the way to the upper. To me it still looks like a bull flag. Although many call lower prices on gold, I wouldn't sell it unless it goes below 1410.

British pound broke down the red channel, which should take us all the way down 1.42 levels by looking at the larger green declining channel. Surely, there will be interruptions on the way down and the levels marked by the ellipses show a potential resistance around 1.52-1.5250. I expect a consolidation there, maybe a rally up to 1.5350, but resuming declining action afterwards. 

My boldest call is perhaps on the Australian dollar which is very close to a major support for two reasons. The weekly chart that shows the 5 year channel on logarithmic scale indicates a potential orange triangle support and the blue channel support. The prices are getting oversold so this area should be closely watched for a major move higher. I'm calling for dollar strength on the british pound but australian dollar has a bullish picture against the dollar on the technical picture which cannot be ignored. If the triangle delivers and the prices break free the triangle, the target is 1.15. A very long shot but it is a possibility. The daily chart shows the support area clearly. Hope it helps.

Saturday, 11 May 2013

Gold weekend update

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Following yesterday's post gold rallied from 1421 and showed no sign of stopping at the red channel support I showed with the red oval. The fact that red channel played no role here was kind of fishy. Well, this is the thing with channels. You have to look into all options before drawing conclusions. Apparently, the blue channel was in charge yesterday which may turn to a bull flag but it needs to hit the upper band for the third time for this option to become a possibility.

On the longer term chart, we can see why gold couldn't go too far within the green rising channel above. It tested the orange resistance maybe 6 times before the recent drop. This doesn't mean it can't. If the blue channel above turns out to be a bull flag, the consolidation may well give gold the opportunity to take a breath before breaking that resistance the next time. Hope it helps.

Friday, 10 May 2013

Gold broken

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The red rectangle consolidation in my previous gold post  just broke down after two weeks of sideways action. There has been several tests of the upper and lower band and 2 false breakouts which were possible to confirm with the green rising channel. In both cases, the green channel's support and resistances avoided a complete breakout. Considering the width of the rectangle the first target of this move should be around 1400. It will be very oversold when it reaches there so it may jump to test the rectangle bottom edge after that before resuming its down slide. 

Thursday, 9 May 2013

The mighty DOW

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All bears are exhausted from trying to call the tops. All bulls are exhausted (ok maybe less than bears) from thinking of when to get out. DOW has been the worst bear hunter of all but even DOW can fall for a while. The perfect red channel is showing a resistance was hit just today. I showed many points of this middle line playing support and resistance in the last 4 years and this one may play out too. For this resistance to hold, the prices should not go much beyond 15140. The negative divergence on RSI is remarkable on daily and weekly charts. 

Wednesday, 8 May 2013

Range bound gold

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The rising green channel on gold was broken last week but the drop in prices were not as severe as I was expecting. This sideways channel looks more like a rectangle which may take us to 1520 levels if broken upwards. The red sideways channel should be watched closely. It would give good stop loss control once it is broken regardless of the direction. 

Tuesday, 7 May 2013

Dollar index

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Now that dollar index made a lower low, a declining green channel has also formed. The hypothetical blue rising channel seems to be playing a role at the moment but it needs a higher high and a touch on the upper band for confirmation. The ruling red channel dictates for the long term view and if the equities end their breathless run, it would strengthen the dollar to reach the upper band of that channel with a target of 87-90 area. P.S. The chart is on logarithmic scale.
Hope it helps.

Update on Coffee

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My favorite soft commodity is still coffee. Since  breaking the 2-year declining red channel, it has retested it twice in the last 2 weeks.

The closer view shows the very strong green resistance which held countless number of tests in the last months. Now prices are moving away from both the red channel and the green resistance which is a sign that a new trend is forming. More importantly, the last time it made a low on 26.04.13 it wasn't a lower low. Than the prices jumped to 144.4 which was a higher high that hasn't happened for quite a while. We are now hovering around 144 area again. I believe it will go for another higher high soon which will confirm the new trend.

Last but not least, the 10 year blue support is another sign that coffee will get expensive very soon.


Friday, 3 May 2013

Auch... any bears?

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S&P smashed through the broken blue support and the orange channel which was apparently a bull flag. Now it stands at the cross section of two different resistances, the green and red channel, which indicates 1620 as a major resistance level. There is not a single bear left in the entire world today.

The news related action on Euro gave false alarms for the bears. There is still a chance for them if it breaks down the 1.3050 level.

Thursday, 2 May 2013

Last breath of the bull

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Euro, Sterling, Dollar index and Gold

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Euro gave in before reaching the target. It formed a rising orange channel but couldn't reach the 1.33 target and broke the channel on the 4th touch as usual. Below 1.3050 will break the green rising channel and the momentum looks quite strong to break it. 

The clear picture in GBP was causing some worries about my Euro prediction. Well, it turned out right. GBP took down Euro with him. The red channel in GBP is very strong and accurate. That's the main reason I like GBP for channels. The first target is around 1.54 but if the red channel is broken it will go much faster towards 1.40-1.45 I think.

Another worry for me was the blue potential channel I posted on the dollar index which also delivered towards the Euro weakness. Of course this channel needs confirmation with a higher high yet.

Gold turned at 1440 at the bottom of the green channel and also formed a bull flag which is shown in red. However, it needs to break this bull flag to reach around 1500 levels. Below 1452 it is a good short which would resume the downfall of the PM.


Wednesday, 1 May 2013

Euro and Sterling still strong

No comments :
Euro made the move I've been expecting and there are no major resistance levels until 1.3305. I will watch the strength during this climb before taking any decision to sell or hold. 

The picture on GBP is clearer. It reached the upper band of the red channel and there is a support line underneath this climb which I showed with orange. It may continue its climb although it looks overbought and shows a clear negative divergence. If it breaks down the support line, the target would be 200pips below these levels. Will it make it or break it? We will see very soon. Hope it helps.