28/12/2011

2 hour trend now down for DOW and SP500


All up trends are still in place and the indexes are moving slightly higher and higher

The U.S. indexes are strongest and there is today and two more days to month end.
I am looking for any sort of weakness in the charts but the daily up trends are very strong so far. The European indexes big picture is much weaker than the Americans.
Here is a chart of DAX that shows weekly movements during 2011 in a special angel. DAX has fallen 23 percent from high until now.
Every black bar is one week. The trend is locked in a triangle. The trend will break out of this triangle during January I think and I do not know if the break will go on upside or downside now but I will find out before it happens. The triangle out look tells me that the break out will be powerful and set the new trend for European indexes.


24/12/2011

Dow takes a new daily and weekly closing highs Friday

The trading was slow and sideways in New York when a very strong unexpected rally started for the last 18 minutes of the session. This sudden intervention took the Dow very close to a 5 months high and the close came in just a little bit below the high at 12.288. The coming week is often quiet but with just a few participants all chart points counts.
All long and short trends but the monthly are up and looks healthy and strong now.
If the Dow closes the year above 12.564.5 the monthly trend will turn up as well.

Remember that the the first week of the new year always is very powerful so be prepared for January 2.

Below is an article from Marketwatch.



U.S. stocks look to keep holiday rise alive - MarketWatch

http://www.marketwatch.com/story/us-stocks-look-to-keep-holiday-rise-alive-2011-12-24?link=MW_Nav_MA


23/12/2011

DOW and SP500 open in Asia with a gap which will force Europe to jump start.

Dow closed Thursday at 12.171.8 and opened at 12.233.3 in Asia, currently holding that level. Dow's high is 12.297.9 which can easily be taken out Friday. If that happens the monthly and weekly downtrends could be changed for the DOW.

SP500 closed Thursday at 1.254.09. Jumped to 1.262.08 in Asia which is still holding. The weekly downtrend could easily be changed Friday.

Very small movements could change the six month old downtrends for these two indexes. A very exiting trading day will start in Europe at CET 09:00.

22/12/2011

Signs Point to Economy’s Rise, but Experts See a False Dawn

European Bank in Strong Move to Loosen Credit

Analysis: 2012 could prove even wilder ride than 2011

I really recommend this article because it gives a good and easy to read background  
to what might happen 2012.

http://www.reuters.com/article/2011/12/15/us-world-risk-idUSTRE7BE0UK20111215

All 2 hour trends have now changed to up and the daily trends have also turned up for important indexes.

There are two groups of indexes now. DOW, SP500, SWED and IBEX have not only got the 2 hour trends changed to upward but also the daily trends have turned up today as well. These indexes could now move up to test recent tops. The strongest is still the DOW which can take a new high since it is back in the 12.000 area.

FTSE, DAX, CAC, MIB the biggest European indexes do not move much and does not seem to take the very good news from the Spanish surprisingly good result in the three and six months bills sales Tuesday and the 480 billion loans to the banks from ECB Wednesday as a reason to move much higher.

Yes the turnover in stocks slows by the day and usually the markets movements is not, according to many analysts, something to build upon when everyone is back Jan 2, 2012. Then the real trend will be set quickly. However the trends set now will be enough to keep the markets from falling during December and maybe DOW could take a new monthly high.

18/12/2011

Outlook for week Dec 19, 2011

This is the last"real" trading week of the year. Already many participants have  finished trading and many more will leave day by day. This does not mean that the volatility will be low.
The technical picture for the strongest index DOW, shows that the monthly trend is still down, and from the opening on Monday the weekly trend will be down for the first time in three months. The close last Friday below the weekly 8 MA indicates further fall this week from the close 11.855.7. They daily trend is still down and the 2 hour trend turned down on Wall Street the last hours. The strongest resistance point for a rally on upside will be 11.929. I do not think we will see the DOW stay above the 12.000 level more for a long time. There is however  a few indicators which point to a sideways trend this week.

SP500, FTSE and DAX looks the same as DOW.

The fundamental outlook for 2012 seems grim according to many analysts. Mr Rubini says: A eurozone recession is certain, the UK is double-dipping and the US is growing at a snail's pace – fasten your seatbelts, it's going to be a bumpy year

China is also said to be in for a sharp slowdown.

If this week will be very slow with no big changes I will not comment.







.

14/12/2011

What happens now with the big picture?


Technically the weekly trend is the most important for the long term trend. The drop during Monday and Tuesday and trading so far Wednesday has made the very important 8 week MA turn down for all indexes but the DOW. The week is not over until close on Friday but so far SP500 and FTSE is trading below this MA which now has become resistance points, SP500 1.237 and FTSE 5.475. The DOW which is the strongest index has been holding above its 8 months falling MA at 11.952 for a long time, but suddenly fell yesterday to close below at 11.949.6.
Today’s trading is above yesterdays close in all indexes after 90 minutes trading in Europe but below the new resistance points. Much can happen to change this situation before end of the week but once broken is always broken is my key word.
Finally the EUROS new low yesterday is very important sign for the long term picture. The currency is now technically very bearish long term.

13/12/2011

EURO and all stock indices but FTSE and SWED take new December lows at Tuesdays close in the U.S.

All stock indexes moved up during Asia, Europe and US trading until CET 20:15 when the Fed's report was published saying no changes in policy now. DOW and SP500 fell sharply down to new December lows and closed a bit higher but still the lowest close of the month. All European indexes took new lows as well. Only SWED and FTSE held up.
The EURO took a new 11 month low on close at 1.3029. Next resistance point is 1.2907.
The 2 hour trends are down every where and I expect new lows Wednesday.

The EURO trend is still down but the bottom formation built in Asia seems strong. DOW and SP500 has also built bottoms and it will be up to Europe if this should continue.


12/12/2011

EURO seems to give up further downside move. DOW, SP500 and DAX do the same


The EURO, DOW, SP500 and DAX behaving the same way, small movements up and down crucial breaking points.


DOW, SP500 and DAX now retesting broken supports from below


DOW last support 11.924.4 holding for first attack. Now at 11.953


The EURO close to 2011 low at 1.3145, now 1.3185. If broken big fall possible


SP500 and DAX takes new 2 days lows open up for big fall


DOW and SP500 now in 2 hour chart downtrend


EURO and DAX in 2 hour downtrend taking new lows


England FTSE daily trend turns down on opening, index start falling


France CAC daily trend turns down. Europe opens in 20 minutes


DOW and SP500 small trends down and indexes falling


First indications in Europe at CET 08:00, EURO and DAX daily trends turn down and small movements on downside starts. Trading in Asia very slow, DOW and SP500 moving sideways with 2 hour trends still up.


11/12/2011

Euro Crisis Pits Germany and U.S. in Tactical Fight

A new critical week for the weekly trends starts Monday Dec 12


EUROPE must still figure out how to restore market confidence on the sovereign debt outlook.  The U.S. believes that the European Union crisis summit made important progress in combating the sovereign-debt crisis but more short-term money is needed to demonstrate to markets a commitment to the euro, a senior Obama administration official said Friday. It remains to be seen whether markets are going to decide that the scale and capacity of Europe's bailout funds are credible – MarketWatch

My view of the markets now

There are only a few critical weeks left to break the weekly uptrend for the DOW and the SP500.  FTSE, DAX and SWED weekly trends have now changed from up to sideways. IBEX, MIB and CAC trends are already down.
The daily trends are all up and so is the important 2 hour trend but this could change already in the beginning of the week December 12.
DOW and SP500 got above my targets for the key reversal for Friday but the margin is not big so maybe the top of the current uptrend was set Thursday for SP500 at 1.271.66 and for DOW at 12.297.9.
The overall technical picture plus the fact that the markets have had the news from Brussels to think through and the Euro and the DAX right now looks close to get a daily downtrend from Monday, tells me that the 2 hour uptrend for the stock indexes could change already on Monday. What happens in Asia will be very important for the European opening.

08/12/2011

DOW closed as a key reversal as well.

A key reversal occurs when the daily bar in this case takes a new high but closes below the day before's low. This is a technician term for that the top of the trend most likely has been seen unless next days high gets above 61,8 percent of today's high minus low.
Short traders use to watch this second day and sell if they see it will not get over 61.8 percent.
Thursday's high was 12.298 minus low 11.963 is 335 x 61,8% = 207 plus 11.963 =
12.170. According to this theory if Dow does not get above 12.170 Friday the uptrend is over.

SP500 close at the days low 1.234.38 in a so called spike. A spike in combination with a so called key reversal make today's top very likely to be the high in this two week uptrend.


SP500 just taken new December low at 1.235.67


DOW and SP500 now in definite 2hour chart down trend.


SP500 and FTSE sellsignal and 2 hour chart downtrend


SPAIN now 2 hour trend sell signal. Italy falling sharply


SWED uptrend broken. Uptrend still holding for FTSE, SP500 and Dow


Eurozon countries, Germany, Italy and France in serious downtrend so far. Spain still support.


The Euro has three main support points. 1.3319, 1.3314.8 and 1.3236.7. Low today 1.3311.4. Now trading 1.3331.


EURO sell signal for 2 hour trend leading the indexes down


Indexes has prepared for downside and 2 hour sell signals now in place for main indexes


World central banks intervention ?

The strong rally that was perfectly programmed to Nov 30 took the Euro and many indexes from the lows into a daily uptrend which still is in place. Any trials to change even the small 2 hour trends to downside has been changed to upside when trading volume has been slow. I have seen the central bank perform in interventions since the mid 1980:s and no one of the private players don't even try to fight the central banks. There has been intervention when for instance the American FED and the Japanese BOJ have stood against each other when the yen has fallen too much against the dollar but otherwise disagreement seldom occurs to my knowledge.
Now we are playing with the Euros live or die. We live in 2011 with all the technology in the world in the hands of all central banks and the governments in the world with one goal, to avoid any sort of panic if the Brussels talk does not go well. I think that we will not see a Euro collapse, at least not this month. When it comes to the stock and bond markets I believe that there are instruments and connections that can  keep them above a certain level as well in the low turnover month of December.
There have been many Decembers since 1983 which I have watched where there have been problems and a break on down side or upside overdue - but not so serious as the current - but the first trading day of January it has started with a tremendous power down or up. What will happen now I don't know.

What I am trying to say I think is that we should not be surprised if a bad out come on Brussels does not immediately is reflected in the Euros behavior.

 America has seen the Euro rise from 0.50 to 1.60 the last 40 years and the dollar fall from 340 to 80 against the yen. U.S. cannot exist with a strong dollar against these currencies so the US will do everything to keep the dollar weak. US has tried to get the Chinese currency to be traded freely as well but China knows that they cannot beat America when it comes to trading and pushing their currency up a few hundred percentage points.
Germany's only chance to get their currency lower has been to have the Euro instead of the Deutsch mark.To share the currency with low exporting countries.









Eurozone crisis: Leaders ready for 'do-or-die' summit

07/12/2011

US market lifted DAX and STOXX 50 on upside last hour and by doing so the sell signal in Europe disappered


STOXX 50 which is the Eurozon Blue chip index of 50 big stocks, has got a 2 hr downtrend in place and a big possibility to make a key reversal at close CET 17.30


DAX and SWED got 2 hour downtrend in place now. Other European indexes also down. Could develop trend change i all Europe indexes


Optimism is very strong before EU meeting

The EU ministers will meet Thursday and Friday. I do not know when the decision is made public but I think the old rule - buy on the rumors and sell on the news - might happen. All European indexes are in a definite bear market technically and I do not think they will rush through the falling 8 month MA:s and close there. I expect at the most a move above this curve for a while but then the uptrend will be over.
Regarding DOW and SP500 the situation is different technically and they can move higher above the falling  8 month MA but my feeling is that they will not go up to 2011 tops and they will also sell on the news. This is my feeling right now so this outcome is not written in stone. 

Germany DAX shows what can happen now

Above is the daily chart. See the blue curve, 8 MA that pushes today's bar, which just opened,maybe to new high. The target is the top of the chart where a gap is which must be closed.
Below is DAX monthly chart. One bar is one month. The small bar to the right is December so far. If DAX moves up to the top of the daily chart the Dec bar will move up to the falling 8 month MA which has crossed the horizontal curve, 21 month MA. It can get over the 8 MA if the market reacts strongly but not very much. I think a move like that would be the last high.


05/12/2011

All index trends are still up and I expect new highs

DAX has a gap at 6.342 and FTSE a gap at 5.617 which I expect to be closed in this uptrend. There is a possibility that IBEX, MIB, SWED and CAC will test the falling 8 months MA and DOW will test the high at 12.287 and SP500 will test 1.276.

The 2 hour trend has now been up since Nov 28. I still think  that what happens during this and the coming two weeks will be crucial for the long trends which so far are down.
However since the four big: DOW, SP500, FTSE and DAX have had the last four daily closes far below the highs there are sellers in the market.

Manipulated trend again?

All European indexes are locked in a definite bear market. The last 8 days rally with new highs everyday might give the impression to many journalists that what is happening with the Euro meeting goes fine. The traders in Europe might think so as well. My own take may be odd but this is how I see it from a technical analysts perspective. All European indexes starts trading at CET 09:00. They close at 17:30. DAX, FTSE and CAC futures are trading until US close at 22:00. DOW and SP500 opens in Asia at 01:00 every morning. At that time the last few days the US indexes have moved strongly on upside so when Europe starts in the morning they start with big gaps which forces them to go higher and higher in what they think is good news. I think that the whole scenario the last three trading days is made by the big traders, that is manipulated.The rallies that has occurred in early trading in Asia looks from my perspective technically manipulated and fundamentally wrong. I have seen charts every day since 1983.

Since these rallies in the DOW and SP500 starts from a downtrend at close with a strong uptrend 3 hours later with gaps it is difficult to push away my thoughts of manipulation in the higher school. By doing so day after day these people make enormous money in Europe every day if I should be right.

However I have to analyze the trends and the fundamental facts so it is not my business who is doing what. But one day in the future some one will see why the markets sometimes move manipulated.




EURO, DOW, SP500,DAX and FTSE have just started falling back.2 hr trend down for Euro


10 reasons the crisis isn’t over Commentary: There may be a lot more bad news to come

I really recommend this story to see the true big picture.

http://www.marketwatch.com/story/10-reasons-the-crisis-isnt-over-2011-11-29

Leaders Piece Together an Effort to Keep the Euro Intact

As crucial as this summit meeting will be for market confidence, Mrs. Merkel loves to repeat, “There is no magic wand” or “single act” to solve the euro crisis. As she told German lawmakers last week, “It is a long process, and that process will take years.”


This says it all. Will the market get confidence in the euro now this Friday. I don't think so.


Here is the whole story from New York Times:
http://www.nytimes.com/2011/12/06/world/europe/leaders-piece-together-an-effort-to-keep-the-euro-intact.html?partner=rss&emc=rss

World Stocks Up as Crucial Euro Zone Week Kicks Off

04/12/2011

The Euro has started the trading week

EURO daily, one bar is one day.
This is the first market to open the week. That happens on Sundays CET 19:00 and stops Fridays at 23:00. During the whole week it is trading 24 hours per day. Some Sunday evenings it can make a powerful start run immediately for hours, Sometimes it is hardly moving. After one hour trading it has tested the 8 MA - the blue lowest curve - which turned on upside now, for Monday. So far buyers are in at that point. If this small uptick in the 8 MA will hold, it will get higher by the day the whole week. The resistance will be the falling 21 MA - second curve from below. which will fall at least until Wednesday. A sudden powerful rally could go all the way up to the 34 MA - the highest of the curves - but there it will be stopped this week. The 2 hr trend is down so there will not be a quick rally on upside, if that should happen. A powerful break below the 8 MA tells me that SP500 will open down at CET 01:00 in Asia.

Comparison of the U.S. and European stock indexes.

This is SP500 from 2007 until today. I often talk about waves. I believe you all know how to count waves. From the bottom of the curve Jan 2009 to the top April 2011 there are three big waves. The first wave have five smaller waves then the correction down in three waves. From that bottom there are again five smaller waves and finally a three wave extension that tells you that the big uptrend is over. Then you see a big head and shoulder formation above the line and a break of the neckline which takes us to the low in August.  Then three waves uptrend and fall but not below the low  so the market goes up to recent top Oct 24 and makes a three waves correction down Nov 21 and after that comes last weeks rally. My immediate feeling is that this trend will go up to resent top. However other tools tells me that will not be the case.

Above is England's FTSE and to the left Germany's DAX. Nearly the same pictures. These three markets will react the same next week and the next several years. If you know how one of them reacts in the big picture you know how the stock markets react in Europe and in the U.S. Since SP500 futures trades last and starts 8 hour earlier in the day I follow that one only. Do you think the DAX chart now will take a new chart high. No way. Then the SP500 will not either. If you think the SP500 will start a new bull market now then you also believe that Germany will. When I view the DAX my immediate reaction is that when the current uptrend ends, which will happen soon,  it will go down to the low of the chart.


02/12/2011

The next few weeks will be extremely crucial for the big trends.

All stock indexes rallied the whole week on the Central banks news to keep liquidity in dollars. The last three days  the closes where the same, DOW 12.010, SP500 1.244, FTSE 5.515 and DAX 6.048. It is very seldom you see three days close at the same points. The rally has brought the indexes in position to technically either let the Weekly 8 MA cross the falling 34 MA within the next three weeks and eventually start a long term uptrend. It is important to remember that the Daily 8 MA will move up until late next week and slowly lifting the floor day by day to stop eventual drops. I said several month ago that we should see the signs in mid December where this trend is going. I like this complicity and I am sure we will find he right trend unless intervention occurs.
The only indexes which have a possibility technically to do this are the strongest indexes, DOW, SP500, FTSE and DAX. The 2 hour charts are close to a sell signal for all these indexes but the trends are so far still up.

The EURO has not rallied at all and finished the week at 1.3400 just 150 point higher than last week. The Euro will therefore on Monday directly see the 8 week MA turn down before crossing the 21 week falling MA, which is a bearish technical sign. However there is a possibility that the Central banks are guarding the Euro against a new bottom.

All the good and bad news this week has now been priced in. We even know what the likely outcome of the Euro minister's meeting on Dec 9 will be. I cannot find any more good news to look forward to right now. Instead traders will ask themselves if Spain and Italy now can pay their debt and other important questions about what really happened. The short covering rally cannot get any further strong  help from now on because the majority of shorts have been covered and so have the gaps.


The EURO is taking new daily lows. DAX and FTSE small trends still down.


German DAX and English FTSE are taken new daily lows.


All indexes took weekly highs on Europe opening and has now moved to very strong resistance points.

Watch up for US new payrolls expected to be plus 125.000. A lower number could set off a very strong reaction on down side. The non farm payrolls numbers will come at CET 14:30. Since the indexes technically have only a few points left in Europe a low number could change the upward trend.

01/12/2011

Money Flows, but What Euro Zone Lacks Is Glue

ECB's Mario Draghi warns of increased 'downside risks'

Indexes are topping out.

The European indexes closed yesterday just below the falling 8 month MA. They all are in definite bear markets and the upside potential is very limited. This MA will fall another four months and it is seldom the trend is above this MA so I look upon it as a wall. The 2 hour 8 MA has a few more hours to go before it can turn down in Europe, that is of course if no more highs are taken. But remember the daily trend is now up and it can go on for five trading days. That is the 8 day MA which is rising from a very low point and it will take time to reach up to the trend.

The U.S. indexes have not got the falling monthly 8 MA to cross the rising 21 MA. The falling MA seems to continue for at least 4 months and DOW is currently above this MA where I do not expect it to be very long. DOW and SP500 both closed below the MA but this morning it has fallen due to a new month but DOW does not seem to react so far.

The bear markets are still very well in place and now I am looking to Fridays close of the weekly chart.

When this trend turns down the target is to close the gaps at the bottom. All gaps on the upside are now closed.

This is my first take after 90 minutes trade in Europe. I want to see that no index is taken a new high the next 6 hours.

I recommend no action, just stay and wait.

Central banks unexpected dollar news sent the markets into a tremendous short covering rally

SP500 closed Wednesday on high at 1.245.55 and the 2 hr chart trend is still very strongly up for all indexes. The daily trends have now turned up. The news were planned to take place on the last day of November resulting in unusual high  monthly closes which however does not effect this big downtrend trend since no close got over the falling 8 MA:s. The weekly downtrends are so far not in danger. After close next Friday I will examine if the big trends have been damaged technically.

Just now it is just to wait and see how strong this trend is and how high it will go.

The Euro closed the month at 1.3445 and hereby stopped the monthly 5 wave trend to develop on downside. However the 8 months MA now at 1.3974 will continue to fall at least in to April. This bear market will be very difficult to change.


30/11/2011

SP500 rally now at 1.202.84


SP500 has closed small gap, on its way to 1.197.47


SP500 starts strong rally when Europe opens.. Will soon see if 2 hr 8 MA can stop other ways gap 1.194.40 possible target.


SP500 2hr chart new low close on top formation and 8 MA crosses 21 MA on downside.


SP500 retests broken 30 min chart closes 1.184.98 and 1.185.55. to get back above.


Euro powerful break on downside. Daily low close at 1.3236.6 seems to be the target.


Euro one hour chart close new low. Last support intraday low at 1.3284.7. Low so far 2 points above.


SP500 last support for one hour chart broken on close


SP500 clears resistance and now on its way down


SP500 get buyers at break point 1.187.22. New gap at 1.194:40. Very slow trading. Europe opens in one hour.


SP500 and the EURO got sell signals on 2 hour chart


29/11/2011

All indexes have gaps at the bottom to cover. Quick turnaround down could happen

In the current uptrend only DAX and CAC have closed their gaps. All the other indexes have to go higher. DOW to at least 11.791.3, SP 1.214.72, FTSE 5.346.52, SWED 940.07, MIB 15.230.9 and IBEX 8.303.

The 2 hr up trends are in tact and a a gap cover could happen today or within the next few days. Some indexes may not be able to close their gaps before the markets tops out and the trend changes to down. Lots of news today in Europe and the U.S. so a sudden rally or drop is in the cards.

More important is the gaps that all indexes got at the bottom when the uptrend started. That means that when the top of this uptrend is in, there could  be quick falls down to these gaps. Here they are: DOW 11.240.6, SP500 1.159.40, DAX 5.456, FTSE 5.183.25, SWED 891.4, MIB 13.961, IBEX 7.761 and CAC 2.866.

I will follow trading in SP500 from now until US close and Asia opening and post messages as soon as I see something of importance.


Crisis in Europe Tightens Credit Across the Globe

Pressure mounts on Europe as finance ministers meet

SP500 breaks important 1.200 and peak at 1.206.69. Target is now 1.214.72 or higher


The two day uptrend finally has run into strong selling pressure

SP500 did early this morning test the crucial old resistance point 1.200.00 but were stopped just below at 1.199.64. The 2 hr chart uptrend is still in place and more tests could come during the day but the uptrend has lost its steam and and a down turn could also start. Now at 1.190. 34. It feels like the top has been seen.
A break above 1.200 would make the gap at 1.214.72 the target.

The Euro has topped at 1.3398 by the 8 day MA and is currently trading sideways. The very important  resistance point at 1.3384 must hold Wednesday close to keep the long downtrend in place. Now trading 1.3329. The 2 hr uptrend is still in place but right now the trend is sideways. I feel the Euro will close the month below 1.3384.

28/11/2011

Crisis threatens EU sovereign ratings: Moody's

Germany, France press coercive euro zone debt rules

http://www.reuters.com/article/2011/11/28/us-eurozone-idUSTRE7AR0P320111128?feedType=RSS&feedName=topNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FtopNews+%28News+%2F+US+%2F+Top+News%29&utm_content=Google+Feedfetcher

Interesting story from Reuters regarding the political situation and different solution to the debt crisis. It is said that speculators want the Euro down which supports my view that the Bundesbank  is watching and prepared to fight the speculators. I worked with the same situation in 1984.

Why the markets are up today

Last Friday there was a short covering rally in the Euro from the weeks low at 1.3211 up to 1.3296 within two hours before it fell back to close the week a 1.3236. Sunday the Euro opened at CET 18:00 - 7 hours before the SP500 - with a new and more powerful rally up to 1.3341. Accordingly the SP500 opened with big gap at 1.172.65 from Friday close at 1.154.40. The Euro and SP500 then went sideways until  Europe opened with heavy short covering pushing the Euro and SP500 to new highs 1.3398 and SP500 1.189.99.
Since then until now the trend has been sideways again possible waiting for the US to open.

SP500 has now closed its first gap at 1.186.69. The second gap is at 1.214.72.

Of course there is a planed intervention behind all of this. It could be be the ECB wanting the euro to stop falling or someone big player who saw this as a perfect way to change the stock markets to an upside trend.
ECB has the German Bundesbank which is a specialist on currency intervention since the 1970:s.

Time Runs Short for Europe to Resolve Debt Crisis

26/11/2011

Where are the stock markets going now. Part 1 The EURO

The biggest question for all markets now is. How will the Euro perform ? It is a must to know now exactly how the Euro  moves. The Euro against the dollar is the biggest trading item in the world on turnover. Far bigger than all stock markets in the world taken together. No one can manipulate its trend more than for a very short time. Here is the trend 1971 until today. There are 5 waves and the euros long uptrend might soon be over. The low in March 1971 was 0.5387 and the peak in July 2008 was 1.6037.

Here is the last long wave wave  from 2000 until today. After the peak 3 years ago at 1.6037 there has been a three wave correction down to 1.1875 in June 2010. From there a five wave move up to 1.4939 in May 2011 which is the last peak in this chart. Since May we have had FIVE waves on downside if the Euro closes the month next Wednesday below 1.3384. I will come back to this if it happens.

This is the weekly chart. One bar is one week. Friday close was 1.3237, see the horizontal line. A break below 1.3142, the nearest low to the left, is very bearish. The technical picture of the weekly chart says that it will do this but not when. It could happen on Asia opening Monday or a two weeks later.




Finally the daily chart, every bar is a day. Here you can see exactly what it takes to make a new low. The trend can stop here and go sideways for four days and then move on upside or it can stay a couple of days and then drop to a new low. Everything is possible. The coming week will be crucial day by day.


Since the main fundamental question is the Euro crisis I believe myself that where the Euro goes the stock markets will go.

PART 2, The Stock indices.

The indexes looks more or less like the Euro daily chart above. The Spanish IBEX looks the worst with the 8 week MA down before crossing the 21 week falling MA.


This is what it looks like. More or less as the Euro week chart but here the MA is turning down just before it hits the 21 MA. This use to be a very bearish sign. There is no chance what so ever to get above this falling 8 MA for the next 8 weeks if the down fall should stop here. It also use to be a very power full "push further down" sign.

The Italian MIB and the French CAC will get their 8 MA down when the new week have started and they have a bit more to fall than IBEX. DAX, FTSE, SWED and the EURO can theoretically still avoid this situation another week or two. DOW and SP500 still have their  MA's on upside but they could turn sideways soon or down if a big drop happens.

Next Wednesday the falling 8 month MA:s will cross the 21 month MA and become definite bear markets for DAX and FTSE.  DOW, SP500 and the EURO will still only be bear markets, which theoretically can be reversed, but have their falling 8 MA:s down steeper after this last day of November.











Bailouts and Austerity Measures Aren't Working: Is This the Euro's Last Stand? Read more: http://www.time.com/time/magazine/article/0,9171,2100210,00.html#ixzz1enhhZzo4

Bond market hammers Italy, Spain ponders outside help

MARKET EXTRA Archives | Email alerts Nov. 25, 2011, 10:59 a.m. EST Europe bond auctions present crucial test Italy, Belgium, France, Spain to sell up to $26B in bonds next week

25/11/2011

SP500 maid a short rally for two hours and then fell back to where it started closing at a new low 11.154.39. First quick view on next week forecast tells me it does not look very good.

A complete analysis for the coming days will be published before trading starts in Asia next Sunday.

Have a nice weekend

SP500 and DOW starts powerful rally when Wall Street opens


Spain IBEX low daily 2011 close is 7.649.5. Now trading below at 7.607.5 as today's low. 2011 intraday low at 7.502.


Euro against dollar is trading at new daily low of 1.3307. Target for current downtrend seems to be a test of 2011 daily low close at 1.3174.4


SP500 is now trading at last daily resistance point 1.155.54. A daily close below this level opens the way down to 2011 lows. My technical target intraday for the downtrend is still 1.147. Wall Street will be open half day today. DOW, Nasdaq and Japanese NIK all trading at new lows.


SP500 closed Thursday at new low 1.160.57. At Friday opening in Asia all indexes fell to new lows. SP500 has so far reached a low of 1.154.52.


24/11/2011

SP500 has made a rally from new low point reaching above Wednesday close at 1.161.96. Then going back to retest this level from above and it held so the small trend is now trying to move higher.


France, Germany, Italy won't give ECB orders

SP500 takes new weekly low at 1.160.20


All indexes upside rally trial got strong resistance at 2 hr chart falling 21 MA. A break out on upside seems unlikely at present but could change again later.


SP500 and FTSE one hour trend is up and rally seems to be underway


SP500 has moved sideways slightly up since opening in Asia and first hour in Europe. This means that a bottom formation is being created which later today could set off a rally on upside. All European indexes are doing the same but IBEX which has taken a new low. Usually Thanksgiving Day is a calm day but the futures market is open as usual. So far it is just wait and see.


23/11/2011

SP500 has just taken a new 7 week low with current low at 1.166.42 and target could be 1.155.55 where the 8 week MA turns down .


SP500 has now 2 gaps, 1.214.72 and 1.186.69. Trading has been sideways for 11 hours and a rally could not be ruled out even though Wall Street have less traders because of Thanksgiving Day tomorrow.


Merkel backs ECB, warns on Greek aid tranche

The story below showed how dependent Euro banks are on ECB. Here are clear words from Merkel to German parliament, ECB's mandate is not to give out loans.

http://www.reuters.com/article/2011/11/23/us-eurozone-idUSTRE7AM0L420111123

Europe’s Banks Relying on Money From E.C.B.

SP500 taking new low in Asia at 1.168.65


SP500 broke last support at 1.181.01 on downside at Tokyo open to a low of 1,170.65. Now trading 1.175.56. Target 1.147 area.


22/11/2011

GDP bad news.SP500 will now test yesterday low


SP500 upside testing reached 1.200.37 but seems to give up and turning to downside. However US GDP-figures will be out at in 6 minutes


Illustration of current situation, SP500

This is 2 hour bars with the 8MA below and the 21 and 34 MA:s above. You can see the gap seven bars from the left.

SP500, very strong selling pressure at 1.200 holds trend below this crucial resistance point. Buyers trying to cover gap have not got enough buying strength now

What is going on is a fight between two groups. The strongest group so far sells heavily at very important chart point at 1.199.37 - 1.201.12. This point is looked at all over the world because many thinks if this points goes the bear market is not in place anymore. The other group thinks that the gap at 1.210.46 must be covered for the down trend to continue. The 2 hr chart 8 MA is up, currently 193.98 and will rise for several hours unless the buyers give up. However as the time goes by both teams will be stronger and stronger. Who will win is difficult to say. I will continue to monitor this fight.

Right now a new attack at the upside

SP500 2hr 8 MA will turn up at 09:00 stopping further downward trial


Rally may start very soon


Rally technically ready to take off before Europe opens.


SP500 bottom finished in Asia for rally to close gap. Be prepared for upside move today.


21/11/2011

Daily technical downtrend established for all indexes. But remember the gaps.

SP500 closed Monday at 1.192.46. A close below 1.200 is another strong indication that the market will fall further. It is very important to note that a gap always will be covered. Usually this happens when a bottom has been created on the 2 hr chart and the falling 8 days MA will not be confronted. This 8 day MA gets lower by the day but for Tuesday and Wednesday it has not come down to the gap point. The gap point that a rally must reach for SP500 is at 1.210.46. All indexes have gap points so do not get surprised if a rally comes up to this level which is very near last Friday's close. The gaps were created because the Asian opening was below Fridays lowest point.
The big drop came early Monday, between CET 08:00 - 16:00. Trading after that until close at 22:00 was used by the market to move sideways and by that behavior  creating the beginning of a bottom which when ready could be a starting point for a rally. Remember also that many players have short positions all the way up to Friday close. These short positions have electronic stop points for the short positions to be bought. In a rally, which usually is handled by the big boys everything goes very quickly and most of the time it is unexpected.

There are also many traders prepared to take new short positions when the rally runs out of steam. The time during this Thanksgiving week is perfect for such a rally because of small turnover.

I do not know when this rally will occur it could be Tuesday, Wednesday or some day in late December. It can also come any of the 21 hours SP500 is traded and you must be lucky to sit at your screen if you want to short the top.



SP500 takes out new important resistance at 1.186.81 with a 2 hr close at 1.185.21


SP500 now 15 min close below 1.190.0 at 1.188.9


Italy MIB has now taken a 5 months low. Target 2011 low at 13.097. Now trading 14.616


SP500 now low, taken out final support at 1.190.0. Target 1.147 next.


DOW has taken out last support at 11.626.7. Now trading 11.582 target 11.388.


DOW and SP500 takes new daily lows after Wall Street opens


SP500 is testing important 1.201.02 from below but so far been unable to hold above it. I still expect the markets to test 1.215 area to cover this mornings gap. Trend currently sideways 2 hr chart.


Italian MIB low 14.742. Holding above 6 week low at 14.715. Big picture same as CAC and IBEX, very bearish long term.


Spanish IBEX 5 week low at 8.134. Weekly MA now down, very bearish sign. First target 2011 low at 7.502


France CAC40 new 5 week low. First index where 8 week MA turns down. Very bearish longterm. First target 2011 low at 2.691, now 2.914.


Euro 5 week low at 1.3421. Low so far today 1.3438. No immediate danger so far for new low.


SWED has broken very important support at 932.85. Target a new 2011 low at 833


DOW just taken a new five week low at 11.618.3.


FTSE closed Friday at 5.354. Opened one hour ago with a gap at 5.323 and fell to a low at 5.241 first hour, breaking all support points for continued fall.


SP500 has taken out important support at 1.200 now at new low 1.193.62


SP500 new low at 1.204.47. First support at 1.201.02 on 2 hr chart. Second support at 1.191.75


SP500 closed Friday at 1.215.72 and opened i Asia at 1.207.47. This gap will most certainly be closed during the day. Now trading 1.204.97 at Tokyo open.


SP500 breaks on downside at Asia open with a 8 points gap. Technical picture short trend very bearish.


Analysis: Deficit deadlock may send chill through markets. US stocks could fall on failed action to lower deficit by 1.2 trillion. Failure now looks likely before deadline Wednesday.

20/11/2011

Outlook for the stock indexes during week Nov 21.


SP500 and all European stock indexes could technically start to fall down to 2011 lows any day this week. The only index which still is holding a sideways trend with a possibility of a sustained upward trend is the DOW.

The hesitation to break down last Thursday and Friday was because of very low activities which especially have been the case on Wall Street. Everyone seems to wait for a sudden positive signal regarding the European debt. There are lots of rumours about a sudden solution that ECB will get green light from Germany to become the lender of last resort.

To make a forecast even more difficult is the fact that the U.S. has their biggest holiday, Thanksgiving on Thursday 24. Many market participants will leave Wednesday which practically means that Wall Street will function normally less than three full days this coming week.  Europe usually does not want to trade when the US traders are off. However I expect the big players to sit at their computers and with low volume send the indexes up and down without a real trend.

My personal job right now, since we technically is at the very edge of the drop with SP500 and FTSE, is to follow these two indexes in detail at least the first three days of the week and Friday and report on this blog what I see. 


Remember that the big technical picture will get worse by the day on the daily charts so any happy rumour from Europe with a powerful rally will most likely be just that, a rally that will come back down again quickly or after a few days.

18/11/2011

Friday stock indices have moved above yesterdays low but very little. Now SP500 and FTSE is both very close to take out yesterdays bottom. If this occur a substantial drop can occur

However DOW is still holding above 8 weekly MA so a double bottom could well occur Friday in New York including FTSE and SP500.

Before US trading next Monday I will have an outlook report ready.

Have a nice weekend

The financial stability of Europe has come down to one institution, the European Central Bank, which is now under heavy new pressure to rescue the euro — or possibly see it collapse.

European problems get worse, no clear solution while debt yield increases

17/11/2011

DOW and SP500 got short term trend up and computer trade on upside for the moment.


US and European trends down approaching very important resistance levels.

The technical picture has deteriorated significantly since Wednesday. DOW, SP500, FTSE, DAX and SWED are moving in tandem down to test important resistance points which if broken can cause big drops.

The daily trends are now definitely down and several support points have been broken since Europe opened.

Today and tomorrow Friday could be the beginning of the next big move down.

16/11/2011

IMPORTANT information about the markets next move.

All the stock indexes have now been trying to get higher for three weeks and three days. The last hour Wednesday in New York the Dow fell 184 points to close at 11.903. SP500 fell 19 points the last hour to close at 1.236.96. The only technical obstacle to a sharper drop is the rising 8 week MA. This MA will continue to rise a few more weeks and could technically hold DOW and SP500 up with continued possibilities to take new highs. However SP500 looks more and more unlikely to go higher and a new technical factor has come in to play that could stop SP to take new high. To cover all eventualities, even an unlikely break of the 8 week MA I already now want you to be aware that these two indexes can start falling from now on.

The euro has taken a new low Wednesday getting below strong resistance points which adds to my cautiousness and ECB has been forced to buy Italian and Spanish bonds since the market wants higher and higher yield by the day. A sharp drop can occur any time now and a falling Euro could scare the stock markets.

Summary: The situation in the markets is difficult to read during this period of quick turnaround in trends and new information dropping in about Europe's debt crises which still affect the markets on both side of the pond sharply. No exact time could be set now for the drop I expect.

Signs of Broad Contagion in Europe as Growth Slows

Dow has moved up and down within a 165 point range the whole trading day and I do not see any news coming that could change this behavior tonight.


DOW is now back in its downtrend currently at 12.013.


Dow closed Tuesday at 12.091.7 after a sharp selloff the last hour. Asia started with a drop gap taken DOW to a low of 11.936. When Europe opened Dow rallied on upside to close the gap and now the index is trading around Tuesdays closing level.

However the 2 hour trend is still down and this gap covering rally will soon come back down below the falling 21 and 8 MA at he 2hr chart at 12.042.

15/11/2011

Dow short term trend moving on upside cannot tell how far it will go yet.


DOW and SP500 have broken resistance point and the fifth wave down is on it way.


Monthly charts now of DOW, SP500, DAX, FTSE, SWED, MIB, IBEX and CAC with comments

All the charts are 34 months and each bar is one month. They have 8 months MA and 21 months MA. A Bear Market in my definition occurs when the 8 MA turns down. When the 8 MA crosses the 21 MA on downside there is a Definite Bear Market. A bear market can be reversed if the index moves very strongly on upside and forces the 8 MA to turn up. During 28 years I have never seen that. When 8 MA definitely will cross the 21 MA or has done so there is no way back for many months.


DOW is moving up and down the falling 8 MA and can change the bear trend.








SP500 is trading between the MA:s and have difficulties to get above the 8 MA






DAX, first chart below,will most likely become a definite bear market Dec 1. The same will happen to FTSE, second chart. SWED, third chart, is in a definite bear market and so are MIB, IBEX and CAC.                                                                                      
I do not believe that European markets will be in a definite bear market alone. The US indexes will follow according to fundamental factors that will be evident soon about the locked political situation and many other things which I believe will surface when the European debt crisis has lost interest in the media.

DOW closed Monday at 12.077, Asia traded sideways. Europe trend down.

DOW and SP500 have done a three wave correction on downside since last Friday close. If it stays that way an upside rally with start during the day. However there is a strong fight going on between sellers and buyers right now to push the DOW below an hourly close of 12.027 which will send the index into a fifth wave on downside signalling that a new test of the highs is not imminent. CET 11:00 the hourly close came just above 12.027 and the market forces on one hand are still working to hold this point to be able to start a new uptrend and on the other side those who want a break on downside. We just have to wait and see how this will be played out.

14/11/2011

The Euro is back to a very critical point.

EURUSD neckline in a big head and shoulder formation on the 2 hr chart is at 1.3653.8. This neckline was broken Nov 9 but a retest of the neckline Nov 11 was positive and the euro rallied to a top at 1.3807.7. Today the euro is falling again and last 2 hr close was just 6 points above the neckline. It is very important to keep an eye on the euro because it tells a lot where the stock markets are heading.

The first neckline break 2 hr closing low was at 1.3495.8. A close below this point could trigger a dramatic drop in the euro.

Dow 2hr trend now down as well now at low 12.090


DOW 1 hr trend is now down


DOW starts with a jump gap in Asia to test 2 hr high close at 12.227.7 but fails and falls back when Europe opens. Dow has now closed the gap but trend so far unclear.


13/11/2011

Road to U.S. recovery goes through Rome Debt crisis in Italy. Secondly here is a few words about the very big picture


http://www.marketwatch.com/story/road-to-us-recovery-goes-through-rome-2011-11-13?siteid=rss&rss=1

This article is not only about Europe but how the American economy performs. If the European debt crisis was not looming the company results, inflation and increasing consumer spending would put US in a good economic situation, according to the article. I doubt that. I think the national and especially the private debt in the US and Britain sooner rather than later will punish those which prints money to cover its debt. Europe except England do not print money so far because of Germany's definitive no to even that thought. For hundreds of years governments have printed money to make ends meet and as far as I know no country have avoided severe economic aftermath in that way. Of course US can go on this way, maybe for many years, but one day the economy will collapse. If Europe collapses because they refuse to print money that does not mean America and England are safe by doing so.

In May we had all the indexes at the top. I have calculated how much each index has lost in value from that top until last Fridays's close.

Index                              Percentage loss

DOW                                     6
SP500                                    8
FTSE                                     9
SWED                                  17
DAX                                     20
IBEX                                    22
CAC                                    24
MIB                                     30 

The monthly charts of course look different. The US and English indexes fall steep but also recover very strongly every month. The European indexes fall steeply but does not recover that much. Why this is could be the more advanced computer trading systems and the much frequently used short positions in the US especially. I also think that manipulation is easier to do with the DOW index which SP500 always mainly follow.

Only DOW and SP500 have the chance to reverse the bear market. All other indexes cannot technically do that. SP500 has a less chance than the DOW. That is one of reasons I have followed DOW in this blog.















DOW Friday close 12.153.1. What is next?

Daily chart of DOW to the left and 2 hr chart below.
The question is if all the news are priced in or not. Will the market take out the final high at 12.284 in the uptrend that started Oct 4 and how high will it go after that. Or will the Dow just stop where it is now.



Mario Monti, Italy and Lucas Papademos,Greece are the new technocrat leaders and are not interested to save a political reputation. Austerity programs are in place. Mariano Rajoy, Spain will be elected next Sunday and have told his countrymen that it will be very hard times the next year or so

These three countries are in a new situation with the people behind them so far. How will it play out? Can they make it ? I think the markets will give them at least a month to try. The technical picture still points to mid December or the beginning of January for turning down, unless we take new highs from here.

Regime Change in Europe: Do Greece and Italy Amount to a Bankers' Coup?

11/11/2011

DOW takes new high on upside at 12.001


Greece and Italy Seek a Solution From Technocrats

Here is a very good article about Greece and Italy just now and what might happen. Less pessimistic than earlier reports.

http://www.nytimes.com/2011/11/11/world/europe/greece-and-italy-ask-technocrats-to-find-solution.html?pagewanted=1&_r=1&partner=rss&emc=rss

DOW 2hr chart zoomed in

The 34 MA seems stronger and more aggressive pushing down than the rising 8 MA, that is the reason right now that I think the break will come on downside. However, big news can always change a trend like this, but 2 hour trend is my favorite trend since many years to find out where the next move will go. 

DOW moves in a triangle since Oct 27. See picture beneath. 2 hour chart.

Right now Dow is in the middle of the triangle. It is also trading between a rising 8 MA and a falling 34 MA. Today's hi 11.991 and low 11.885,5.

It seems right now as if the 8 MA will not be able to cross the 34 falling MA so I think that the trend might break on downside during the day. 

10/11/2011

DOW closed Thursday 11.823. Big picture now

Here is Dow 2 hr close locked between rising 8 MA and falling 21 MA. Break will come Friday up or down. Difficult predict now.








Dow weekly bars. This week - the last bar is holding within last weeks bar. The rising 8 MA will rise steeper up for three to five weeks. I do not expect Dow to stay below this MA. That means continued sideways trend or upwards. The 34 MA will start next Monday to go steeper down. All I want to know is if the 8 MA will cross 34 MA or not.





Euro testing neckline at 1.3654 but seems unlikely to make it. EURUSD now locked between 1.3560 - 1.3650.


DOW have tried for four hours to get an hourly close above 11.900.1 without manage so far.


DOW rally unable to hold important 11.900.1 on close.


DOW one our trend is up. Hi so far 11.902.5


Euro against dollar on its way to 1.3078 area through a head and shoulder formation with broken neckline, now at 1.3546.


DOW outlook Thursday













This is a 4 hour chart from uptrend started at 10.400 Oct 4 until the top at 12.249 Oct 27. Then the drop down to the horizontal line at 11.663 where a double bottom was created. Then an upward trend in three waves to Tuesdays high of 12.184 followed by a break down to Wednesday's close at 11.782. I expect a test Thursday of the horizontal line. A break below 11.626 can send DOW to 11.000 area.(Chart Saxobank)


DOW closed 11.782.6. Next target seems to be 11.664


Italy at breaking point; fears grow of euro zone split

09/11/2011

FTSE100 has taken new daily low at 5.424 and broken important support point at 5.446


German DAX holding steady above 8 week rising MA at 5.801. Seems to build a double closing bottom in 2 hr chart at 5.805


DOW has now fallen 300 points since Tuesday close. Now retesting 11.900.1 from below


Final intraday low is 11.838.4 if support above should not hold


Final support point is 11.859.2 on hourly close


DOW gets below important support point 11.900.1


DOW trying to get a hourly double bottom at 11.940.9 . 8 minutes left to see if it works


Euro taking new four weeks low against dollar at 1.3579.2


DOW today low 11.911.9. Tuesday low at 11.980.7 retested from below reaching 11.980.4 before sharp drop to test today's support at 11.940.9. Now trading at 11.931


DOW next resistance 11.900.1. If broken last resistance at 11.859.2. If broken steep fall possible to test 11.663.9


DOW hourly down trend looks strong, new low now at 11.941.4


DOW takes new low at 11.961.4. Next resistance at 11.900.1


DOW daily close at 11.983.2 must hold to avoid steep fall tonight at US close.


DOW intraday low is at 11.980.7 has been broken at 11.979.4


DOW crucial resistance holds CET 11:00 just 8 points above critical 11.990.7. Pressure continues.


Dow 1 hr trend down. Crucial resistance on hourly close, 11.990.7


DOW has broken out of its up chanel on downside. Short trend now down.


Nouriel Roubini sees double-dip recession: report