Gold slump (2011-12-30 XAU analysis)

What a sudden plunge of Gold price (XAU=), it has reached the support zone I mentioned two weeks ago. Target is still around 1,325 if the price breaks below the zone.

On volatility (2011-12-29 VIX analysis)

The volatility index finally starts to become normal again.

Last week of 2011 (2011-12-28 HSI analysis)

A long holiday has ended. How's your Christmas? This is the last week of 2011, and 2012 is coming. It seems quite peaceful with no bad news from Europe these few days, but how long would this maintain before another trouble comes out again?

Nonetheless, in general, the market still isn't that poor. At least the ultimate support line on Hang Seng Index weekly chart is still valid.

Let's see how HSI would go this week.

Daily chart of HSI:















Once the index broke the lower bound of the flag, and it was confirmed that HSI was able to climb back above this line last week.

Therefore, we would have to admit that the breakdown might be a false one. The green line is still a valid support line to HSI.

Indeed, we can see that the index has moved to the end of the flag. Therefore, breaking might not be too meaningful it is way to near to the vertex for a breakout.

We would have to further observe and find out any other possible patterns on this chart.

Volume was low, which is normal at the end of year and especially under such kind of unpredictable volatile environment.

While daily chart looks not-too-helpful, let's move on to weekly chart.

Weekly chart of HSI:















As usual, HSI is still moving within the purple Pitchfork. The median line plus and 20-week simple moving average have successfully resisted the index for a few times these two months.

Green line still represents the index's long-term extremely-strong support. This line intersects with the lower bound of the Pitchfork at around 16,600, which is therefore a very strong support to the index in the coming three to four weeks.

The retracement is an important thing that I missed out last few weeks. We can see that it was the 50% retracement keeping the index above 17,800.

Not much information is given on weekly chart either. The only fact we know is that the index is pretty near the area with median line of Pitchfork, 20-week and 10-week SMA. These are all resistances, at least until now. This might not be a good sign.

However, if the index is able to breakout, and is confirmed, there will be a great chance for it to reach 20,000 again, which is at the upper line of Pitchfork.

If breakdown, strong support is at 16,600. I could not see other good supports before this level on weekly chart.

Good luck.

Involatile volatility (2011-12-21 VIX analysis)

It looks like the EUR was breaking out the green flag instead of continuing to drop. Currently it has reached 50-period Moving Average and would probably face some resistant. Support is at around 1.305, and next resistant will be at around 1.318.

Today's focus is Volatility Index (.VIX).
















The index will be strongly supported at 20. And it is more likely to move sideways in near future.

Bearish continuation (2011-12-20 EUR analysis)

Above is 4-H chart of EURUSD.

Look like a bearish flag has formed and that the EUR is going to plunge even lower.

Real or false breakdown? (2011-12-19 HSI analysis)

Last week the support line could not support Hang Seng Index anymore and the index dropped below the line. This was not a good sign, but this break down is yet to be confirmed. We will have to see whether HSI would be able to get back above the line today.

This week will be a typical data-oriented week, with lots of rate decisions and GDP data coming out before the Christmas holiday.

Daily chart of Hang Seng Index (HSI):















As mentioned, the index dropped below the lower red support line last Thursday, and was trying to get back to the line on Friday.

So today's spotlight will be on whether the index could close well above the line. If so, the break down will be treated as a false movement, and that the index has high probability of breaking upwards. Resistance will be at 20,000.

One thing which is worth mentioning is that the volume increased when the index plunged below the line. This is a sign showing that the market is not as bearish as we think.

If the index finally closes below 18,500, the breakdown is basically confirmed. By using the flag to estimate the drop, next support will be at around 16,800, which is 23.6% level.

Weekly chart of HSI:















On weekly chart, there is no obvious support currently. Interestingly, the green line and the lower line of Pitchfork crosses at around 16,700, which is the level suggested on daily cahrt as well.

So we can expect a very strong support at this level. If breakdown is confirmed, we can expect a strong rebound when reaching 16,700-16,800.

For resistance, the moving averages and median line of Pitchfork are still acting very well. We can expect strong resistant force at around 19,000.

Important Economic Data this week (2011-12-18)

20-Dec (Tuesday)
08:30 Australia Reserve Bank's Board December Minutes
15:00 Germany Producer Prices {Forecast: Slight drop}
17:00 German IFO - Business Climate
20:00 Canada Consumer Price Index

21-Dec (Wednesday)
Bank of Japan Rate Decision
17:30 Bank of England Minutes
23:00 Euro-Zone Consumer Confidence {Forecast: Slight more negative}

22-Dec (Thursday)
05:45 New Zealand GDP (YoY) {Forecast: Increase from 1.5% to 2.2%}
17:30 UK GDP (YoY) {Forecast: Unchanged}
21:30 US GDP (YoY) {Forecast: Unchanged}
22:55 US U. of Michigan Confidence {Forecast: Increase from 6.7. to 68.2}

23-Dec (Friday)
21:00 US Durable Good Orders {Forecast: Rise from -0.7% to 2.2%}
23:00 US New Home Sales {Forecast: Slight increase}

source: http://dailyfx.com

Bearish view on Gold (2011-12-16 XAU analysis)

Time to wait for chances to short commodities. Target is 1330 for Gold once the price breaks the support zone, with lower boundary of 1475.

False or real breakdown? (2011-12-14 Galaxy Entertainment analysis)

Soon after Fed's speech on US economy, the US markets pared all their gains in the early trading hours and turned to negative. This might be because Fed was not announcing any further policies regarding the poor economy, which could make investors fear.

Hong Kong market probably follows today, which means a further drop. Watch out the level 18,150 mentioned on Monday.

Today I am posting the chart for Galaxy Entertainment (0027.HK).
















The price tried to break down yesterday, we need two more days to know whether it is a false one or not. And if it is a real break down, the fibonacci projection is the estimation using the red flag, though the 100% level looks impossible.

We would have the targets of at least 11.30 and 7.70 once the break down is confirmed.

No reversal signal (2011-12-13 VIX analysis)

Another exciting week? (2011-12-12 HSI analysis)

Last week I predicted that Hang Seng Index would surge and break out because of the positive economic data revealed; however, obviously the bad news from Europe had a greater impact on the market.

Indeed, Europe's leaders agreed to boost the rescue fund which led to rockets in Europe and US markets last Friday. Today HSI probably follows this surge at opening, and we can do nothing regarding this already-known information.

For yet-to-be-known information, we will have to turn to technical analysis for hints.

Daily chart of Hang Seng Index (.HSI):















From daily chart, we can easily spot out an interesting phenomenon: the three Moving Averages converge and touch each other.

These three are 10-day, 20-day and 50-day respectively. When they are closed to each other, there will be big movements followed. We can confirm it by the similar situation in late July, during which the three MAs got closed to each other and the index plunged greatly.

This is indeed quite reasonable. When MAs get closed to each other, it means that the stock market has been moving quite flat, shares are well accumulated (either long or short positions) and it might be the right time for the rich guys to take actions.

Anyway, back to the chart, this week there might be some big movements. However, we are still uncertain whether it would be up or down.

From the chart, we can know that the bounds are 18150 and 18900. These are the first boundaries, if the volatility is going to boost, then these levels could not hold well.

Weekly chart of Hang Seng Index (.HSI):















Obviously the index was not able to break out the median line of the purple downwards trending Pitchfork last week. It stayed well within the lower area.

Therefore, the median line keeps on resisting the index, at around 19,000. This is somehow similar to the level suggested on daily chart. In addition to that, 19,700 is another short-term resistant too.

For the downside, an ultimate clear support is by the green line and the lower line of Pitchfork, at the area 16500-17000. The area seems to be too big, but it would be narrowing as time passes by as the two lines are converging.

Yet, these are levels we have to bear in mind.

Upside: 18900-19000, 19700
Downside: 18150, 16500-17000

Get prepared for another exciting week.

Important Economic Data this week (2011-12-11)

13-Dec (Tuesday)
17:30 UK Consumer Price Index (YoY) {Forecast: Slight drop}
18:00 Germany ZEW Survey (Economic Sentiment)
21:30 US Advance Retail Sales {Forecast: Slight rise}

14-Dec (Wednesday)
03:15 US FOMC Rate Decision {Forecast: Unchanged}

15-Dec (Thursday)
16:30 Swiss National Bank Rate Decision {Forecast: Unchanged}
17:00 European Central Bank Publishes Dec. Monthly Report
17:30 Bank of England Inflation (outlook)
18:00 Euro-Zone Consumer Price Index {Forecast: Unchanged}

16-Dec (Friday)
21:30 US Consumer Price Index {Forecast; Unchanged}

source: http://www.dailyfx.com

Resistant will be tested again (2011-12-09 DXY analysis)

The resistant on Hang Seng Index is so strong that it could hardly break out. Thanks to ECB and Germany, stock markets in US plunged greatly yesterday night. Today HSI would have to follow, so it would close below the resistant line. Will update further on the index next Monday.

Today let's look at the USD Index (DXY).
















Everything is on the chart. Looks like the US Dollar has a bit strength to test the resistant again.

Going to move big? (2011-12-08 Gold analysis)

Weekly chart of Gold (XAU=) showed that the price is converging. It seems like there will be larger movements in Gold price, probably accompanied by big news which also causes huge movements in stock markets.

Watch out.

Not much from Volatility (2011-12-07 VIX analysis)

Not much hints from Volatility Index. But still we have to keep an eye on any possible gap up these two days which make it form a nice Island.

Good week coming? (2011-12-05 HSI analysis)

After the crazy over-1000 points surge last Thursday, Hang Seng Index finally got back above 19,000. No bad news is good news these days.

While the economy might appear to be better this month, with good figures from Consumer Confidence and Sales, the underlying sovereign debt crisis has yet to be solved before a concrete decision and consensus are made within EU. Even if they do, the economy could take years to recover the whole world could be under recession for a pretty long time.

Nevertheless, stock markets are not too bad, but not too good either. At least in Hong Kong there are quite a lot of IPOs coming and investors could pick one to two with good potential to develop, given that they have done their homework. IPOs are not my main focus but I have to admit that it is quite interesting after trying several times to analyze the companies.

Anyway, let's take a look at this week's Hang Seng Index (HSI).

Daily chart of HSI:















The chart looks quite plain, but I guess given such messy days with high volatility, not making the chart looks more complicated that it should is a wiser way to predict.

The index is currently facing a resistant provided by the red down-trend line, and it looks quite strong, HSI could hardly break this.

However, if it does, the next resistant level will be at around 20,300 as suggested by the retracement level.

On the other hand, the green line keeps on supporting the index. So if it does not break out, we could expect it to move in the narrowing range between 18,000 - 19,000.

Weekly chart of HSI:















As usual, the Pitchfork currently dominates the chart. The index moves quite beautifully within this fork.

It reached the median line last week, and faced strong resistance. It looks like that the index could hardly break out.

However, if breakout really happens, the next resistant level suggested on weekly chart is 19,500, as compared with 20,300 as suggested on daily chart.

Downside support is at around 17,900, not far from 18,000 on daily chart. So we could expect strong support at 18,000.

BUT one important thing is that this week there are several Economic data releasing, and most of them show good signs to the stock markets.

For example, interest rate cut from Australia and Europe, rise in GDP in Australia, and drop in CPI and PPI in China. These could lead the stock markets upwards, and possibly break the red line as well. So this week we are looking at 19,500 and 20,300.

If it does happen, this is a good example of looking at both economic data and technical.

Important Economic Data this week (2011-12-04)

5-Dec (Monday)
18:00 Euro-Zone Retail Sales (MoM) {Forecast: Rise from -0.7% to 0.1%}

6-Dec (Tuesday)
11:30 Reserve Bank of Australia Rate Decision {Forecast: Drop from 4.50% to 4.25%}
18:00 Euro-Zone GDP (YoY) {Forecast: Unchanged}
22:00 Bank of Canada Rate Decision {Forecast: Unchanged}

7-Dec (Wednesday)
08:30 Australia GDP (YoY) {Forecast: Increase from 1.4% to 2.3%}

8-Dec (Thursday)
04:00 Reserve Bank of New Zealand Rate Decision {Forecast: Unchanged}
08:30 Australia Unemployment Rate {Forecast: Unchanged}
20:00 Bank of England Rate Decision {Forecast: Unchanged}
20:45 European Central Bank Rate Decision {Forecast: Drop from 1.25% to 1.0%}

9-Dec (Friday)
07:50 Japan GDP (QoQ) {Forecast: Drop}
10:00 China Consumer Price Index {Forecast: Drop from 5.5% to 4.5%}
10:00 China Producer Price Index {Forecast: Drop from 5.0% to 3.3%}
15:00 Germany Consumer Price Index {Forecast: Unchanged}
22:55 US U. of Michigan Confidence {Forecast: Slight rise}

Commodity (2011-12-02 Silver analysis)

HSI well reached 19,000 as mentioned on Monday, though such movement was kind of unpredictable. Will further update how the index would go next week on Monday.

Today let's take a look at Silver (XAG=).
















From the daily chart, the price has reach the red downwards trending line. This might tell us that the price is going to plunge further, especially after it has crossed lower the previous green upwards trending channel.

50% retracement appears to be a strong support, so the price might consolidate one to two days there. If it keeps on dropping, then previous low at around 26 will be its ultimate support.

For the upside, if it successfully breaks the red uptrend line, its previous peak at around 35.6 will be strong resistant.

So keep an eye on these levels.

What to expect? (2011-11-30 EUR/USD analysis)

Beating-the-estimate consumer confidence helped to raise the world's equity indexes, and the volatility is moving in the expected way as well. The week should be easier to everyone.

Let's see the Euro today.
















Above is the 4-Hour EUR/USD chart.

After there might be some good measures to ease Europe debt problems, the price of Euro has finally stopped plunging and gained a bit. However, it reaches a strong resistance level given by the red down-trend line.

The chart could give you some hints what to do next and what to expect. I am having quite a good view on it, but it depends on which way it will breakout.

Good luck.

Time for a break? (2011-11-29 VIX analysis)

Any possible rebound? (2011-11-28 HSI analysis)

The global economic situation is just so bad, with another European country being downgraded. We can hardly have optimistic view on the markets.

Quite busy with coursework these days, so I am not too familiar with current market situations. I guess I'd rather post my charts for your reference than typing a lot.

Let's take a look at the charts.

Daily chart of HSI:















Not too many hints from daily chart.

Weekly chart of HSI:















On weekly chart, it clearly shows strong support area somewhere not far away from the level now. So I expect it would keep on dropping but would start rebounding this week.

Keep an eye on any possible strong rebounds after reaching 17,300, 16,500, 16,000. These are the critical levels to be aware of.

Good luck.

Important Economic data this week (2011-11-27)

28-Nov (Monday)
23:00 US New Home Sales (OCT) {Forecast:Unchanged}

29-Nov (Tuesday)
German Consumer Price Index (YoY) {Forecast: Slight drop}
23:00 US Consumer Confidence {Forecast: Rise}

30-Nov (Wednesday)
13:00 US Fed's Beige Book (Summary of Commentary on Current Economic Conditions)
16:55 Germany Unemployment Rate {Forecast: Unchanged}
18:00 Euro-Zone Unemployment Rate {Forecast: Unchanged}
21:30 Canada GDP (QoQ) {Forecast: Unchanged}

1-Dec (Thursday)
03:00 US Fed Releases Beige Book Economic Survey
09:00 China PMI Manufacturing {Forecast: Slight drop}
14:45 Switzerland GDP (QoQ) {Forecast: Drop from 0.4% to 0.1%}
23:00 US ISM Manufacturing {Forecast: Rise}

2-Dec (Friday)
18:00 Euro-Zone Producer Price Index
20:00 Canada Unemployment Rate {Forecast: Unchanged}
21:30 US Unemployment Rate {Forecast: Unchanged at 9%}

source: http://dailyfx.com

Ready to break (2011-11-25 Gold analysis)

Thanks to Angela Merkel's comment about not having Euro-bond, Euro plunged and that US Dollar Index rose. As pointed out yesterday, it should go up to around 80 before meeting a huge resistant, and the index is currently 79.12, so it might still be able to go up a bit.

Daily chart of Gold (XAU=):















Looks like it would be going to break either side. However, as shown on the chart, downside is pretty limited given the other dotted green line below the solid green line.

So the price is currently supported by the solid green line. If it breaks, then the next support level will be at around 1650, which is very strong.

If the price even breaks below 1650, I will have an extremely bearish view on it because that green dotted line represents a quite-long term bullish trend. Reversal of this trend means a hard slump.

On the other hand, the next resistant is at around 1755, provided by the red down-trend line. If this level breaks, I think it would go up to the previous high at around 1900.

These are the levels we have to be a

Rising currency (2011-11-24 DXY analysis)

Above is the 4-H chart of US Dollar Index. While the stock markets are plunging due to the crazy rise in bond yields in Europe, we can see that the US Dollar is surging quite a bit.

It breaks its pennant trend (shown in orange) and starts a new trend movement. The purple Pitchfork continues to be limiting the index's volatility.

The fibaonacci projection was drawn using the starting high and low of the orange pennant. The resistant at 38.2% shows that this projection is pretty accurate.

Therefore, we can expect the index to move up to 80. Short-term support is at around 79. These are the levels to be aware of.

According to the chart, it looks bullish due to the breakout, and I expect that it would go up to 80 in next few trading days.

Good luck.

Mess (2011-11-23 VIX analysis)

VIX is expected to be moving in range these days as well. It looks like the debt problem is yet to be solved...

Be aware of such volatile market.

Quick post on HSI (2011-11-21 HSI analysis)

I just came back to UK from HK and barely had time to write, but still I have drawn a chart for this week Hang Seng Index. Enjoy.

Daily chart of HSI:















Weekly chart of HSI:

-Notice-

I will be flying back to Hong Kong for Congregation Ceremony this week. I think I will be quite busy flying and preparing, so I will not have time to update this blog for a few days.

See you all next week!

Slightly more bullish view (2011-11-14 HSI analysis)

Last week there was a huge concern about Europe. Italy's Prime Minister Silvio Berlusconi resigned and a new government is being formed, led by Mario Monti. We'll soon know what they would implement to save the country and the whole EU.

Because of the sudden jump in Italian bond's yield last week, Hang Seng Index plunged over 5% on Thursday, reaching below 19,000. We can see there is really large volatility.

Let's see how this week will go.

Daily chart of Hang Seng Index (.HSI):















Again, not much clues from Daily chart. The most important thing was that the index broke down the short-term up-trend line last week.

We can expect a short-term bearish trend to the index. We might see it go back to some where around 17000.

In addition, MACD and EMA showed a potential bearish cross. But they still haven't crossed, so we need some more time to confirm.

While daily chart doesn't tell much, let's move on to weekly chart to find any good supports or resistances.

Weekly chart of HSI:















It looks clearer on weekly chart due to the many noises these days led by the fluctuating news. The index is still sliding gradually within the purple Pitchfork.

Indeed, last week it was well supported by the middle line of Pitchfork. This is a good sign showing that HSI is not that bad. It should rebound.

But where could it go up to? We can observe that 20-week Simple Moving Average resisted the index three times in a row. Therefore, we can still expect a resistant level at around 20300 given by this SMA.

If the index breaks downwards, the support is at around 17,900, 50% retracement level.

All in all, I think the middle line is pretty strong at the moment and is supporting the index greatly. This week the index should be moving upwards.

And this week will be dominated by the economic data, including GDP in Japan and Europe, as well as CPI in UK and US. On top of that, we have to be extremely careful with any breaking news from Europe.

Important Economic Data this week (2011-11-13)

14-Nov (Monday)
07:50 Japan GDP (QoQ) {Forecast: Change from -0.5% to 1.5%}

15-Nov (Tuesday)
08:30 Australia Reserve Bank's Board November Minutes
15:00 Germany GDP (QoQ) {Forecast: Change from 1.0% to 0.5%}
17:30 UK Consumer Price Index (YoY) {Forecast: Slight drop}
18:00 Euro-Zone GDP (QoQ) {Forecast: Unchanged}
18:00 Germany ZEW Survey {Forecast: More negative}
21:30 US Advance Retail Sales {Forecast: Change from 1.1% to 0.3%}

16-Nov (Wednesday)
Bank of Japan Rate Decision {Forecast: Unchanged}
17:30 UK Jobless Claims Change {Forecast: Increase}
18:00 Euro-Zoe Consumer Price Index {Forecast: Unchanged}
21:30 US Consumer Price Index {Forecast: Slight drop}

18-Nov (Friday)
15:00 Germany Produce Prices {Forecast: Slight drop}
20:00 Canada Consumer Price Index (YoY) {Forecast: Drop from 3.2% to 2.7%}

Optimistic (2011-11-11 Li & Fung analysis)

Its another concern-and-eased news again, leading great volatility in the financial markets... really hard to predict these sudden news.
















Above is the daily chart of Li & Fung (0494.HK). Not too much to say about it, the chart looks pretty obvious.

Since January 2011, the stock price has been beautifully fallen along the orange downwards trending channel. There was even no false breakout.

In late August, we could see a breakout. This breakout was further confirmed by the increased volume. It showed that the bearish trend has ended.

Then, it moved along the red channel, slowly going upwards. It is normal that going up takes more time than plunging.

First resistant is at around 16.2-17, given by both the red up-trend line and the purple Pitchfork.

First support is at around 14, given by the lower Pitchfork line; next one will be at around 12.5, given by the red channel which should be the ultimate support.

My view on this stock is that it would be rising gradually along the red channel and the purple Pitchfork as well.

When the two intersect, if the economic situation allows, it might follow the Pitchfork instead of the red channel. So I am quite optimistic on Li & Fung.

Similar pattern formed (2011-11-10 XAG analysis)

Above is the daily chart of Silver (XAG). Just having reached the resistant level given by both the 50-day Simple Moving Average and 50% retracement level, the price drops a bit and is at around 34 now.

Obviously, an almost-the-same pattern as that in previous upward-trending channel is formed. Does it signal another plunge coming?

If so, 30 will be the first great support.

If not, 35 remains a strong resistance. 39 will be ultimate resistant given by the medium-term down-trend line.

Personally, I believe downward movement is more likely.

Breakdown again? (2011-11-09 VIX analysis)

The daily chart for Volatility Index is shown above. The index seems trying to break downwards again. Currently it has plunged below both the red channel and the green up-trend line, but is still being supported by 61.8% retracement level. If the index rebounds, then 35.5 would be next resistant level.

Further drop in USD (2011-11-08 DXY analysis)

Above is the 4-hour chart of US Dollar Index (DXY). The chart doesn't look too good. It looks like the index would be undergoing a slump in short time.

It probably follows the purple Pitchfork when falling, and together with the trend-lines, we can expect a support at around 75.3 given by the green up-trend line.

For the upside, obviously if the Pitchfork breaks, then the next resistant level will be given by the orange line, which has been acting well pretty well as critical level prediction tool.

Range (2011-11-07 HSI analysis)

Last week was another volatile week. Hang Seng Index jumped and slumped and jumped. Again, these days we must be extremely careful when making any investment decisions, especially derivatives which have even larger volatility.

So news from Europe basically dominates everything in the market now, and I still don't foresee an end on this in near future. Hang Seng Index will continue fluctuating because of the changing news.

Daily chart of HSI:















Daily chart doesn't tell much. Green line is the short-term upwards trending line currently providing support to the index.

As we can see, the next support level will be at around 19,500, and the value will be increasing in a pretty high pace because of the steep slope.

Indeed, 50% retracement level appeared to be a valid resistant to HSI. The index stopped rising at somewhere around this level and dropped. We can still expect it to resist this week, so resistant is at around 20,300.

As usual, the red line is the strong resistant line. This line holds for more than 6 months, and HSI could not break it easily. Therefore, the ultimate medium-term strong resistant is at 20,800.

Weekly chart of HSI:















On weekly chart, we can see that 20-week Simple Moving Average acts as resistant the the index, stopping HSI from surging further.

I drew another fibonacci retracement on this chart. The index is above 38.2% level now, which is around 19,500. This should be a valid support.

Moreover, the median line of the purple Pitchfork is also supporting HSI. So combining with daily chart, 19300-19500 is a quite strong support zone.

For the upside, 20-week SMA continues to be resistant, which is around 20,000. So short-term resistant is around 20000-20300, where the later level is given on daily chart.

20,8oo is ultimate resistant, this level is also suggested by the upper line of pitchfork on weekly chart. Breakout of this level would mean a further surge to more than 21,000-21,500.

All in all, there are quite strong resistances and supports to Hang Seng Index. I think in short-term it will be moving in a range, rather than breaking either side.

Important Economic Data this week (2011-11-06)

9-Nov (Wednesday)
10:00 China Consumer Price Index {Forecast: Drop from 6.1% to 5.4%}

10-Nov (Thursday)
08:30 Australia Unemployment Rate {Forecast: Slight increase}
15:00 Germany Consumer Price Index {Forecast: Unchanged}
17:00 European Central Bank publishes Nov Monthly Report
20:00 Bank of England Asset Purchase Target
20:00 Bank of England Rate Decision {Forecast: Unchanged at 0.50%}

11-Nov (Friday)
21:55 US U. of Michigan Confidence {Forecast: Slight increase}

source: http://www.dailyfx.com

Good view on Euro (2011-11-04 EUR analysis)

Above is the 4-Hour chart of EUR/USD.

Euro probably continues to move up along the orange up-trend channel, given the bullish cross in MACD and a little divergence in Stochastic.

So the next resistant level is at around 1.392. This is the 50% retracement level using the high in 27-Oct and the low at 1-Nov.

Good luck.

Bad bad bad (2011-11-02 VIX analysis)

The VIX looks not good as well. Seems like it is going to boost quite a bit. The news from Greece on whether it would remain in Euros might cause slumps. Bad day is coming.

First post in Nov 2011 (2011-11-01 Gold analysis)

Gold should be following the up-trend Pitchfork and gradually approaches its previous high. Keep an eye on it.

After the crazy rise... (2011-10-31 HSI analysis)

Last week there was good news regarding the European Debt problem, the facilities were expanded. Stock markets surged crazily, including Hang Seng Index. The index finally reached 20,000, since early September.

This week's focus would be on Thursday, depending on how Bernanke comments on the economy. Also there are several unemployment rates to be released this week.

Daily chart of HSI:















After boosting last week, the index reached 50% retracement at around 20,300, and obviously faced huge selling pressure and closed lower, just above 20,000.

It seems like this level has a certain power now, and the index would need some time to break out. Therefore, the index should undergo little correction and drop a bit.

Support is of course 38.2% at around 19,300.

However, if HSI breaks out, the next resistant will be at around 20,600 given by the purple Pitchfork on the graph.

A further resistant is at around 21,400. This is an extremely strong trend-line because the index has been moving below it for a pretty long time.

One thing worth mentioning is that the volume rose last week. This tells us that the surge was not likely to be a false one. Generally we can have better view on the index.

Weekly chart of HSI:















The orange Pitchfork is the usual one used before. We can see that the index just broke out the median line of the Pitchfork. This shows that we could not under-estimate the power of the rise.

Fibonacci retracement is the same as that on daily chart, giving the same support and resistant levels.

Another thing is that MACD and its EMA are touching each other. This is a possibility that a bullish trend will be suggested by the cross-over. But of course be aware of any false signal.

In general, for this week, I carry a more bearish view because of the very quick rise last week. Resistant levels are pretty strong now. So I think it would be trading within 19300 - 20300.

Good luck

Important Economic Data this week (2011-10-30)

31-Oct (Monday)
20:30 Canada GDP (YoY) {Forecast: Slight drop from 2.3% to 2.2%}

1-Nov (Tuesday)
09:00 China PMI Manufacturing {Forecast: Slight rice}
11:30 Reserve Bank of Australia Rate Decision {Forecast: Rise from 4.50% to 4.75}
17:30 UK GDP (YoY) {Forecast: Slight drop from 0.6% to 0.4%}

2-Nov (Wednesday)
16:55 Germany Unemployment Change {Forecast: Less negative}

3-Nov (Thursday)
00:30 US FOMC Rate Decision {Forecast: Unchanged at 0.25%}
02:15 Bernanke Speaks at Fed Press Conference
05:45 New Zealand Unemployment Rate {Forecast: Slight drop}
02:45 European Central Bank Rate Decision {Forecast: Unchanged at 1.50%}

4-Nov (Friday)
19:00 Canada Unemployment Rate {Forecast: Unchanged at 7.10%}
20:30 US Unemployment Rate {Forecast: Unchanged at 9.10%}

source: http://dailyfx.com

Any weakness? (2011-10-27 CCB analysis)

Above is the daily chart of China Construction Bank (0939.HK).

The price just broke out the green down-trend line which lasted for around 5 months. Such breakout signals a strong bullish trend.

Moreover, the orange Pitchfork indicates a more conservative movement prediction for the stock. The breakout of the green line also meant the breakout of the median line of the Pitchfork.

However, there is still one concern. The volume on breakout days didn't raise. This makes me feel bad and think this might be a weak breakout, which could not last long.

Nevertheless, if it drops, the Pitchfork and the down-trend line are considered supports now, which are at around 5.3 and 5.1.

Resistant is at around 5.6, the 38.2% fibonacci retracement level. The purple pitchfork is relatively steeper, we should take it as reference but not rely on it too much.

Any sign of weakness? (2011-10-26 VIX analysis)

It doesn't look like it would break below the lower red line, but the long inverted hammer pattern seemed to be a sign of weakness. Still pretty hard to guess its way.

How US Dollar goes (2011-10-25 DXY analysis)

Watch out of huge movement of US Dollar Index.

Coming is nice week (2011-10-24 HSI analysis)

Good news' coming out from Europe's crisis-management summit. European leaders agreed to outline a plan to help banks, and will discuss whether to expand European Financial Stability Facilities on Wednesday.

Last week basically was dominated by news around Europe debt problem. Hang Seng Index opened high on Monday, but then pared its losses and plunged in following four days.

VIX still has no sign of slumps in low levels. But it is still not at emergent times when volatility index keeps on climbing to new highs.

Let's get back to Hang Seng Index.

Daily chart of HSI:















The red down-trend line is basically how the index has been moving in these few weeks, starting from August 2011.

Last week the index attempted to break this red resistant line, but apparently it failed and fell back below this line, within the red channel.

Buy drawing a fibonacci retracement using the high and low within the red channel, we can see that 38.2% successfully resisted the index two weeks ago, and 23.6% supported the index well last week. These two are probably the important levels to look at in short period.

But in general, it is pretty clueless when looking at the daily chart alone.

Weekly chart of HSI:















The Pitchfork is just the normal one that I was using all time. We could see that last week the index was well supported by the lower line of the fork.

Besides, the 23.6% on this chart might somehow help support the index as well. This results in a pretty large supportive force at this area.

In fact, the index was resisted by the 10-day Simple Moving Average last week which therefore could not surge higher.

Combining the two charts, I somehow have a little bullish view in short-period this week. If the index rises, around 19,500 would be an extremely strong resistant. The index would need some power to break out.

For the down-side, around 18,000 will be a short term support. If the index breaks again, then there would be no immediate support.

Good luck.

Important Economic Data this week (2011-10-23)

24-Oct (Monday)
08:30 Australia Producer Price Index {Forecast: Slight drop}
15:30 Euro-Zone Purchasing Manager Index Composites {Forecast: Slight drop}

25-Oct (Tuesday)
05:45 New Zealand Consumer Prices Index {Forecast: Drop}
21:00 Bank of Canada Rate Decision {Forecast: Unchanged at 1.00%}
22:00 US Consumer Confidence {Forecast: Slight increase}

26-Oct (Wednesday)
08:30 Australia Consumer Prices Index {Forecast: Slight drop}
16:00 ECB Publishes its Bank Lending Survey
20:30 US Durable Goods Orders {Forecast: More negative}
22:00 Canada Monetary Policy Report

27-Oct (Thursday)
Bank of Japan Rate Decision
04:00 Reserve Bank of New Zealand Rate Decision {Forecast: Unchanged}
20:30 US GDP {Forecast: Increase from 1.3% to 2.5%}

28-Oct (Friday)
21:55 U. of Michigan Confidence {Forecast: Slight increase}

source: http://www.dailyfx.com

Regular analysis (2011-10-21 VIX analysis)

Another good "consideration" news successfully reversed losses of US markets and S&P 500 Index closed 0.46% above its previous close.

Hang Seng Index today is quite likely to gain. So it means that the week's HSI was trading above the 50% retracement level as well as the Pitchfork on weekly chart. Will be back to it on next Monday.

Today will be one of my regular analysis: volatility.
















Above is the daily chart of Volatility Index (.VIX). The index is still within the large red trading range after the false breakdown last Friday.

Indeed, if we draw another uptrend line, we can see that last Friday's candlestick was actually supported by this uptrend line, produced using the two troughs at the beginning of the bullish trend.

So it is confirmed to be a false breakdown. But how would the index move next?

Yesterday, a candlestick with very long upper shadow was formed. This indicates that the "buying force" is more or less weakening.

The purple downtrend line shows that VIX is forming lowering peaks (except highest one in late September to early October).

If you have been reading my blog, you probably know that I am quite bearish on volatility. The long-shadow candlestick further enhances my view.

But one concern is that there is a bullish cross, this is kind of scary to me. We have to see whether it would become a whipsaw or not.

Support is given by both the lower boundary of red channel and the green uptrend line, at around 29.20 - 30.

Resistant is at around 36.9, and next one is at around 44. If it happens then there must be something happened in Europe like having no conclusion on rescue plan.

Good luck.

Gambling (2011-10-20 Galaxy Entertainment Group analysis)

Stock markets fluctuate again, due to good news from Apple and bad news from France and Spain. Directions are hard to catch, and good luck to all traders. The news/event-risk is pretty horrible.

Today I will take about one of the companies in a pretty volatile industry these days. This industry is Macao Gaming.
















Above is the daily chart of Galaxy Entertainment Group (0027.HK). I guess most of you should have heard of it, its hotel facilities and casino in Macao are simply amazing.

Back to the chart, this stock has been moving upwards since the last quarter in 2008. Starting from 2010, it snowballed along the orange upwards trending line and reached as high as 22.45 in August 2011.

The stock price broke the orange up-trend line in mid-September when the concerns in Europe appeared to be extremely serious and non-solvable.

However, in early October, the price managed to climb back above this line. This tells us that the overall bullish trend still hasn't ended.

On the other hand, the dropping peaks since August 2011 form another downwards trending line shown in green.

This week, the price broke this green line, showing that its short-term bearish trend may have changed.

Two days ago the price plunged, but was well supported by both the green and orange lines and rebounded yesterday.

We can see a strong buying force when the support was reached. Besides, MACD is heading upwards but it is still below zero. The momentum for further spikes still exists.

Therefore, I have a bullish view on this stock. 50% retracement resisted the stock price, but I think it would soon break. 61.8% is at around 17.2, I think this is the first resistant for the stock.

For the downside, I think 14-14.5 is a strong support zone. Once the price breaks this area and reaches lower, it would probably slump to 12.

Chart speaks (2011-10-18 EUR analysis)

Above is the 4-H chart of EUR/USD.

Trade based on your risk-bearing level. There have pretty strong support to Euros at this moment.

The two charts look good (2011-10-17 HSI analysis)

Led by the excellent Retail Sales data in US, S&P 500 Index (SPX) spiked and closed at 1224.58. This means that the resistant on both daily and weekly chart breaks (~1200-1210). It seems like the volatility analysis dominates and stock markets should start to calm down a bit.

Hang Seng Index did well last week too. It opened at 17,853, reached as high as 18,758 and closed at 18,501.

After the meeting of finance ministers and central bankers from G20 economies in Paris in past weekend, it sounds pretty optimistic regarding helping Europe get out of trouble. Stock markets would probably surge due to this good news today.

Let's see how HSI would move this week.

Daily chart of HSI:















Apparently, the short-term Pitchfork is not a strong resistant after the index falling too low. It now becomes a support but I believe we can hardly use it again.

Hang Seng Index reached the red downward trend line on last Thursday. This line successfully resisted the index and so the index could not rise higher on Friday.

Apart from the red trend-line, around 18,700 is also 38.2% fibonacci level. Going back a bit, we can see that HSI's movement was restricted by this level for a several. We couldn't ignore the power of this level.

Therefore, on daily chart, it suggests a drop in HSI this week. Probably the index would reach around 17,750 which is 10-day Simple Moving Average as well as 23.6% retracement level.

However, if the index breaks 18,700, we could not see good resistant forces in short-term. It may be able to climb up to over 20,000.

Weekly chart of HSI:















I did put the orange Pitchfork last week on weekly chart and claimed that 18,000 would be a strong resistant to the index. So it appeared that I was wrong, and the index just broke this level without any difficulty.

For this week, if the index is moving lower, the support would be at around 17,800 which is provided by both the 61.8% retracement level and the Pitchfork.

Upside would be limited at around 19,500. If HSI reaches this level, it is more likely to slump and consolidate.

These are some levels that we should be aware of. Looking at the bigger picture, I would carry a good view on the index for this week. It could reach around 19,500.