Break out? (2012-01-31 Gold analysis)

Above is the weekly chart of Gold (XAU=). The price broke out the wedge last week and is expected to move higher in medium term, but it might drop a bit in these few days because of reaching the first significant retracement level.

My view on gold turns to bullish now. Things keep on changing these days.

Crucial Week (2012-01-30 HSI analysis)

Happy Lunar New Year everyone. This is the year of Dragon and wish you all a great year.

After the new year vacation, stock markets kept on surging and Hang Seng Index surged to more than 20500. US market dropped last Friday, with DJIA closed 0.58% lower.

There are not much important economic data released this week, so we won't expect huge fluctuation in equity markets due to these data. But still we have to be careful of any breaking news from Europe about sovereign debts.

Let's see this week's Hang Seng Index (.HSI)

Daily chart of HSI:















The index has been rising quite a lot these days. We can see that the index reached 20500 from 19000 within only few trading days. This might perhaps be due to the holiday atmosphere and the less bad news coming from Europe.

Nonetheless, the index broke out the support at around 20,200. The upper bound of the trading range is at 21,000. The bound is pretty wide actually.

Therefore, we can expect a resistant force at the level of 20,200. This might not be a very strong one because of the too-much surge in such a short period.

We have to be careful of any false breakout and HSI might pare its gains.

Weekly chart of HSI:















There is a significant breakthrough on weekly chart. Last week two-day-only candle successfully surged over the upper line of the purple Pitchfork.

As the index has been moving within this pitchfork for quite a while, any breakouts of it can be treated very seriously.

This is only the first candle going above the Pitchfork, so we will still need 1-2 weeks to further observe and hence decide whether it is false or not.

If the break out is confirmed, the next resistant will be at 21,500 which is 1000 points from now. The original bearish trend is reversed and we should further assess the big picture.

If we confirm that the break out is false, there will be a support at 19500, this only works in at most 2 weeks because the decreasing Pitchfork will keep on pushing the index to lower levels.

We can expect the index to get back to 18500 or even 18000 if the breakout turns out to be a small one.

This week is pretty crucial to let us decide under what trend the index is moving.

Important Economic Data this week (2012-01-29)

30-Jan (Monday)
21:30 US Personal Consumption Expenditure Core

31-Jan (Tuesday)
Germany Consumer Price Index
16:55 Germany Unemployment Rate
21:30 Canada GDP (MoM) {Forecast: Slight increase}

1-Feb (Wednesday)
09:00 China PMI Manufacturing {Forecast: Slight drop}
23:00 US ISM Manufacturing {Forecast: Slight increase}

2-Feb (Thursday)
18:00 Euro-Zone Product Price Index {Forecast: Drop from 5.3% to 4.3%}
23:00 US Fed's Bernanke Testifies before House Budget Committee

3-Feb (Friday)
18:00 Euro-Zone Retail Sales (YoY) {Forecast: Rise from -2.5% to -1.3%}
20:00 Canada Unemployment Rate {Forecast: Unchanged}
21:30 US Change in Non-farm Payrolls {Forecast: Drop from 200K to 150K}
21:30 US Unemployment Rate {Forecast: Unchanged}

Dropping volatility (2012-01-19 VIX analysis)

The volatility keeps on moving sideways at a pretty low level. It failed to break out the 10-day and 20-day Simple Moving Averages and may move even lower.

Be aware of any possible break down of the previous low.

Is it going to break out ? (2012-01-18 EUR analysis)

Above is the 4-Hour chart of EUR/USD. It seems like if Euro is able to break out the downward trending red line, it will start to gain along the purple Pitchfork.

Let's wait for a break out.

Another drop for Gold (2012-01-17 Gold analysis)

It should be time for gold to stop its crazy surge and drop a bit.

Very short-term bullish (2012-01-16 HSI analysis)

Last week was a great week for Hang Seng Index. The index opened at 18588, reached highest of 19261 and closed at 19204. There was around 600 points rise in the week.

Though on Friday France was downgraded from AAA to AA+ by S&P and Euro plunged, the stock market was very slightly impacted by this news and after the weekend we would expect an even weaker influence on Hong Kong market.

There will be quite a lot of economic data revealed this week, and a few more important ones are expected to harm the stock markets, such as drop in China Real GDP and rise in UK Jobless Claims.

Let's see this week's Hang Seng Index (.HSI).

Daily chart of HSI:















After breaking out the orange down-trend line, we can somehow confirm a short-term upwards trending for Hang Seng Index.

This movement is indicated by the purple Pitchfork which did successfully support the index with its lower boundary.

A resistant is at around 19500 given by the 50% retracement level, but it is expected to be a weak one. A stronger resistant is at 20300.

For the downside, support is at 19000, which is around 200 points from now.

Weekly chart of HSI:















Last week the index successfully broke out the median line of the purple pitchfork. Though the fork is declining, we can somehow expect a short-term upwards trend due to the momentum.

38.2% retracement at around 19500-19600 looks very weak and that the index should break it without much difficulty. This is the same as the situation on daily chart.

Resistant by the upper boundary of the pitchfork is at 20000. This is expected to be a very strong resistant and that the index could hardly break it.

Therefore, for this week HSI is more likely to first surge and then reach 20000 and then starts to drop along this pitchfork again.

Overall trend is still pretty bearish to the index.

Important Economic data this week (2012-01-15)

17-Jan (Tuesday)
10:00 China Real GDP (YoY) {Forecast: Drop to 8.7% from 9.1%}
17:30 UK Consumer Price Index {Forecast: Drop to 4.2% from 4.8%}
18:00 Euro-Zone Consumer Price Index {Forecast: Drop to 2.8% from 3.0%}
18:00 Germany ZEW Survey (Economic Sentiment)
22:00 Bank of Canada Rate Decision {Forecast: Unchanged}

18-Jan (Wednesday)
17:30 UK Jobless Claims Change {Forecast: Increase to 7.0K from 3.0K}

19-Jan (Thursday)
05:45 New Zealand Consumer Prices Index {Forecast: Drop to 2.6% from 4.6%}
08:30 Australia Unemployment Rate {Forecast: Unchanged}
17:00 European Central Bank publishes Jan monthly report
21:30 US Consumer Price Index {Forecast: Drop to 3.1% from 3.4%}

20-Jan (Friday)
15:00 Germany Producer Prices {Forecast: Drop to 4.6% from 5.2%}
20:00 Canada Consumer Price Index {Forecast: Slight drop}

Bearish China market (2012-01-13 SSEC analysis)

Daily chart of Shanghai Composite Index (.SSEC):















Clearly it has just reached the first resistant line inside its channel. We have to further observe whether it will break out or it is going to drop.

Weekly chart of SSEC:















After looking at the weekly chart, it seems like the index is still at bearish trend. Trend reversal happens only when there is a breakout of the red channel.

Target is given by the fibonacci projection on the chart. The levels are supports as well.

Rebound and further slump (2012-01-12 Gold analysis)

Above is the daily chart of Gold price (XAU=). It seems like it is going to break out the purple Pitchfork (yet to be confirmed).

If so, the red down-trend line will be the next resistant which the gold price could hardly break. Then it will continue its bearish trend.

Gradual rise ? (2012-01-11 2866.HK analysis)

Above is the daily chart of CSCL (2866.HK). In this kind of highly-volatile market, this stock seems to have quite good potential for gradual rise.

Volatility break out? (2012-01-10 VIX analysis)

Above is the daily chart of volatility index. We can see that the index has reached the target level estimated using the orange flag.

We might expect a break out of the red channel in days.

Uncertain week (2012-01-09 HSI analysis)

The first week of 2012 was not-too-good not-too-bad. Hang Seng Index opened high but then it pared gains and closed somewhere near its previous close.

This week there are not many influential economic data coming out. The meeting between Angela Merkel and Sarkozy today should be going to affect the stock markets greatly. It is publicly expected that they would come up with some positive measures, or at least promises.

Let's see this week's HSI.

Daily chart of HSI:















I could say it is kind of messy on daily chart. The index turned out not to breaking out or down the flag, and now it is bounded somehow by both lines.

Last week it tried to break the red up-trend line, but at the end it closed below this line. It seems like it is still being strongly resisted.

On the other hand, HSI was kind of supported by the green down-trend line and also the three simple moving averages. Besides trying to find another indicator, I drew a Pitchfork. This will be giving us hints about how HSI will move if the index is trying to go up.

I would conclude that the index is within an uncertainty zone right now. Upper and lower bounds are narrowing, and there is no large force bringing it to surge or slump.

Short-term risk to trade is pretty high as we can hardly predict its movement.

Weekly chart of HSI:















Hang Seng Index tried to break out the median line of Pitchfork last week, but obviously it failed.

It remains at the narrowing range from 17800-18500. This bound is still expected to work and the index might still be within this range this week.

We would have to further observe when it is going to break out or down for possible trend reversal or trend continuation.

Therefore, it might be a good choice not to participate this week to further confirm the trend.

Important Economic Data this week (2012-01-08)

9-Jan (Monday)
China Consumer Price Index {Forecast: Slight drop}
14:45 Switzerland Unemployment Rate {Forecast: Slight rise}

11-Jan (Wednesday)
16:00 Germany Real GDP Growth {Forecast: Drop from 3.6% to 3.0%}

12-Jan (Thursday)
03:00 US Fed's Beige Book
15:00 Germany Consumer Price Index {Forecast: Unchanged}
20:00 UK Bank of England Rate Decision {Forecast: Unchanged}
20:45 European Central Bank Rate Decision {Forecast: Unchanged}
21:30 US Advance Retail Sales {Forecast: Unchanged}

13-Jan (Friday)
China Real GDP, Retail Sales
17:30 UK Producer Price Index
22:55 US U. of Michigan Confidence {Forecast: Slight rise}

source: http://www.dailyfx.com

Keep on dropping (2012-01-05 XAU analysis)

Above is the daily chart of Gold (XAU=). The price is having a bit rebound now but it is expected to drop further as it has reached a strong resistant zone.

The movement will be limited by the purple Pitchfork; therefore, the plunge won't be in a sudden but pretty gently instead.

Weak support is at around 1560 and strong support is found at 1515. As mentioned last time, the target level estimated by the flag breakdown is around 1320.

Gold seems to be not a good tool to invest in unless you are going to short it.

Wait for further surge (2012-01-04 GBP/USD analysis)

Above is the 4-H chart of GBP/USD. A strong resistant zone is found at around 1.572-1.577.

On the other hand, the price should be following the purple Pitchfork. Therefore, the support is at around 1.563 currently, and the level is rising sharply too.

Stochastic lines show a bearish cross. GBP probably stops surging and calms down for a while. We should be aware of 1.563 and see whether it would further rocket after reaching this level.

First week of 2012! (2012-01-03 HSI analysis)

Happy New Year to all of you. Wish you all a great and happy 2012.

Hang Seng Index closed at 18,434 at the end of 2011, high and low in the year are 24,468 and 16,170 respectively. In general, the index dropped around 4,000 points in 2011 due to the Europe debt crisis.

Situation is not very improved up till now. There are still no concrete measures to solve the problems. 2012 predicted to be another tough year, not to forget the myth that the world will end in Dec-2012.

Anyway, let's take a look at HSI charts though they are not very different from last week's.

Daily chart of HSI:















Hang Seng Index dropped below the lower red line again in the last two trading days in 2011. However, it should not be treated a formal break down as it was almost at the end of the flag.

Nevertheless, the lower red line has become a resistant and there is a very short-term support given by the green line. The short-term trading range is 18000-18500.

MACD is getting flat, but there isn't much hints given by it.

Let's move on to weekly chart.

Weekly chart of HSI:















As shown in the chart, after reaching the strong resistant level last week, the index plunged. This level was given by 10-week and 20-week Simple Moving Averages as well as the median line of Pitchfork, so it was quite strong.

Next support will be at around 17,800 given by 50% retracement level. This level has been successful in supporting HSI for a few times.

If the index breaks even lower, ultimate support will be at 16,700. This is a very strong support as the index has been above the green for a long time.

For upside, there is still strong resistant at around 18,600. It is still considered a big obstacle to the index.

It seems like the index will be moving sideways to start off 2012.