Volatility breakout? (2012-06-27 VIX analysis)

Above is the daily chart of volatility index (VIX). There will be a break soon, we have to keep on looking at whether it is going up or down. Given that there will be loads of economic data coming out next few days, I believe the chance for breaking out would be higher.

I'm going back to Hong Kong tomorrow and therefore I might not be able to update the blog for two days.

Euros moving flat? (2012-06-26 EUR analysis)

Above is the 4-hour chart of EUR/USD. Looks like it is currently under a down-trend channel, but probably it would move sideways for a while since RSI has already dropped to a very low level.

Doing nothing might be the best thing to do (2012-06-25 HSI analysis)

Last week there wasn't much happening, the stock markets just went up and down. Asian markets plunged on Friday but US markets closed higher, so Asian markets today should be opening high, which means that the indexes basically move sideways last week.

Commodities experienced a big plummet on Thursday, Oil and Gold prices dropped greatly. As posted, gold price had already plunged through the lower bound of the flag, but still one more day is needed to confirmed its break down (though it is quite likely).

This week there will be quite a lot of data coming out, including CPI, unemployment rates and GDPs. Especially on Asian's Friday and US's Thursday, the markets is expected to fluctuate quite a lot.

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


Daily chart of HSI:
 














HSI is still pretty much following the Pitchfork. It was supported well by the mid-line last Friday. The lower red-line seems to be less powerful than it looks like.

As mentioned, the index is expected to open high today. So it looks like it could remain above the mid-line and would go up a bit again.

There isn't much to tell from daily chart, but keep in mind that if the index breaks below the level of around 18900 (which is a decreasing support), it could easily plunges to below 18000, at the lower line of the Pitchfork.


Weekly chart of HSI:

Same as last week, the index is still moving between the two boundaries, shown in red and green. These two indicate its ultimate support and resistant.

HSI has just been resisted by the 38.2% Fibonacci level plus 10-week Simple Moving Average, but still as these are expected to be a weaker resistant, it is hard to tell whether the index would go up or down.

Also, we can see that it is exactly at the middle of the two boundaries. Buying or selling both has a pretty high risk. Therefore, I would suggest keeping away from the market for a while before everything is clear enough.

Important Economic data this week (2012-06-24)

25-Jun (Monday)
14:00 Germany GfK Consumer Confidence Survey


26-Jun (Tuesday)
22:00 US Consumer Confidence

27-Jun (Wednesday)
20:00 Germany CPI {Forecast: Slight drop}
20:30 US Durable Goods Orders {Forecast: Increase to 0.5% from 0.2%}


28-Jun (Thursday)
15:55 Germany Unemployment Rate {Forecast: Unchanged}
16:30 UK GDP {Forecast: Unchanged}
20:30 US GDP {Forecast: Unchanged}

29-Jun (Friday)
20:30 Canada GDP {Forecast: Increase to 1.9% from 1.6%}
21:55 US U. of Michigan Confidence {Forecast: Unchanged}

Time Zone: GMT +8 (HKT)
Source: http://dailyfx.com

Second test ? (2012-06-22 DXY analysis)

Above is the daily chart of US Dollar Index (.DXY). The index has reached the target level estimated by the flag breakout, and now it is going to test again this level. Personally, DXY should be resisted by this level again and starts dropping. The green level gives a very strong support to the index.

Flag breakout/down? (2012-06-21 Gold analysis)

Above is the daily chart of Gold. We can see that it is currently moving in a flag shape, and it looks like it is going to break one side very soon. The support and resistant levels are indicated on the chart. Let's keep an eye on it.

False or true break down? (2012-06-20 VIX analysis)

Above is the daily chart of volatility index (VIX). Given the movement in MACD and RSI, the index looks like that it would surge and go back within the diverging flag, which means that the volatility would increase. But still we would need the index to close within the flag to confirm that the break down is a false one.

Would it break out ? (2012-06-18 HSI analysis)

Last week due to the many different news, the global stock markets were just fluctuating quite a lot. One day stimulus speculation brought the markets upwards, and another day debt concerns pulled the markets downwards. Overall, markets surged last week, mainly due to the big rise on Friday.

Gold kept on rising last week, with four consecutive days of upward movement. But silver did not follow this trend, it moved pretty much sideways. GBP broke out the flag as I mentioned, and surged greatly last Friday.

The most important expected news this week would be Fed's speech this coming Thursday (GMT+8, which is Wednesday in US/Europe). We would have to see what they are going to say about US's economy. Other expected economic data would have little effect on the stock markets.

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

Daily chart of HSI:
 















As I have mentioned last Monday, the resistant was at around 19200. Last Friday, the index has reached this level and closed at about the resistant line.

This level is treated as a quite strong resistant. However, given the big surge in US last Friday, whether the index will just break out is still unknown.

From my point of view, the market in general is still bearish. Normal news is not powerful enough to lead HSI to break out. So I would expect the index to drop after reaching this resistant level. If so, first support would be at 18700 which is the simple moving averages. They are not too strong as usual, stronger support is found at 18000.

On the other hand, if the index surges above the middle line, the next resistant would be at the upper line of Pitchfork. The level is at around 19950, and this level is dropping.


Weekly chart of HSI:

Weekly chart doesn't tell much. It only gives the same bound as mentioned last week. The fluctuating in between is quite unpredictable.

Good luck.

Important Economic Data this week (2012-06-17)

18-Jun (Monday)
13:00 Bank of Japan Monthly Economic Report

19-Jun (Tuesday)
09:30 Australia Reserve Bank Board June Minutes
16:30 UK CPI {Forecast: Unchanged}
17:00 Germany ZEW Survey (Economic Sentiment) {Forecast: Drop}

20-Jun (Wednesday)
07:50 Bank of Japan to Publish Minutes of May 22-23 Board Meeting
14:00 Germany Producer Prices {Forecast: Drop to 2.2% from 2.4%}
16:30 Bank of England Minutes
16:30 UK Jobless Claims Change {Forecast: Rise from -13.7K to -3.0K}

21-Jun (Thursday)
00:30 US FOMC Rate Decision {Forecast: Unchanged}
02:00 US FOMC to Release Projections of Economy and Fed Funds Rate
02:15 US Fed's Bernanke Holds Press Conference
06:45 New Zealand GDP {Forecast: Rise to 0.4% from 0.3%}

22-Jun (Friday)
20:30 Canada Consumer Price Index {Forecast: Drop to 1.5% from 2.0%}


Time Zone: GMT +8 (HKT)
Source: http://dailyfx.com

Up or down? (2012-06-14 Gold analysis)

Above is the daily chart of Gold (XAU=). It is now at the critical point that determines whether the gold price is going bullish or bearish in near future. We have to keep an eye on it.

Possible flag breakout (2012-06-13 GBP analysis)

Above is the 4-hour chart of the British Pounds (GBP=). It seems like its bearish trend has come to an end and the price is going to move upwards. However, this only happens when the break out is confirmed. So if the price closes above the flag at next candle, then we can confirm its bullish trend.

Rising volatility (2012-06-12 VIX analysis)

Above is the daily chart of volatility index (VIX). The index should be moving upwards within the diverging flag, and the trading range would be widening. But in general, a bullish movement is expected on the index. Watch out of any big plunges in stock markets.

Big rebound and resisted? (2012-06-11 HSI analysis)

Thanks to Spain bailout, the world global markets surged greatly at the end of last week, and this trend would probably continue at least at the beginning of this week. Hang Seng Index (HSI) basically moved flat last week, but given the big surge in US last Friday, HSI would follow the surge today first.

Commodities prices slumped last week given the strengthened US Dollar. This week probably it would gain due to weakened US Dollar.

This week there is not much important economic news which can affect stock markets. There are CPIs being released but they have effect on FX market more than on equity markets.


Daily chart of HSI:
 















On daily chart, the index finally got back into the Pitchfork. Given that today the index would rise, we can confirm that it has safely  maintained above the lower line.

This means that the index would have a short-term rise till the middle line of the Pitchfork. The resistant level is at around 19200. This would be a strong resistant given not only by the Pitchfork but also the red down-trend line.

After reaching 19200, the index should probably fall again, unless there is another big good news supporting the world stock markets. But it seems like one of the biggest good news has been released last week and that there could not be so many critical good news.

Weekly chart of HSI:

On weekly chart, there isn't much to get. The index did not reach the green up-trend strong support line, and it is now in the middle of the flag.

The only thing we know now is that the trading range is narrowing. There would be someday that it will break out and move in one direction. We have to keep track of this in order to profit from this known fact.

Also, bear in mind that strong support is at 17400-17800 (rising), and resistant is at around 20600 (dropping). These two levels have to be updated every week.

Good luck to all of you.

Important Economic Data this week (2012-06-10)

13-Jun (Wednesday)
14:00 Germany CPI {Forecast: Unchanged}
20:30 US Advance Retail Sales {Forecast: Drop to -0.2% from 0.1%}

14-Jun (Thursday)
05:00 Reserve Bank of New Zealand Rate Decision {Forecast: Unchanged}
15:30 Swiss National Bank Rate Decision {Forecast: Unchanged}
17:00 Euro-Zone CPI {Forecast: Unchanged}
20:30 US CPI {Forecast: Drop to 1.9% from 2.3%}

15-Jun (Friday)
Bank of Japan Rate Decision
16:30 UK Visible Trade Balance
21:55 U. of Michigan  Confidence {Forecast: Drop}

Time Zone: GMT +8 (HKT)
Source: http://dailyfx.com

Further breakout (2012-06-08 EUR analysis)

Above is the 4-hour chart of EUR/USD. After breakout of the down-trend channel, which has been confirmed on this chart, the Euros should be moving under bullish trend. It is currently at the green short-term support level, and looks like it would be going to break out the resistant zone.

Rest after big surge (2012-06-07 Gold analysis)

Above is the daily chart of Gold (XAU=). After a very strong surge, it seems like the price has met its resistant and could not break out. It might take some rest, going flat or slightly downwards, before another crazy rise.

Calm down for a while (2012-06-05 VIX analysis)

Above is the daily chart of Volatility Index (.VIX). The index is more-or-less under bullish trend but it seems it would take a few-day rest, before further surging.

Plunging to the support (2012-06-04 HSI analysis)

Finally all my exams (both school and open exams) are over and now I have more time to keep track of the financial markets and do analysis.

Last week there weren't big movements until Friday where US and Europe markets plunged hardly due to the job data.  Hang Seng Index (HSI) is expected to follow and plummet as soon as the market opens.

This week there will be a lot of GDPs and unemployment rates coming out. More important ones that have significant effect on Hong Kong market might be Euro-zone GDP on Wednesday and Japan GDP on Thursday.

Let's see this week HSI.


Daily chart of HSI:
 


















The index plunged below the Pitchfork, and was not able to get back within it after trying hard last week.  We can treat this as an even more bearish signal.

Below the Pitchfork, still, we could not find a valid support on daily chart. This tells us that the index still has room for plunging.

Other than the above information, it seems like the chart is not telling us anything more.


Weekly chart of HSI:

Weekly chart is more informative in terms of suggesting a good support level. The lower red line is a longer up-trend line which provides strong support at around 17450 (it was 17400 at the beginning of last week).

Also, the Fibonacci level is going to support the index at around 17800. Therefore, we can continue to expect a strong support zone at 17450-17800. We can take LONG positions at this level with quite little risk.

For the upside, there is slight resistant at 19500. But given the investment atmosphere these days, I believe this level can hardly be reached in short time.

Good luck.

Important Economic Data this week (2012-06-03)

5-Jun (Tuesday)
12:30 Reserve Bank of Australia Rate {Forecast: Drop to 3.5% from 3.75%}
17:00 Euro-Zone Retail Sales {Forecast: Drop to -1.1% from -0.2%}
21:00 Bank of Canada Rate Decision {Forecast: Unchanged}


6-Jun (Wednesday)
09:30 Australia GDP (YoY) {Forecast: Rise to 3.2% from 2.3%}
17:00 Euro-Zone GDP (YoY) {Forecast: Unchanged}
19:45 European Central Bank Rate Decision {Forecast: Unchanged at 1%}

7-Jun (Thursday)
02:00 US Fed Releases Beige Book Economic Survey
09:30 Australia Unemployment Rate {Forecast: Rise to 5.1% from 4.9%}
13:45 Switzerland Unemployment Rate {Forecast: Drop to 3.0% from 3.1%}
19:00 Bank of England Rate Decision {Forecast: Unchanged}

8-Jun (Friday)
07:30 Japan GDP {Forecast: Rise to 4.5% from 4.1%}
20:30 Canada Unemployment Rate {Forecast: Unchanged}

9-Jun (Saturday)
09:30 China CPI {Forecast: Drop to 3.2% from 3.4%}


Time Zone: GMT +8 (HKT)
source: http://www.dailyfx.com