Important Economic Data this week (2011-09-11)

13-September (Tuesday)
16:30 UK CPI (YoY) {Forecast: Slight increase from 4.4% to 4.5%}

14-September (Wednesday)
16:30 UK Jobless Claims Change {Forecast: Drop from 37.1K to 32.0K}
20:30 US Advance Retail Sales {Forecast: Drop from 0.5% to 0.2%}

15-September (Thursday)
05:00 Reserve Bank of New Zealand Rate Decision {Forecast: Unchanged at 2.50%}
15:30 Swiss National Bank Rate Decision {Forecast: Unchanged at 0%}
16:00 ECB Publishes Sept. Monthly Report
17:00 Euro-Zone CPI (YoY)
20:30 US CPI (YoY) {Forecast: Unchanged at 3.6%}

16-September (Friday)
21:55 US U. of Michigan Confidence {Forecast: Slight rise}

Wait for breakout (2011-09-09 GBP/USD analysis)

So 361 Degrees which I wrote yesterday morning surged over 4% yesterday, and technically it broke the resistant already. If it stays above the red line today, then break out could be confirmed and we should further BUY this stock.

Today let's see Forex.
















Above is the 4-Hour chart of GBP/USD. Since mid-August, sterling has been moving under downwards channel, pared the gains it got due to the extremely weak USD.

The pounds reached around 1.662 in mid-August, and plunged to around 1.591 this week, probably due to CHF pegging to EUR.

So what we could find on the chart is that the 20 Simple Moving Average was acting quite well to resist the price of sterling. GBP tried three times and failed to break out.

However, interestingly, this bullish force was getting stronger. In each trial, sterling was getting above the SMA more than that in previous trial. Though it still failed, I expect that it would be almost time for break out.

Secondly, 1.591 seems to be a very strong supporting level. The price retested this level just a short period after the first test in September, and this level still stood. This might indicate bottoming of GBP.

Thirdly, MACD and its EMA showed a bullish cross few hours ago. MACD has been sliding for long time and is currently at very low level. This cross might help MACD surge which signals boost of sterling as well.

So currently GBP is being resisted by the 10-SMA. What we have to do now is to wait until it breaks out again the 10-SMA (which should not be a problem), and we can LONG GBP.

20-SMA is the next resistant (at around 1.60). But as I predict break out of 20-SMA too, target should be 50-SMA instead (at around 1.614).

For the downside, break down of the previous low (1.591) would mean GBP continuing its bearish trend and would reach its previous low in July at 1.578.

Climbing and breakout? (2011-09-08 361 Degrees analysis)

Above is the daily chart of 361 Degrees (1361.HK). The group mainly focuses on manufacturing and sales of sporting goods.

After climbing as high as 8.10 in September 2010, the stock price just kept on sliding and reached as low as 2.91 in August 2011.

As shown on the chart, 361 Degrees was moving along the red down-trend line, and could not break this line. We can treat the line as a medium term resistant to the price.

Currently the stock price reached this line again. Starting from August 2011, this stock was boosting and showed a strong bullish trend. Could this short-term bullish trend lead the stock to undergo a medium term bullish trend?

The answer would be given shortly by the price. These few days we have to keep watching this and see whether it will break the red resistant or not.

If break out confirms, then the price would be up to around 5.64, which is 161.8% retracement level. This means around $1 profits.

First support is provided by the Pitchfork at around 4.26, and the next one would be 61.8% retracement level (which is around 3.95).

Consolidation of volatility (2011-09-07 VIX analysis)

Yesterday Hang Seng Index was well supported at the level of 19,300, and bounced greatly for around 400 points. What an interesting big V shape! So we still have to keep an eye on this level.

Daily chart of Volatility Index (.VIX):















Obviously, with such volatile markets last few days, the index jumped again and closed above all the shown Simple Moving Averages.

The red line and green line represent current short-term trend of the index. Both are moving downward.

Green line gives support to VIX at around 30 while red line resists the index at around 40. This is expected to be the range for VIX (i.e. 30-40).

Yet, MACD crossed its EMA from above last week, which was a bearish cross. And currently they are both plunging. We can anticipate that the VIX could hardly break the red resistant. Consolidation is more likely this time.

But, the index is still above 30. The stock markets won't just move sideways. It is expected that the equity markets would be fluctuating for 1-2% every trading day, so the volatility index won't get above 40 and below 30.

Changes would happen if VIX breaks either side.

Still bearish (2011-09-05 HSI analysis)

Last week the general stock markets' movements were quite hard to predict. Firstly, the market rose in the beginning of the week; and then, when people started thinking about buying, the indexes just plunged. HSI opened at 19,883 on Monday, boosted to as high as just below 21,000 on Thursday, and closed at 20,212 on Friday.

This week of course it would be an event or news-driven week. As shown in my previous thread, there would be 5 major rate decisions, several unemployment rates, CPI and GDP data coming out. Therefore, the stock market movements this week could be extremely volatile, especially when we expect that each news could bring huge influence on the markets.

While its hard to predict by forecasting all those economic data, technical analysis can help a lot. We can keep an eye on those critical levels.

Daily chart of Hang Seng Index (.HSI):

Apparently last week HSI once broke the middle line of Andrew's Pitchfork. On Thursday, the index touched the red down-trend line which appeared to be a strong resistant, and plunged.

On Friday, the index got back below the middle line. It seems like HSI still doesn't have enough power to break out.

Apart from the red down-trend line, the 50-day Simple Moving Average was another strong resistant too. This was shown with HSI opened at that level but was then pushed lower, and closed below the SMA.

The index will probably fill the gap on last Tuesday first, and may retreat lower. It still needs some more time to gain momentum for breaking above the resistances.

Weekly chart of Hang Seng Index (.HSI):

Weekly chart gives a clearer picture again. The resistant-force given by the red resistant line is the same as the daily chart (of course..).

However, we can see another interesting resistant: Pitchfork. The index tried to surge above the middle line of pitchfork, but obviously it failed and pare its gain and got back below the line.

I expect this week HSI would go down, given that the index had already tried so hard to break out last time. Bullish power gets weaker and bearish power would dominate this week.

So pitchfork is of course one of the most important levels to watch out. The lower line is currently at 18,400. There would be strong support at this point.

Before that, the short-term up-trend line which supported the two previous lows will give support at around 19,300. If this level breaks, HSI will drop to 18,400.

For the upside, the red up-trend line still gives vital resistant at the level of around 20,900. If the index breaks out, the previous gap in late July 2011 will probably be filled, and the next resistant level is at top line of Pitchfork: around 22,000.

Again, given such poor economic conditions worldwide, I carry pessimistic views on the coming economic data. My view is still bearish on the stock markets.

Important Economic Data this week (2011-09-04)

5-Sept (Monday)
17:00 Euro-Zone Retail Sales {Forecast: More negative}

6-Sept (Tuesday)
12:30 Reserve Bank of Australia Rate Decision {Forecast: Unchanged at 4.75%}
15:15 Switzerland CPI {Forecast: Lower}
17:00 Euro-Zone GDP (YoY) {Forecast: Unchanged}

7-Sept (Wednesday)
Bank of Japan Rate Decision {Forecast: Unchanged}
09:30 Australia GDP (YoY) {Forecast: Dropped}
09:30 Australia GDP (QoQ) {Forecast: From negative to positive}
21:00 Bank of Canada Rate Decision {Forecast: Unchanged at 1%}

8-Sept (Thursday)
09:30 Australia Unemployment Rate {Forecast: Unchanged}
13:45 Switzerland Unemployment Rate {Forecast: Unchanged}
19:00 Bank of England Rate Decision {Forecast: Unchanged at 0.50%}
19:45 European Central Bank Rate Decision {Forecast: Unchanged at 1.50%}

9-Sept (Friday)
07:50 Japany GDP (QoQ) {Forecast: More negative}
10:00 China CPI (YoY) {Forecast: Slight drop}
14:00 Germany CPI (YoY)
19:00 Canada Unemployment Rate {Forecast: Slight increase}

source: http://dailyfx.com

Two resistants (2011-09-01 DXY analysis)

Above is the daily chart of US Dollar Index (.DXY). We can see that the index just broke out the green down-trend line.

This might be due to the fact that European Financial Stability Facility is currently under pressure and it will take some time before any important decisions are made.

Back to the chart, after breaking out, the index will try to surge further.

I have identified two possible resistant-force providers:
The first one is the horizontal zone ranged from around 76.0 to 76.4. This area has been resisting the index for several times, and thus its power should not be underestimated.

The second resistant is the red up-trend line. This is relatively weaker than the resistant area mentioned above, but we have to be aware of the level 75.5 currently, and will reach the resistance area later on.

Therefore, I expect that the index will be continue moving upward, but it should be processing slowly. Then some day in Mid-September, the two resistant will meet and the selling force should be even larger.