Indices

[Caseynotes]

So after a promising 8:00 am London open 1 hour bull bar a slow steady drift back down for Dow, Dax and FTSE. Wondering if FTSE might respond to a trendline of rather dubious quality. 

I hour charts >

[Caseynotes]

Another big sell off inspired by the US session again yesterday with patient recovery during the APAC session. FTSE least affected and nearing the top of range.

Difficult to call whether this 3 bar rally is just a short term retracement before a move to test the lows or a reversal back towards Wednesday's highs. The Euro open at 7:00 may give a hint but the London open at 8:00 should decide it.

 

[Caseynotes]

The morning session saw a trip down for Dax to retest 11487 while Dow went sideways, Dax now returning to 11623 as Dow attempts to break up through 25500 which was a support level on Wednesday. So the US session again looks poised to go higher but the story this week has been for the US open to push lower.

[Caseynotes]

Week end and a look back over the daily charts the Dow looks corrective rather than bearish after the recent refusal to go through the highs while the trade dispute is unresolved.

They have all gone into consolidation with strong support while waiting for new news to determine next direction.

The recently announced new up coming trade talks were put on hold during the week with China refusing to consider making any concessions. Meanwhile reports continue out of China of retail sales being badly hit in large markets such as new car sales and property sales with some new build apartments seeing a 30% price drop. Bloomberg reported during the week on the devastation to retail traders in China's stock market quoting an average loss per trader of 100,000 Yuan (around $15,000). China has run out of ammunition for tariff retaliation and Trump looks happy to continue playing the waiting game.

[Caseynotes]

Early signs indicating a day for testing resistance following the Nikkei lead upward. FTSE has the least distance to travel with the recent short term high at 7095 while Dax has the 11690 to get through before 11851.

[Mercury]

All the major indices, including Nikkei, seem to be at consolidation and turn points to me, if the final leg up thesis is valid.  Looking for the first time for a while at the DAX, which I don't usually trade, I noticed a potential Pennant/Triangle formation, which has just touched the bottom line and bounced away.  A breakout of the upper line would confirm another leg up but a spec trade at the bounce is also a decent low risk entry.  A break through the bottom line would be bearish and suggest the final top is in before the greatest Short of our life times.  For now I am leaning towards a final leg up scenario unless or until proven otherwise.  Close stops and tight money management is required more than ever if this is in fact the end game of the Central Bank bubble.

 

 

[Caseynotes]

Ohhh, spooky. Comparison S&P charts, October 1987 (the week before 'Black Monday') and the current chart.

https://www.ccmmarketmodel.com/short-takes/2018/10/21/1987-crash-vs-2018-setup

Also has a 50 min vid but I didn't watch (too scared).

[Caseynotes]

Worth remembering that the earnings releases of these huge companies this week affects not only their own stock price but can have a sudden impact on index they are listed on as well, especially the Dax and Dow with only 30 constituents.  

https://www.dividendmax.com/market-index-constituents/dow-jones-30

 

[Caseynotes]

As expected yesterday the indices went looking for resistance and finding it at the short term highs when price fell back to settle near the starting point. Looking at the charts last night it seemed obvious that the next move would be to retest the lows so was a little annoyed to find this morning that they had already done it with Dax dropping 90 tick in the early hours. The down side may not be over yet though as Dow is still reaching and Nikkei has pushed through it's orange daily support level.  >> 

[Guest PandaFace]

I would have suspected we’d be seeing some good movement on the upside of late, but it looks like it’s not really pulling through. 

Maybe earnings this week will help, but I certainly wouldn’t be playing with large stops! 

[trade247]

If the dow goes this is a short all the way down to 24000 I would have thought, but I'd be taking profit at 24500 and 24250, with 10% holding down to 24100.

[Caseynotes]

Another push down in the Dax having broken down through 11396 (orange) then double tapped the underside as retest.

[Mercury]

Personally I think the Dax is sending the wrong signals, it is prone to volatility.  The US large Caps, and maybe particularly the Nasdaq, are the markets to watch to decide which way this consolidation phase will break.

[Caseynotes]

Yeah, the dax is just following the dow which has it's own big support level to retest at 24895.

Dow on right.

 

[Mercury]

FTSE100 is too, I can see another small leg down though before any rally, especially on the NASDAQ, which I am guessing will open soft and hot the 7000 area before any rally, or else plough on through recent lows of course...  Given the depth of the current retrace (if retrace it is...) there is not much to go before we could see a break through support levels, which makes the case for having already seen the end of the Central Bank Bull stronger.  A turn and rally has to happen soon, although this kind of consolidation can go on for ages, I don't think so however as I think the market will resolve this one sooner rather than later.

[Guest phil]

dow is falling like a rock! 

[Caseynotes]

Yeah, it just ran into that prior low from a couple of weeks ago 24895 pushing through 20 odd tick and now attempting a bounce, currently back up to 24945 which was support earlier today so interesting to see what happens here.

[Caseynotes]

Price still trying to hang on at these levels on the Dow, US open in 15 min. Interesting Cat earnings release a beat but stock price down pre-open. Dow 1 min >>

 

[Mercury]

SP500 and Dow just short of Fib 62%.  In the former case this is on a parallel tram-line too.  This is an important zone of support I feel.  Could get another test or two on the hourly chart but a firm rally away from here would be Bullish.

Also have PMD on the 4 hour chart.

 

[Mercury]

Nasdaq appears to be leading again as the Tech Boom 2 revives, but it is a last gasp rally?  There are 2 rally scenarios:

1. A final leg up to fresh all time highs and market top before a crash slowly begins
2. The top is already in and this will be a 1-2 retrace to a suitable turning point before a resumption in the drop

But for now I am just concerned with ensuring this is a rally phase at all and the current drop is ended.  Nasdaq has pushed to a higher high in out of ours trading supported by the Nikkei.  It looks like a minim Flag has formed and been broken.  If correct we should not see another significant retrace until the 7350 area.  Let's see...

[Caseynotes]

A new day and new levels after a sharp recovery rally on the US open yesterday finding resistance and then consolidating in unison during the APAC session.

Once again looking for the European open at 7:00 am to hint at the mornings direction and confirmation on the London open at 8:00 am. Currently they are looking to test the 1 hour chart support levels (green).

 

[Caseynotes]

Dow and FTSE leading a late morning charge back up to yesterday's highs after finding support around 10 am.

Dow 15 min bar the strongest of the day or is it the sellers are waiting just up ahead. Get ready for earnings releases.

[Mercury]

Still stuck in consolidation, ho hum!  With a fairly swift move down on US opening I looked for alternative scenarios.  It looks to me like we could see a retest of the 7000 area on Nasdaq (and whatever is similar on others).  This would from an A-B-C deep retrace before a possible rally away off the support levels.  Could take the rest of the day to resolve and leave us with another day of wondering "is this it" tomorrow. 

[Mercury]

big bounce off the Fib 78%.  Same for Dow, SP500, FTSE and Nikkei.  No idea what the Dax traders were thinking...  This is following my A-B-C retrace scenario nicely.

Let's see if this is sustained...

[Caseynotes]

Nice bit of bouncing around with Dow revisiting our old friend 24895 twice today. Dax got off to a slow start with poor German PMI manu figures this morning plus concerning data from Deutsche Bank. All 4 kept in reasonable step and with only an hour and a half to go before US close suspecting these levels may hold.

[Mercury]

alas not.  Japan took another tumble.  Looks like everyone is skittish about a big fall, and no surprise there really.  Will have to let this play out a bit to see how things shape up I think.  Without detailed analysis there will be a strong rally but whether that will be a retrace before the big plunge or a final bull splurge is impossible to say at this time.  No need to jump onto the Bear bandwagon at this point as a large part of the current Bear move is done in my view, just waiting to see where it will turn to rally again for clues as to whether or not we have seen the end of the Bull or not.  Either way the next big picture rally will run high and will retrace more than 50% of the current move down.

[Caseynotes]

 

11 hours ago, Caseynotes said:

with only an hour and a half to go before US close suspecting these levels may hold.

Ha, famous last words - Dow uses the last hour in the US session to break down through the important 24895 then consolidates during the APAC session.

US durable goods today and Advanced GDP tomorrow.

Currently waiting for a directional break from this short term range.

[Caseynotes]

Looking at the 4 hour for a sense of near term direction our 4 indices were seeking to retest the recent low which on Dow is 24530 and Dax 11050.

On the 15 min Dax there looks to be some indecision with an opening range marked out between 11200 and the green 11132 so will be looking for a break of either.

US quarterly GDP figures at 1:30 pm today may cause some action prior to the US open.

Draghi speaks at 3:00 pm. 

 

[Mercury]

Apparently KKR’s Hugh say he expects markets to forge ahead for another 12-18 months. He didn’t say what happens then... LOL!

[Caseynotes]

12 to 18 months is a long time in economics as they say. Just watched this short Hedgeye vid painting a rather different picture.