Indices

[Caseynotes]

After the strong US session all are flying bull flags with clear breakout levels.

Pre-open breakout box for Dax between 11623 and 11662 and for Ftse I would use the range between 7134 and 7145 with noted resistance at 7154.

[Caseynotes]

All four breaking to the downside this morning before Dow and Ftse return to test resistance. Dax on the other hand bottoming out and staying low at around 11555.

Increasing concern over the last few days of a looming confrontation between the EU and Italy over the latters proposed budget plans which look set to go against EU rules. 

15 min charts;

[Caseynotes]

Near end of US session and Dow maintains the bull flag, tried to pop up but was defeated by FOMC.

Dax foundered on Italy woes while Ftse and Nikkei were lackluster. Interestingly Ftse's ATR was up to the 90 point level today while Dax's dropped down to just 180 points.

[Caseynotes]

Interesting split as Dow maintains it's bullish stance while Dax, Ftse and Nikkei struggle to find support.

On the 1 hour charts looking to the Euro open to see if Dax can bounce up off 11478 for a retest of 11524.

Ftse is up off 7100 and looking to break through former support turned resistance at 7114.

[Mercury]

Interesting that you should mention the Nikkei @Caseynotes.  This market has retraced back to a trend channel breakout resistance zone and rebounded back off that area over night.  With Dax and FTSE weak vs the US large Cap as you mentioned, the Nikkei and Nasdaq middling (both getting to around 50% retrace levels) and the Russell 2000 not making 50% is this a divergence between US large cap of significance?  Market lore (folk or otherwise) has it that such divergences are meaningful in a trend change scenario with the weaker players turning harder and earlier.

So with US large caps turning where I thought they might this brings up the question I had when the recent Bear move was halted, will the rally be a retrace to set up a much larger Bear OR take us to another all time high.  The answer to this question will have a huge bearing on trading in the coming weeks and months.  Not saying it can be answered yet BTW...

[Caseynotes]

Actually @Mercury, that would be a good theme for an ongoing thread, the 4 US indices in 1 space for straight comparison as I do on this thread, and also did for crypto for a while til it got too boring. 

[Mercury]

Today I am glued to my screens as I felt it would be an interesting one for Stocks, US in particular, and I had gone short late last night so was keen to monitor progress.  Now I don't normally spend the whole day watching the markets, having a day job, but I do check in regularly through the day and usually I am watching the hourly charts.  I observed something I thought interesting on the Dow (and also on SP 500) today, which is that the hourly move down does not look that impressive, giving me the concern all day that this could reverse at any moment (which of course it could).  However when I looked at the Daily just now, as I only tend to do if I am checking a long term set up or for end of day price action analysis, I got a very different perspective.  The reversal looks quite determined and with several more hours left and the weekend coming up nervousness of carrying traders over the weekend could very well drive this down much further still.

[Caseynotes]

Still looking good @Mercury, in the last couple of hours of the US session I see there was a pullback to retest 26078 the underside of support now acting as resistance and the test candle a pin bar as well. Dax meanwhile trying to do the opposite and looking more of a mirror image of Dow.

 

[Mercury]

Agree @Caseynotes and if you look at the 4 hour charts the overall shape of the price actions across all the markets is similar.  The one notable divergence for me at present is that the European indices (FTSE100 & Dax) did not make higher highs recently and, as you point out, seemed to be pushing upwards at US market close yesterday.  Of course this was in out of hours trading for the Europeans so will be interesting to see what happens at the opening bell on Monday.

I note that on the US markets there was a late an attempt to reverse the Bearish momentum of the day that was firmly rejected in the closing minutes.  On the 4 hour chart the set up remains Bearish in my opinion.  Market-lore has it that the final move before the weekend is telling of market bias (not sure how true this is and wouldn't trade on it or anything) but the logic is that if traders are uncertain they will trim their most exposed position rather than holding through the weekend.  Based on the available info. then I have concluded that the turn I was projecting has indeed occurred and the direction for stocks is likely to be down for a while, and could be fast, until the right support level.  After that, well who know but if this is the end times for the great Central Bank Bull it is likely to be highly volatile with some wild swings...  Although, as so often appears to be the case, we may not notice the top out.  There never seems to be an actual bell tolling moment...  So maybe we have already had it?

 

[Caseynotes]

I take your point @Mercury, on never being sure of a big event until it's crashing down around you. Many say the 200 sma on the daily is the best gauge but looking at the daily S&P below that method would have caused a scramble for the bunkers on numerous occasions in the last 10 years. 

 

[Mercury]

Yes and it kinda did but then the buy the dips bulls came in and off we went again.  However since 2009 we have had massive, unprecedented central bank intervention and now that is waning fast.  With no weapons left in the arsenal they will not be able to stop the next one.  It is very early days on this so plenty of time and gotta be patient.  My problem now is, having got in Short off the Fib 76% (Dow) and Fib 62% (S&P) retrace points the answer to my question on which of my road maps (or something else) will come to pass is more important than if I was just a bystander.  Wont know until we know, oh well that's trading...

[Caseynotes]

The indices look to have positioned themselves over night for a break higher this morning on the 1 hour charts. 

A zoom out look at the dailies shows the disconnect between Dax, Ftse and Dow, Nikkei.

Dax, Ftse facing immediate resistance, Dow looking to continue the up leg.

Public holiday in the US today, Veterans Day.

[Mercury]

I see something different @Caseynotes.  The small retrace is expected after a major turn (if it is).  Price action got stopped at small overhead resistance (fib 50%).  A fall off from here is consistent with my assessment of a bearish phase.  Also USD remains strong, not sure that will last but let's see.

 

[Caseynotes]

It's a lot simpler than you might think @Mercury. When price sets up into a pattern pre market there is a real possibility that the pattern may play out but also the possibility it won't. Doesn't really matter to me, price can only go up/down or sideways so it's easy enough to be prepared for all three.

[Mercury]

It's even simpler than that surely?  Price moves back to resistance after a drop and gets turned back down, go Short!  If you are into Elliot Wave Theory, you additionally see a 1-5 down and A-B-C up to that resistance.  If you are into Fibonacci retrace you may have taken a speculative Short at the Fib 76% even but if you didn't the above 1-2 retrace set up is the place to go Short.

Anyway regardless of all that, if and when price breaks past recent lows and support levels there is likely to be an acceleration in the Bearish move.  I will be studying the price action of any Bearish move and how the market reacts to key support to get any clues as to which of my scenarios is more likely OR whether the Bear just hammers on down...

 

[Caseynotes]

Prices move because someone has picked up the phone to put in an order that makes them move, price will head towards an old level but whether it gets there or not or whether it sails straight though can only depend on current factors rather than past factors. That's what makes the game so interesting and ultimately unknowable which is why us little guys have to wait for the right signals that a big player has started pushing price onto the next level, wherever that may be.

[Caseynotes]

Dow approaches the highs so Trump once again increases the pressure on China one more notch, this time he was so confident he took aim at both China and Europe together, he's playing this like a fiddle. So we see the resulting pullback and look for support, Nikkei in step with Dow while Dax and Ftse continue their divergent path but remain in step with each other though each with their own EU concerns.

Ftse hoping for support off 7026 while Dax is hanging in mid air, may be buoyed by Nikkei finding support at it's monthly chart support level 21451.  

[Caseynotes]

As mentioned in the EMEA Brief below German economic sentiment (10 am) expected to come in negative again today so making the 8th straight month and the actual number will be important too (see graph).

Plus the German GDP q/q number tomorrow expected to be negative, that hasn't happened since 2014.

Dax currently 90 points higher since the open ...er.

[Caseynotes]

Ftse increasingly skittish as deal or no deal countdown runs down takes an extended dive on the bearish US open but follows Dow back up on the next 1 hour bar. Dax making the most of the day but then it had the most to make up.

Over to Nikkei soon enough which has a recent series of higher highs and higher lows under it's belt may bode well for the next session.

[Caseynotes]

Indices fully coiled with clear levels marked up, just waiting for the start gun and a sense of direction.

1 hour charts;

[Caseynotes]

Going into the last hour of the US session and Dow looking to dig itself out of a hole while Dax takes a breather after throwing itself about all day as did Ftse, Nikkei remains calm while awaiting the APAC open.

4 hour charts;

[Caseynotes]

All 4 indices showing early signs of looking to test resistance today, Dax and Ftse particularly active out of hours.

Dow trying to bounce off 24932 and needs to surpass 25200 for an attempt on 25497. 

Dax and Ftse also looking at yesterday's highs.

1 Hour charts;

 

[Mercury]

After initial bullishness the Europeans have turned bearish in the run up to the US open.  Perhaps they are tired of being slapped back down by the Yanks?  I wonder whether they will have it wrong again?  After a long period where European markets have been more Bearish than the US markets (not putting in higher highs as the US large caps did) the do seem to be agitating for a rally now but seem jittery.  Will the pile in if the US large caps rally or stay depressed and divergent from the US?

[Caseynotes]

So the US open turned into something akin to a bare knuckle brawl between the bulls and bears that went on for over half an hour before I had to give up my ring side seat. Looking back at the charts now and on the 4 hour chart  Dow bulls have managed to put in their largest bar stretching back well into last month (still an hour to go before US close).

[Caseynotes]

Dow holding onto it's gains from yesterday in spite of Nikkei falling away. Dax and Ftse copying Dow though testing short term resistance just before the European open.

1 Hour charts;

[Caseynotes]

First day I can remember where there is absolutely no news or data releases planed for today. Looking for Dow to signal direction, currently resting between daily support and resistance (orange) so either a break higher or a retest of 4 hour support  (yellow dash).

[Caseynotes]

Dow down close to daily support level, Ftse and Nikkei resting on their's while Dax is approaching it's weekly support level

[Caseynotes]

With fast moving markets it always pays to go to the higher time frame and zoom in to get an idea where they might be headed.

Dow and Ftse have last months low straight ahead while Dax is trying to hang onto the same though also has just below a previous 4 month resistance level that may become support.

On the 4 hour Nikkei there's a strong bounce up which looks to be influencing the other three this morning.

Monthly charts top

4 Hour charts bottom.

 

[Caseynotes]

Three of our indices got a reasonable bounce up off support yesterday the exception being Dow which is sticking close to the recent lows. That's likely to unnerve the other three today and consider today is a public holiday in the US  while JPY public holiday tomorrow.

 

[Caseynotes]

Dow still eyeing up that recent low, though the Thanksgiving holiday is just 1 day but many make a long weekend of it and today being a Friday I wouldn't expect a serious attack on an important level today (famous last words).