The BETFI Index Christmas Rally

In the context of a global equity markets rebound discussed in a previous post, the Romanian BETFI Index is poised to trend higher until at least end of the year. The critical 25 000 points support(discussed in the last post exploring the BETFI Index) gave way shattering any bullish development and starting a long downtrend that may have ended in the beginning of October.

 

We notice in the weekly chart above the end of the weekly downtrend around 16K at the 161.8% extension of the previous rally (roughly 20K to 27K). If the downtrend is broken next week, the index could target the 20 500 - 21 500 area until end of the year and perhaps 23 000 later on.

 

The daily chart below paints a bullish picture showing a 5-wave downtrend move ending around 15 500 with an October test (the 5th wave) of the August selling climax (3rd wave, notice the spike in volumes) and a broken downtrend line accompanied by increasing volume. The uptrending index could target the 20 500 - 21 500 area (previous support, SMA200 and 50% retracement of the downtrend) until end of the year.

Relative to BETXT Index, the BETFI Index is still underperforming on both weekly (above) and daily (below) charts but with good chances to break the daily underperformance trend and perhaps weekly one later on.

Dow Jones World Stock Index Downtrend Correction

As discussed here and here, The Dow Jones World Index moved lower retracing most of the rise from May 2010 to May 2011, as noticed in the weekly chart above. 

The downtrend had an impulsive 5-wave structure (see the daily chart below) which may have ended in the beginning of October setting up an a-b-c correction which can run until perhaps end of November or early December. When this rebound is over, the longer term downtrend could resume. 

Markets Price to Moving Average Snapshot

Most global stock market indices enter medium term green setting up an intermediate term rebound in a still bearish long term trend.

Markets Price to Moving Average Snapshot

Generalized short term rebounds with most indexes below medium and long term moving averages.

Silver's Moving

Silver has started moving within a rising channel since July, after a two-month correction.

The 61.8% Fib retracement of the May - July correction (around 43) is now challenged and if broken opens the way for a test of the May highs (around 50) and perhaps for new highs later on.

US Philly FED Survey in Recession Area

..two months after the US Philly FED Survey Slowdown Warning.

CRB Index Touching Support

As discussed in a previous post in the beginning of May, the commodity CRB Index started a correction following three failed tests at the 61.8% Fibonacci retracement of the 2008 - 2009 plunge. The target of the correction was the 320 area which has been met recently as can be noticed in the updated daily chart above. The index strongly bounced from the 320 area right on the monthly cycle.

The updated weekly chart below shows that 300 - 320 could prove strong support due to the monthly rising uptrend line (now just above 300) connecting the 2009 and 2010 lows. Any break below 300 could send the index to 250 or even lower, while holding above 300 and turning higher could set the stage for a new test of the April - May 370 area. Trading wise, aggressive traders could go long due to the good risk/reward at this point. However, we should be aware that both daily and weekly charts are still in downtrends.

30-year Low in US University of Michigan Consumer Confidence

..a reaction to the last two weeks markets volatility that may send US GDP growth in recession area.

US Treasury Bond Yields Leading World Equity Markets Lower

As noted here, here and here, the US 10-year treasury bond yield trends are leading the trends in other asset classes. Last week we had a good example of how US bonds are "leading" the equity markets around the world.

The 2.90 US 10-year Treasury bond yield support level, well discussed in the mentioned posts, eventually gave way and started the plunge on Friday July 29th, as noticed in the updated chart below:

On Monday August 1st, German DAX dropped through key support (6-month uptrend line and 200 SMA), see chart below:

Tuesday August 2nd was the day when key support levels were broken in many equity markets including the US S&P500 Index (levels discussed here, see updated chart below),

the Romanian BETXT Index (levels discussed here, see updated chart below),

and the Dow Jones World Stock Index (levels discussed here, see updated chart below).

US Macro Downturn Charts

Markets Price to Moving Average Snapshot

The summer rally ended in a red sea.

EURRON Range-Trading Time

The EURRON reversal anticipated in a previous post happened as discussed, reaching each of the mentioned targets (4.15 and 4.19 - see the updated chart above) and then breaking higher in an impulsive move that took the rate to the 61.8% Fib retracement area around 4.23 and spiking towards the rarefied area bordered by 78.6% retracement around 4.2750.

The 4.23 - 4.275 area is a strong resistance that could propel the rate back to 4.33 if breached. A break below 4.19 area could send the rate back to 4.15 and towards this year lows around 4.06. The 4.19 - 4.23 in-between area is no man's land and a potential boring range. However, as long as EURRON stays below 4.23, the odds tilt towards resumption of downtrend by breaking below 4.19 later on.

US Monthly Change in Nonfarm Payrolls Approaches Zero

US 10-year Treasury Yield Halts on Target

This post title is the answer to a preceding post discussing the importance of the 2.90 level (see updated weekly and daily charts above and below).

The US 10-year treasury note yield halted on targeted mentioned level in June and reversed signaling the potential start of the summer rally in equities, commodities and the continuation of the dollar weakness.

Potential target for reversal is the weekly falling 200SMA and the downtrend line in the 3.40 - 3.50 area.

Markets Price to Moving Average Snapshot

Compare this table with the last week one. Notice the change in color on all three time frames and the switch of all US treasury notes yields from red to green signaling the potential start of the summer rally.

US Consumer Confidence Lower

Dow Jones World Stock Index - Healthy Correction or More Downside to Come?

As we notice in the weekly chart above, after touching the 178.6% Fibo extension of 2010 spring correction, the Dow Jones World Stock Index correction reached a critical long term support found at the confluence of 2010 - 2011 uptrend, Fibo fan line and the flat weekly 50EMA. A break below mentioned support could quickly target the next two Fibo fan lines support, otherwise the long term uptrend could resume and the world stock markets may challenge the May 2011 highs.

Zooming in through a daily chart below we notice a potential Head&Shoulders formation with a down sloping neck line that was broken, then tested thus the index being now theoretically prepared to drop to at least its H&S projected target that coincides with the second Fibo fan line support. A return above the neck line negates the bearish daily chart view.

If the drop towards the H&S projected target unfolds in the coming days and weeks, the world stock markets will remain under downward pressure.

Markets Price to Moving Average Snapshot

German ZEW Survey Lowest since January 2009

The ZEW Indicator of Economic Sentiment is ascertained monthly. Up to 350 financial experts take part in the survey. The indicator reflects the difference between the share of analysts that are optimistic and the share of analysts that are pessimistic for the expected economic development in Germany in six months.

S&P500 Top Formation

As noticed in a previous post in the beginning of May, "Sell in May and go away!" was a good advice once again. The updated weekly chart above shows the weekly breakout above 1350 was fake and reversed the week before starting a deeper correction and perhaps forming a long term top. We notice the index broke the uptrend coming from the 666 March 2009 lows. The break occurred on the logarithmic scale chart only but usually it precedes the break of the arithmetic scale chart (see below), as well.

The index halted around 1370 where are 76.4% (38.2% x 2) retracement of the fall from the 2007 highs to 2009 lows and 161.8% extension of summer 2010 correction. The internal symmetry is indicative of a potential long term top set in May 2011 which could trigger a deep correction targeting at least the 1000 area (2010 lows and 38.2% retracement of the 2007 - 2009 plunge), thus retracing half the 2009 - 2011 recovery until sometime in 2012.

The updated daily chart below shows the potential 5-wave count which may be completed and the correction that ensued by breaking the uptrend (coming from August 2010) around mid May, as discussed in the mentioned previous post. The correction has touched the targeted rising SMA200 and approached this year lows and the bottom of the corrective wave 4 located around 1250. A break down through this area is extremely bearish and seals a long term top at this May's top around 1370. Nevertheless, the index may stage a rebound preceding the important 1250 area break down while a return above 1350 would suggest the top is not yet in place.

US Philly FED Survey Slowdown Warning

Markets Price to Moving Average Snapshot

All stock market indexes are below SMA50 (medium term) and the majority is already below SMA200 (long term) except for the ones from Germany, Indonesia, Israel, Romania, Russia, South Korea and US.

US 10-year Treasury Yield Halts on Target?

As noted in a previous post, the US 10-year treasury yield started a downtrend that signaled turning points for the other asset classes (commodities, equities and the US dollar). In the updated weekly chart above and daily chart below we can see the two discussed targets, 3.05 - 3.10 area and 2.90 were sequentially reached around monthly cycle lines.

The consistent break of the 2.90 area this month could send the US 10-year treasury yield towards last year's low around 2.35 and could also keep pressure on equities and commodities while potentially pushing the dollar higher during the summer and year end. If the 2.90 area is holding this month then we could see summer relief rallies in equities and commodities and continuing dollar weakness at least until autumn or literally "fall" :).

We Are Traders - A tribute to all those trading the markets

EURUSD Resumed Uptrend

The updated EURUSD daily chart above shows that the long term support area discussed in a previous post built the base for the renewed uptrend which set off right on the monthly cycle time. The next target should be the previous highs just below 1.50 and perhaps higher later on.

Nevertheless, we should check if the broken uptrend (now around 1.47) poses strong resistance. Failing to break higher could turn extremely bearish.

Markets Price to Moving Average Snapshot

US Macro Trends - Turning point?

TEL Breakout

TEL finally managed to break through the strong resistance around 22 with high volume and on cycle time, as noticed in the daily chart above. The obvious short term targets are roughly 23.5 (already touched) and 25 but the medium term target could be the area around 27.

In the daily chart below we have TEL relative to BETXT. We notice the breakout above SMA200 and through the downtrend around a double Fibonacci time zone area which sent TEL strongly overperforming the market.

Markets Price to Moving Average Snapshot

World Stock Markets Indexes Dancing on the Edge of Abyss

The Chinese Shanghai Index

MSCI Emerging Markets Index

The German DAX Index

The US S&P500 Index