- WE'RE JUST RANDOM SPECKS OF DUST IN A TORNADO TO THE MARKETS .......
- CHARTISTS MUST PUT ALL BIAS ASIDE AND LET THE CHARTS DO THE TALKING OR WE'LL SEE ONLY WHAT WE WANT TO SEE
- This blog has a copy of all header posts that I publish anywhere, so that those interested in seeing what my thoughts are on the markets can find them easily.
- I will be answering questions and responding to comments, so feel free to respond to any posts and I will see your comment even if it is not on the most recent post.
- If you're interested in seeing any intraday charts I post, I do that on twitter, and my twitter handle is @shjackcharts.
- The charts in the posts are as large as I can practically make them. if you would like to look at one more closely, click on it, and the link will take you to a larger version at screencast. If you click on that again, you will get a full page version, and can use the resizing function on your browser to enlarge parts of interest further.

Thursday, 11 August 2011

Broken Triangles, Dying Dragon

I haven't been posting much in the way of shorter timeframe equity index charts in recent days, and that's simply because the intraday moves have been so wild that there haven't been any shorter term trendlines or patterns worth the mention. That has changed this morning, though since I capped the charts the support trendlines that I was looking at have already broken down. The first pattern is a nicely formed triangle on NQ that has now broken down:
The second is a support trendline on ES that has also now broken down, with an ominous looking H&S look to it:
I'm not expecting a big breakdown today. At worst I'm thinking we may see a retest of 1100 and I'm regarding this as part of a bottoming process before a decent rally. Other instruments are broadly supportive of this view. On oil a counter-trend bounce looks very likely here from the daily chart:
Copper futures hit rising support from the 2008 low overnight and are bouncing there so far. This bounce needs to survive the day though as the candle reversing at support is still ongoing. I'm expecting a bounce here:
I have a rising channel on EURUSD though I don't have much confidence in it. I'm wondering whether it would just be fairer to say that EURUSD is trading sideways around 1.427 at the moment. I am wondering about a diamond bottom on this and will be having a closer look at that later:
I've been having a look at some longer term charts that look interesting and relevant to the bigger picture and the first today is the XLF weekly chart since 2006. This is a very grim looking chart with XLF sliding down declining resistance from the 2007 high for over a year before breaking strong support in the 13 area. Hard to put a likely target on this chart but I'd be thinking in terms of a move to the 9.5 to 10.5 area:
The SSEC chart is even grimmer, and raises a serious question whether the bear market that started in 2007 in Shanghai ever ended. Either way a decent symmetrical triangle formed on SSEC between 2008 and 2011 and that has now broken down. The first obvious target for this pattern is the late 2008 low in the strong 1650 - 1700 support zone:
My WAG for today is that SPX tests the 1100 area and then closes flat or up before a decent rally over the next couple of weeks. My WAG yesterday that we'd see a hard fall into support in the 1120 area went pretty well so we'll see how that goes.

No comments:

Post a comment