Quiet Xmas markets

With Xmas only 4 days away things are quiet but mildly bullish...

here's a 4 hr chart of the DOW with a bullish inverse head and shoulder Neckline at 12230.. and if we bust through that and a possible retest, target could be +1000 points higher...

Maybe not before Xmas but could be for Q1 2012

DAX and FTSE have also broken out of recent down trend which could have been FALLING WEDGES..

DAX Elliott waves for FUN

Not an expert so more a bit of mental masturbation and a bit of fun whilst waiting for the NEWS !! So it seems everybody is bearish again; VIX at high levels, "shoot sell first , ask questions later" mentality prevailing, well to some the recent fall in the markets may just be a correction of the big run up from 25 Nov lows. Of course the DAX has been sold more than others (Germany at core of Europe, plus inherently more volatile), so here's a look at a POSSIBLE wave count (Elliott Wave, IMHO usually not good at forecasts BUT quite good to look at in retrospect)..

Obviously this is the BULL scenario at least in the Mid term...once wave 2 completes...then the BIG wave 3 down occurs!

Any "experts" on EW more than welcome to comment.

Waiting for Godot...

Markets marking time especially currency markets...
waiting for the BIG news out of the EU summit..

both charts show the tight range we have eben in since the day the world's Central Banks announced tehir concerted action, resulting in the big spike on November 30th.

Nothing to do but wait !

The AUDUSD looks like it wants to break higher through the 1.029 /1.02 level.
EURO looks like it has found support at 1.33


EURO 30 minutes

AUDUSD 30 mins

Equities also pretty subdued at their highs, DAX is the underperformer, vs DOW and FTSE

CABLE head and shoulders or Double Bottom?

Like many indices it seems that most are universally BEARISH on cable, euro and Aussie dollar vs dollar.

Looking at the daily CABLE (£/$) chart

The BEAR case (head and shoulders) is clearly outlined and would target 1.40 or lower

However there is pretty strong support mid term at the 1.53 level..and we may have already bottomed or one more dip lower before we rally.  Also we seems to have broken out of a falling wedge..(bullish)

Be prepared

Sometimes it pays to look at a longer time frame

Looking at the WEEKLY chart

We can see since 2009 a large triangle is playing out which looks like an ASCENDING TRIANGLE.

We are also near the rising trend line forming the bottom of the triangle and resistance is around 1.65

DAX daily..toasted bears on menu?

Yesterday the DAX gapped lower, but today has GAPPED higher..
We are still near the "obvious" resistance" and psychologically many will be looking for the FALL from here.  Maybe.  BUT if yesterday was the extent of the selling and many are short then the SURPRISE move will be higher and once we breach the "obvious resistance" the next level will be 6400 fairly quickly, where we may pause and trade in the "RESISTANCE AREA" ie 6150 to 6400.

Tomorrow and Friday keep eye out for headlines from the EU summit!

Reading a few blogs, seems like everybody is looking for the markets to fall from here...(contrarian signal)

as always be prepared !!  ie PLAN B!!

Time for a rest?

Well after the big run up last week, looks like markets want a rest.

Looking at FTSE 4 hr chart, after the break out from that channel, we COULD go as low to retest that channel, but I would say doubtful .

More likely we see some weakness maybe as low as 5400, before the rally gets going again..

CAVEAT: Obviously if we get some "news" out of Europe by end of the week it may accentuate the moves.

EURO has also given back most of it's gains, AUDUSD also weak today after RBA rate cut...

FTSE 4 hr

DAX


similar picture to FTSE, looking to buy on weakness..ideally below 6000

DAX 4 hour

DAX daily ..BULL FLAG

When markets are showing similar patterns usually reinforces the analysis.  The DAX also broke what now looks like a BIG bull flag on the daily chart.  If so, and referring to my trusted Edwards and Magee, the measured move would be to approx 7200 !!   

With a lot of skepticism in the market this could be achieved in the next couple of months.  6145 levels looks like the "OBVIOUS" resistance level..so watching that but like FTSE not expecting a huge pullback..

Maybe strategy is take profits on half and wait for pull back to reload?  Unless very nimble shorting may be too much work

FTSE daily update

After yesterday's post , the Central Bank action pushed FTSE through that channel.  Reading press and other media, there is still a lot of disbelief in the "rally", so am expecting a relatively small pullback, and another push higher before a more meaningful pullback...

Longer term it seems that there will be a lot of money looking for return, and the world will be awash with liquidity.

Dollar index broke it's rising wedge yesterday, so looking to sell dollars into strength (AUD, GBP and €)