Time for a break?

markets have been steadily grinding up.  So far no panic buying suggestive of a capitulation top.  However some markets look over extended for now.

FTSE daily, 4 hr and 2 hr

Looking at various time frames they all seem to be overbought.  Ideally a retrace would be good for refreshing the trend up.  However it may be the FTSE trades flat rather than trading down significantly.  

3 main options

1. a correction within the up channel, first target the mid line of the up channel (dashed line)

2. trade sideways until overbought conditions are relieved.

3. market continues up and more extended, but would lead to a more dramatic correction, espcially of the rally is sharp and in "blow off" style.

Week 3 ..CONSOLIDATION

January week 3.

Markets have consolidated the recent gains, most notably the DAX, which had a month of up days with little correction.  FTSE flirting with 6100/6070 as support.  EURO broke through 1.33 and looks to be back testing that level, holding above 1.325.  Cable notable under performer clinging to 1.60 level.

S&P very tight range 1465/1473

Oil, gold and silver have also held their rallies, as copper consolidates

OPEX week so not expecting major change this week. 

AAPL trading dominated by emotions.  $500 key PSYCHOLOGICAL level was broken mid week, and subsequently recovered.  The POSITIVE divergence on the DAILY chart continues and it is possible that the drop below $500 has now cleared out weak hands and "emotional " selling.  AAPL has also caused to NDX to under perform so a turnaround should be reflected many times in the NDX

CHARTS

FTSE Daily

May still be a move down but would not expect 6000 to be reached, more likely 6050 if anything

More likely scenario is a break higher once this consolidation is finished with.  Targeting 6400

DAX daily

DAX also consolidating (pink box) after the strong rally from November low.(light blue arrow)

Also looks like it will be on the way to new highs once this is over.

Possible for a scary move down MAX 7560 (in the scheme of things not that big a fall, but would shake out any weak hands).  More likely we have seen the extent of this consolidation, and a break above 7800 , targets 8000 and maybe higher. 

EURO daily

The EURUSD looks to be headed higher 1.35 first target.  Projected path pull back and then rally further towards 1.40 level, which SHOULD coincide with new highs in equities and a push higher in commodities.

Cable daily chart

1.60 looked to be key level..but like AAPL probably more psychological with a lot of stops just below. More important should be 1,5970

tentative EW labeling ! Maybe we are poised for wave iii up. Target 1.63 and beyond

A drop below 1.5830 changes things

AAPL daily

NDX daily chart

The GAP up has not been filled (BULLISH)

looks to be forming BULL flag between 2710 and 2750

A sustained break above 2750 could target 2890 (measured move)

NDX weekly chart

Chart is pretty self explanatory

a sustained break above the rectangle  and we could see similar move to August 2012

Market "manipulation" must see!

EURUSD top? AAPL bottom?

Euro has rallied off the 1,30 level quickly.

Is this it?

I don't think so..
1.33 was tested 3 times and pushed the rally back..NOW we are above that level, so we should now have support at 1.33 or close by.

How far can it go?

On the daily looks like 1.35 is reasonable short term target before a pullback

EURUSD daily

EURUSD weekly

On the weekly there is one rally followed by corrective action (Bull flag) no broken out and target could be as high as 1.40

AAPL daily chart

Still showing signs of positive divergence with price and RSI

Right angle triangle 

500 support (psychological level)

May get broken just because so many are watching that level.. a break may clear out the last weak hands and then rally, or it may start a new leg down..BUT it seems the NEGATIVE NEWS may already be priced in with the fall from 700.

click on links to see the stories

Sentiment wise everyone is negative, and yesterday front page of Market watch was FULL of bearish stories on AAPL, from cutting production to new competition from Linux based phones.  One positive story stating AAPL is cheap at 500 USD

Still not convinced,,new highs coming

The markets closed yesterday at 5 year highs..

and scepticism  in the rally and equities is still rife.

"The lackluster performance on Wall Street comes as traders express some uncertainty about the outlook for the markets after recent gains lifted the S&P 500 to a five-year closing high."  article can be found here *RTT news)

Top pickers still around

From Bloomberg TV



From Marketwatch headlines on Front Page

FTSE update

FTSE at 6100 !

Now what?

Will resistance hold?  If so then we may get a deeper correction before another challenge at higher levels.

If we clear 6120 decisively, we may then retrace to 6100 before heading higher.

Depends also on other world markets.

Part I second week 2013

After a strong (short) first week, week 2 finds markets consolidating and despite the strong rally last week, so far have not given back much.  

All markets are consolidating

AAPL drags on NDX (but did rally 10 % last week)

FTSE broke to new highs on Friday.

DAX continues consolidation.

Dollar rallied hard on FOMC minutes but this week giving back some of gains : ready for a FALL?

obviously EURO and POUND vs dollar fell after reaching obvious resistance at 1.33 and 1.63 respectively, now is the fall a correction and ready to go higher?

YEN remains weak

CHARTS

FTSE daily

Can see a break above descending trendline @ 5904/5910  then a classic pull back to retest that level, and then rallied towards the next resistance at 6100/6120

So we should have solid support at 5900, and resistance at 6100. Shorter tern 6000 looks like psychological support,

BUY support and sell resistance, BE WARY of sustained break above 6120 market will then be in position to attack the highs (minor resistance at 6500) 

Also a decline below 5900 may call into question new high scenario

DAX daily

DAX has had a large rally off the November 2011 low.  Despite being overbought has not retraced mush, so could be in a sideways consolidation.  Another push up to around 8,000 possible before larger retrace.

EURO daily

Euro attacked 1.33 resistance level, but was overbought.  The fall to 1.30 has reset the O/B conditions quickly.

A fall below 1.2950 signals deeper correction

Sentiment seems bearish with talk of Double and Triple top at 1.33

expecting another go at 1.33 which succeeds and euro rallies to test 1,35 on way to 1.40

When the press say this...

and everyone is thinking the same..probability is that it WILL go farther!

2013 quick look

Quick look at the first day of trading.

FC resolved (Fiscal Cliff)

Underlying trend has been and will continue to be up; liquidity picture has not changed and Japan wants dollar yen to 90 will add more liquidity to global financial system.  Retail investors have shunned equities for a few years now.  US markets have been under-performing Europe recently, so expecting catch up, especially in the TECH sector which has been hard hit buy AAPL.

Pluses for continued upside:
Global liquidity
Transports breaking higher
European indices breaking higher
China



FTSE

December post shows FTSE breaking out, here

Looks like this will continue and head towards 6100 where stiff resistance so expecting a retrace near there. Possible short term short scalps..but safer play will be buy the dip.

DAX

 daily similar to FTSE heading to 8,000

Weekly chart shows levels more clearly

some FX

EURUSD  previous post here
Still on track for higher levels..
best guess is break 1,33 to go to 1,34..then a pull back before heading higher.

Cable  GBPUSD

Declining resistance near 1.64
1.63 also resistance
breaking 1.63 targets 1.68
extreme upside target (unlikely) 1.72