Stock Market: CNBC Report
LET'S GO DIRECTLY TO THE S&P DAILY CHART
I remain convinced the index is going to 1260 but there may be a problem before we see that price. Notice the large volume spike on Friday's down day. That is normally a bearish omen for the short term trend. Yes, I do understand that a lot of the increase in volume was due to the news announcement related to Pfizer. But I have learned not to make excuses for the market, the volume print was real and that's all there is to it. So there is some vulnerability due to the volume on Friday. I would like to see this hold 1188 and I don't wont to see 1172 breached. If it were just this index I wouldn't be so concerned for the short term. But...
LET'S LOOK AT THE NASDAQ COMPOSITE
You can see when this index started this up trend, it came to the first "OBVIOUS" previous high for resistance and it showed a tight, small consolidation that had one down day. The index then broke to a new high for the trend and came back and test that old high with a first degree counter trend of three days. All very normal for trending. The index then hit the price level of the previous January high and fell 4 days. Again, a normal reaction and counter trend for a strong trend at the "obvious" resistance. But instead of pushing through the obvious level and consolidating on top of that price level, it has show two down days and on increased volume. In almost all instances, when this index is going to trend down it starts off with a wide range day. That hasn't occurred so I'm not too sure how vulnerable this could be. But there are two short term technical problems that have just shown up within these indexes. This is more likely indicating the start of a consolidation rather than a correction or change in trend in this index.
LET'S TAKE A QUICK LOOK AT THE US $
Last week we looked at the daily chart and saw it had shown some support and rallied three days. It has now come back 5 days and is still above the low so it is attempting to find a low for further rally. But look at this monthly chart, the index is down to "obvious" support so an attempt at a low is probable. But the chance of a low here is not very good. And remember one thing for sure. It will take at least 4 months to build a base before a rally can be sustained. To keep this in perspective, if the Dollar Index is still at this price level in March or April, then there may be a low of significance. But until this index can move above a previous low (I've drawn horizontal lines at lows), the trend remains down and down hard. So all we can assume now is a consolidation within a very fast, bear campaign that will likely go lower.
LET'S GO DIRECTLY TO THE HANG SENG CHART
The two previous weeks we've been looking at the NIKKEI charts and determined it was about to start to trend again. But there is no signal yet. I still like the long side for a resumption of the trend but we do need some evidence of trending up due to the huge bear campaign that is still in place.
The HANG SENG INDEX after breaking through the 90 day resistance in "time" pushed above the "obvious" resistance of the previous February high and came back and successfully test that level last week. This appears to be a consolidation of the previous trend up. The last rally was three days up, if a new low is hit today. It could indicate a completion of the trend and the first counter trend rally in a down trend. But that appears unlikely. Looks to me like a consolidation for a few more weeks. Or a if a higher low is be found the next two days, it will attempt to resume the trend.
LET'S LOOK AT THE AUSTRALIAN ALL ORDINARIES INDEX
Remember, this is an exhaustion phase of a blowoff trend. Fitting this trend into a computer screen is a bit deceptive, as the faster the trend, the more the computer has to flatten the trend in order to fit in on the screen. This move is literally vertical. Last week the index was down three days and at a support level that held the up trend intact. Although, I indicated when the new high was hit it could fail rather than extend. My forecast indicates a top to this trend either the first week in January below 4220, currently at 4200 or a top end of January at 200 points higher. Moving 200 points in a month is the current rate of advance in the index.
Friday showed a big gap up to a new high and could have been a temporary exhaustion of the move. Either way, this bull campaign is at risk of terminating the first week in January or the 23rd of January. I consider this a high probability.