DJIA finally decided it has enough fun for now...

If referring back to the days of my fortune telling adventures (yes, I have learned one or two things about fortune telling). There are always a certin window in time for everything to happen. Seems like DJIA has been holding on long enough and its decision to select the time of retreat coincides with Obama's speech on banks control. Is Obama's proposal on banking control really that bad until it is so shocking to the market to go into free fall? Or is that the day where DJIA decided to break its wedge envelop and fall, Obama's speech is just a coincidence?


Fig 1 DJIA Weekly Chart

Firstly, if you look at the daily chart(not shown here), RSI and Stochastic is at the bottom, RSI is even reversing, so probably a rebound on Monday. The weekly chart on the other hand, indicated that DJIA's fall has just started.

The upward wedge created since March last year comes with a measurement with objective of 9,368. If this is the final objective, then things aren't that bad.

Now, if I consider the move from March 09 till Jan 10 as the B wave, then C wave makes its a swing move. I would have a C wave objective of 2,960!!! THIS IS BAD! So is US under Obama going bankrupt? Gosh! I have high hopes on that guy and I am quite supportive of his proposal for control of Banks to ensure investment safety.

Presently the Dow is supported at 10,053 by its 21 weeks moving average while resisted at 10,213.

HSI review

On my last entry about HSI, I predicted it to reverse the next day. I was right...at least for a day. My predict based on the fact that A wave was a zigzag,and B wave should follows the same pattern. The worst case I could see was it being supported at its "envelop" @20,940.


Fig 1 HSI Weekly chart

I am surprised that HSI broke through this level on Friday (yes, only on Friday that it broke below the support and stayed). Seems like its B wave was only a single up-move because this is very likely a C wave with its new low.

In the short run, it might still rebound back up before it heads further south. If base on the present set up producign a Double Top, its new objective is 18,980 instead of the earlier Wedge 19,647.The new objective seems more realistic because this also coincidence with the Fibonacci retracement of 38.2%.

Its nearest support is the 89 weeks moving average @19,740 while 21 weeks moving average is now resisting @21,254. The envelop resistance at the moment is located at 22,692.Both RSI and Stochastic are reversing downward.

So I guess winter comes late for HSI and Chinese New Year does not look so good there.

USD, AUD & NZD against SGD

I have not been bloggin for the last 2 days. Work at office is becoming more stressful because the need to perform. By this I mean my department as a whole. The company is always looking at each department as a business entity and they judge by profitability. The department dealing with R & D started up 3 years ago and as I have predicted, our honeymoon period is 3 years, by when the management expect harvest from its investment, otherwise, they will re-evaluate if this entity should continue to live on.



Fig 1 USD vs SGD Weekly Chart

The USD vs SGD chart looks promising, the candlestick completed a morning star and the probability of uptrend is high, this is also supported by both its RSI and Stochastic movements. The resistance for this counter is SGD1.4119, SGD1.4331.

A project of the pattern, in case of a double bottom or ascending triangle, the target is SGD1.4419.


Fig 2 NZD Vs SGD Weekly Chart

NZD vs SGD has completed a wedge and even broken out of its envelop. It is presently rebounded back close to its previous top before reversing. Base on its wedge formation, th target is SGD0.953556 per NZD.

The interesting part of this NZD is that the wave pattern reflects an ABC since its break out. I beleive there is a caution if one is to short this counter (not that you don't because the margin looks good).

Its 21 weeks moving average is supporting at 0.998435 while 89 weeks moving average at 0.969625. Both RSI and Stochastics are turning from top so we should be seeing it go down.


Fig 3 AUD vs SGD Weekly Chart

Similar to NZD, AUD has also completed a wedge, broken the seal and moved down. It has recently retraced to its previous high before coming back down. Again similar to NZD, it is having a 3 waves movement signifying counter wave. This is thus likely to be a correction.

The RSI and Stochasitc are both reversing from the top and supporting the down turn. However, its objective will still be higher than SGD1, more like SGD1.15197.

Its nearest support so far is the 21 weeks moving average at SGD1.2493.

NZD vs USD

My impression of New Zealand is that it is closely link with Australia, not only with similarity in history, culture and its economy. Both countries as far as my understanding goes depends heavily on agriculture development. Strange as it may seem, I am finding NZD behaves differently from AUD against USD.


Fig 1 NZD Vs USD Weekly Chart

I am not saying that there is still a risk investing in NZD right now, it has broken a long term support trend line and it could be on a rebound before it heads south. Hoever the formation of its congestion interests me. It formed a downward wedge indicating that this currency is heading North against USD. Base on the measurement, NZD should heads upward to USDo.783 per NZD.

While the indicators are reaching the top, my feel is that there are stil room for development for RSI and Stochastic. At present it may probably be making a flag or penant consolidation before it moves further. The only obstacle in its way would be the on coming Gann Grid resistance at USD0.7546. At the same time, it is supported by its 21 weeks moving average at USD0.713

Nevertheless, an important trendline support is broken, probably this would be its last rush before retreating.

AUD vs USD

I think I have been writing( well, it is actually type) on the same few counters for quite a while and lately I am a little bored with so little movements. Tonight I want to write about something different. I have in my earlier entries talked about the strange phenomenon that whenever USD rise against SGD, AUD will fall. well, I took a look.


Fig 1 AUD vs USD Weekly Chart

The chart has produced an upward wedge which means AUD is going bear against USD. There are 5 points of contact in the wedge making it prudent. Once the chart has broken out of the wedge ( which it did ), its target is USD0.7779 per AUD.

While its recent rebound allowed AUD to go back close to its previous high, it failed to break higher and presently retreating due to the Gann Grid resistance. The support level at this time is USD0.8914 per AUD.

With what's happening I am now more confident that USD is rising against SGD.

DJIA: Divergence on indicators

I have been waiting for divergence on DJIA the last round. As the no indicators have not shown any divergence then, I reckon that there would still be some upward movement left for DJIA. As I check up the chart for DJIA today, it seems to me that divergence is observed on the daily chart for Stochastic and RSI. However, the divergence is very mild and would be difficult to note unless with the help of software. So if the divergence is valid, is DJIA reversing?


Fig 1 DJIA Daily Chart

The divergence is only observed not only on daily but also weekly chart, so a move follows ( when down turn ) would be quite sustainable. I feel that DJIA is about to break the envelop support of the wedges ( yes, there is a BIG one and a small one ), when that is done, it would probably be on its way down.

In term of wave count, it is not straight forward and rather tricky. I can only say that this is the best fit I can find. The whole thing would be a huge Zig Zag ABC wave and not a progressive 1-5 wave pattern base on my perception.

Now the chance of going down is much higher than last week.

HSI on C of B now...

Fig 1 HSI Weekly Chart

Well, from the looks of it, HSI should be reversing up tomorrow because of the followings:

1) 21 weeks moving average supporting at 21,307;
2) HSI reaching the envelop support level of 20,940;
3) The RSI indicator is reversing up. The only thing bothering me is that it is in the middle of the ocean, ie. neither bottom or top;
4) It is most likely doing the C of the B wave;

So even if it heads south, there is very limited down side due to the envelop support. However, I might want to stay away from HSI still because of the wedge target. Eventually, it will reach the target at 19,647.

Cosco Target 1.55......

The last round I updated this counter, I mentioned of its breaking of the wedge envelop and that it should be heading to 1.51 region. I have left it behind for a while and when I looked today, it has grown and is now resisted at 1.37 region.


Fig 1 Cosco Daily chart

Both indicators are heading south, with divergence. So I guess correction in inevitable. Yet amongst the negativities, it seems to be creating a flag (supported by the volume pattern). If base on this measurement, the target should be 1.55.

Would this happen? For the time being, I think it is around 60% chance of it mainly because the wave count seems to show it to be in a 4th wave of this entire move. May Cosco needs one more divergence before it is willing to come down.

STI 2,908 again?

I don't know what to say, the STI keeps coming back to 2,908. I think the heaven is asking me to buy 4D......


Fig 1 STI Daily Chart

Lately I am having a little doubt about my earlier wave count, The main reason is because my wave 2 is a little too small and it is more like part of a minute wave. If this is so, then the 5 waves have already completed and the 4th wave is actually either a 2nd or B wave. The latest development would likely have to be a C wave. Presently, if base on my judgement, Either way, both c or 5th wave is a little short and probably there might still be some room on the upper floor.

Base on Fibonacci projection, the next level should be its 23% mark. STI is getting close. Resistance at 2,972(would this be another 4D number?). The RSI indicator while turning, has not yet provided a divergence against the STI. The next phase would likely be a correction resulting in a 4th wave of this c (or 5th wave).

Tiong Woon, B wave

Fig 1 Tiong Woon chart

I was looking at this chart on Tiong Woon. It has come down quite a bit after its peak @ 0.985. If I do a simple wave count on this, I suspect it is in process of a B wave and I sense that there are more rooms down there for Tiong Woon. O.60 might be a good level of indication, if Tiong Woon breaks below this line, it would be a confirm C wave down.

Gann Grid on STI

I have a busy day today. I have recently applied my mind map to project tracking after I managed to get a HUGE whiteboard in my lab. I don't know about you, for me, it is the bigger the better. I can squeeze more information to enable a bird's eye view over project management. I actually managed to follow up with every single project's progress and more detail discussion with my Engineers over design issues. By noon, all work needed are properly carved out and execution in progress.

Probably my dis-involvement with the stock market at the moment also play apart. I have decided to skip the 5th wave because of the uncertainty. However, it still worth a continuous study of its chart at night for interest and practise on some new tricks.


Fig 1 STI Daily Chart

While going through STI last night, although I have noted the downward movement of the indicators, one parameter interests me, the Gann Grid lines. My alignement of the Gann Grid line is base on the highest point of the previous major wave and the First major low after that. It seems to me that the closer the chart to the point of measurement the more relevant is the Gann Grid. Every time, the chart touches Gann Grid, there are sure to be some abnormalities.

STI last night touched the Gann Grid and while indicators were down. The measurement I have for the Gann Grid was 2,908 (again?). It was significantly higher than the close yesterday (@2,888). I put down the Gann Grid value with expectation of STI supported with gap up or down after meeting the line.

It is some what interesting that it went up today with the support of Gann Grid.opening higher than 2,908. However, I see a weakness in STI because it did not manage to gain much ground and was clinching onto the grid line. I suspect tomorrow STI will go below the Gann Grid, and base on my wave calculation, we should be completing 5th wave anytime now, it may even be over already and we are seeing wave "A".

The support for STI is now at 2,873 while resistance created by the Gann Grid is 2,931. Let's see if STI can pull it off one more time.

USD wave count (testing)

Okay, I am still a little shaky on wave count and certain part of it requires intuitive guess. Anyway, here goes.


Fig 1 USD Weekly Chart

Looking at what USD has done so far, I suspect it is performing a huge counter wave after its descent from higher than SGD2 per USD. I am expecting that this would be the "C" wave at the moment, this provided my wave count is right. So far my exopectation of an up move is also base on the 14 weeks RSI reversing up from the bottom after a divergence.

HSI....

Fig 1 HSI Daily Chart

I am making this entry short. I just want to say that "Gosh! I love it when I am right!!!"

Except for a mild protrusion, HSI retreated downwards. I guess there are someone in China knows when to implement destructive policies to support reversal.....

DJIA does not seems to be going down yet...

I took some time off from my chart read last night because I was not feeling well emotionally. The cause? Well, let's just say that I got bitched by my comapny's legal counsel at the end of the day for touching her flowers. I believe she was at the start of learning flower arrangement and she brought her "home work" to work. The thing was in a mess when I saw the way she arranged it and I made some modification.

It was real surprise that she has such a strong reaction over the matter, insisting that I have no right to touch other people's stuffs. She put her stuffs in the public dormain in the first place and who else can she blame than herself when her things were touch?! Worse still she have the cheek to plagarise the arrangement concept at the end of the day. If she expect me to respect her and her properties after the session, dream on, bitch(pardon my language)! There is not a single inch on you that worth my respect.


Fig 1 DJIA Daily Chart

Now back to the DJIA after my ranting, it seems like something BIG happened when I was out. DJIA dropped, STI dropped this morning together with Nikkei and most seriously HSI (500+ points). I recall some news talking about China trying to curb something, again. seems like they always know when to pick the time for these kind of things.

As I look at DJIA, while the move was a real stretch last night, I did not see much action in the end. Plus both its RSI and Stochastic have shown no divergence as yet. I suspect that it is not ready to go down although a small correction would happen. Afterall, it is still inside its wedge.

The resistance level I see for DJIA tonight would be 10,691 while support at 10,559.

Wing Tai potential for an up move

I don't feel like writing much today, just want to go to bed as soon as possible. So here it goes.


Fig 1 Wing Tai Daily Chart

There are 2 things that attracts me to Wing Tai, one is the 3 white soldiers. The other is the flag. I was expecting a pull back after the 3 white soldiers because the move was relatively strong. While the last few days has shown a pull back, the volume is reducing, giving a typical flag behaviour. So it is likely to move up to a level of 2.168.

although the RSI is at the top, it has not yet formed divergence, so there is a good chance that this flag is going to realize.

STI playing hard to get...

My last entry took concern over STI's potential Engulf candlestick pattern and an anticipation that if STI is lower by Friday (which is common for a Friday's reaction), it should be heading south by Monday. Seems like STI won't want to make it that easy for me.


Fig 1 STI Daily Chart

What STI has created now is a Harami Cross. Because of its longer bar being bearish, it should see the STI moving North, because this is supposed to be a reversal pattern.

As for the indicators, Stocastic is moving south, but RSI seems to be reversing up. I was kind of expecting this move because, under normal circumstances, RSI is supposed to create divergence before the actual move begins. If this is so, my 3,003-3,010 level might still be reached.

As for the wave count, it seems to me that STI has also completed a minor 5-wave move in between 2 corrections. So this might still be a B of the the 4th of final wave.

A wedge within a wedge

I normally stop my charting activity on Saturday, partly because I treat this a family day and by evening time, I would be drained by my two kids. However, today I am testing out something different because I want to relax tomorrow evening.


Fig 1 DJIA Daily Chart

I was going through what Dow Jones was doing this week when I noted the followings:

1)DJIA is completing a minor 5 waves after the 4th;
2)DJIA is creating a wedge;

I don't know, probably I am really obsessed with wedges, either that, DJIA is over due for fulfilling its promise to the huge wedge it is forming.

No doubt, it is not surprising that DJIA still heads North simply because it is still moving within the proximity of the wedge. Only when it crack the envelop support of the wedge that we would be certain that it would head south. Probably for now the most crucial one would be it cracking the smaller wedge.

Is the economy recovering?

In recent months ( actually only a few months ago ) many countries are eager to declare that they are out of recession. Singapore was no acception, the Government was really in a hurry to declare that Singapore is out of the recession base on 2 quarters of consecutive growth. Taking the contrarion stand, I feel that it is highly likely things are not that okay.

I went to the aquarium shop just yesterday to top up my carbon dioxide cannister. I need the Carcon Dioxide for the water plant at home. While I was there, I have a chat with the shop owner. It seems that the business has actually fell greatly during the 4th quarter, almost like no business at all! All the manufacturers are also holding back their manufacturing volume.

Even for my office, we are not seeing any celebration of record high sale. There are even rumour flying around about not having bonuses when come Febuary. I don't see much activities at the loading bay neither, indicating that we have not been loading much order to our vendors.

If I keep seeing such a bad state of the market, where the hack is the indication of recession over? Could the rise of STI be artificial to paint a rosy picture of market condition when in reality the economy is turing?

I personally believe there is a real need at least by the Government to have the stock market go as high as possible,and for one reason, election is coming.

Correction / Reversal ahead?

Today is quite an uneventful day for me, all my department projects are in progress and I am eager for some Engineering satisfaction. While the projects are running very smoothly, I kind of having a sense of insecurity. It is like something will always go wrong. At present, the most important thing is timing. While market is still not as great, the component lead time is stretching and in short run there is no remedy to fix this.


Fig 1 STI Daily Chart

Meanwhile, the stock market today is in a sea of RED, literally, everywhere is falling!!!!! Actually it is not that bad today, STI for instance only dropped 17 points by the end of the day. However, the indicators are telling that it is due for a correction, if in Eliott's term, counterwave. I believe that this is the 5th wave and while it would climb to its peak, there is still a need for minor correction from time to time. The candlestick is also providing clue of a reversal pattern, known as engulf, it will need tomorrow for confirmation.

As I look at RSI of STI, it is turning south from the top for both 14 and 5 days. However, there is no show of divergence, yet.

HSI made a spectacular move today....

I was quite busy today with 2 meetings lined up for me. Happened that they are held in the west side of the island with one happened at 9:30AM while the other 3:00PM. I did not have much time monitoring the stock market. I only managed a glimpse of the indices through Yahoo.com and noted green all over, which seems expected. What is not expected was a strong showing on HSI! At first glance, I saw 300+ points up and before I left office for the meeting, it hit +450 from previous closing!

I got curious on this index and have a little check out, especially when it was supposed to be heading down towards 19,647 base on its wedge formation.


Fig 1 HSI Daily Chart

The HSI chart indicated HSI gapped up on opening and did not look back since, at the end of the day, it went up a total of 456 points at closing. Nevertheless, it seems to have reached its limit because it did not break its previous high. The set up seems to be a B wave at this moment and in progress of developing a flat, or rectangle, that is of course if HSI reverse from around 22,479. I see this as a resistance point for HSI.

Cosco break out

After my last "Abandonment" of Cosco, I continued to keep Cosco under KIV. The counter then was not really attractive after it broke down from its triangle. After much rest, I found this counter now looks more interesting.


Fig 1 Cosco Weekly Chart

After it broke out of its triangle, it continued to build a bigger downward wedge and since end of last week, it broke upwards from the wedge, and measurement would bring this counter to SGD1.50. As of today, it has moved up against a mildly bear market from its previous close of 1.19 to 1.23.

The caution to this counter is that the daily indicators are reaching the top, so probably there might be some pull back before moving higher.

Using Fibonacci on STI

Other than the book on Elliott's waves, I have also bought another book "Fibonacci Trading: How to Master the Time and Price Advantage" by Carolyn Boroden. To be honest, I find this book less appealing. The author assume the readers to be well verse into Fibonacci and share her trading strategy straight away. One reason would probably be that she is not into wave count and thus not equip with skill to merge both techniques. Nevertheless, she uses a lot of charts to demonstrate how she actually apply Fibonacci.


Fig 1 STI Weekly Chart

In this chart, I uses 2 techniques of Fibonacci available from Metastock. First is a Fibonacci retracement from the down wave which shown STI broke out of the 50% and the next level of 0.618 with no resistance in between. The 0.618 level is located at 3,003.

The other I use is Fibonacci Projection from 1st to 3rd wave. Its projection to the next level is 123.6% @ 3,010. This seems to be very close to the value I have calculated base on the Flat break out. If base on Carolyn's technique, I think this would be the resistance level, coincidentally, a resistance is located near by at 2,972.

Elliotts Wave on SSEC

I was also testing out Elliott waves on SSEC to try pin-point its position. While doing so I kind of understand that this is DEFINITELY not exact science, it is very subjective and your one presupposition of market play a part.


Fig 1 SSEC Weekly Chart

If I consider the whole down trend move to contain a 5 wave pattern, which should fit wave A profile, Wave B would be a Zig Zag pattern of abc. If this is so, it is likely the B wave has completed and SSEC has began its C wave pattern.

Basing on this formation, at least from my point of view, SSEC completed its 1st and 2nd of C wave, it will be coming down with a 3rd and more agressive wave.

It is now resisted by its Gann Grid resistance of 3,325. While the 21-week moving average support at 3,081. While weekly indicators are turning up, its daily indicators ( not shown) are not as positive.Both RSI and Stochastic are toppish with possible down trend to follow soon.