The result of being emotional

 In the last 2 weeks, my entries have been emotional. As a result, my analysis were biased.  

This is especially so when I looked at the chart of crude oil. When I looked at the chart, I very much wanted it to go down, deciding on its direction based only on the formation of a shooting star. Further more,  my focus on the Russia-Ukraine war in my entry spent up my energy, and the analysis of the oil chart became less crucial in comparison, I became dis-interested when looking at the chart, leading to yet another wrong analysis.

Of course some may say that " this guy is an idiot by not factoring in the fundamental of the war", it may be true to some extend and I have accepted the principle that price factor everything in technical analysis, thereby holding the belief that all information can be obtained from the chart.

So what shall I do? 

My entries have to focus more on my chart observation and if I am into a unfamiliar territory (such as crude oil chart with different setting), I will have to be thorough in my analysis before concluding its course. If my entry is to focus on other topics, I really should use my other blog.

So let's go back on charting. Few weeks ago, I talked about indices alignments and confirmations, basing entry on Hang Seng, Dow Jones and Nikkei. So far I got it right on both Dow Jones and Nikkei, while  slightly off on Hang Seng. 

Fig 1 Hang Seng, Nikkei and Dow Jones weekly chart

I estimated that Hang Seng should moved up-ward until it reaches 55-week moving average before continue on its descend. It actually retested the 21-week moving average and failed. This led to its continual down slide.

It is also interesting to note that the week prior to the war, hammers were formed for both Dow Jones and Nikkei. Apparently the market was anticipating the beginning of war in the coming week. Well the war has begun this week, why is it that these 2 counters failed to go up, since wars normally result in a surge in the market?

My guess is that while the invasion led to the unity of Europe and mobilization of  troops to many eastern countries of the European union as well as weapon donations to Ukraine,  they stop short of active participation in the war. Instead they resort to sanction to pressure Russia to withdraw, while it will really harm Russia in the long term, sanctions are seldom effective. As long as people can endure the hardship and continue to  allow  their country (Russia and Putin in this case) with their actions, the war drives on.

Noting Newton third law of motion, For every action, there is an equal and opposite reaction. Sanction on Russia also means  damages on those who execute that sanction, as a result, it could harm the countries that enforce the sanction.

At present, Hang Seng reaches its minor 100% projection support  (single wave), there is a tendency that  it may correction at this point. Considering the 55, 89 and 144-week moving averages crosses each other at the same spot, there is a chance that Hang Seng will continue to slide further.

Nikkei is also interesting because its descent is stopped by 144-week moving average, at the same time, it is quite clear the formation of a double top with its objective measured around 23,004. This also coincide with its 161.8% projection level. Its 8-week moving average is also crossing 89-eek moving average with a golden cross,  making its further descent more plausible.

While the many media praised Biden on his state of the union speech, the market nevertheless not impressed, even with such a strong rebound with a loooooong handle hammer, it failed to climb and resisted by its 55-week moving average. It seems to show some weakness in the US market. At present it hovers at its 61.8% projection support, normally I will classify this as weak and mostly a correction or a minor congestion before it continue with its descend. The next support level I see is 29,844. If this is so, US market may be in trouble.