Dow Jones, Nikkei & Hang Seng Up-date 26/6/2022

 Feeling a little bad about my AWOL for 2 weeks, I have decided to add in another entry.

Fig1. Dow Jones, Nikkei and Hang Seng Weekly Chart

Let's start with Dow Jones. 

I estimated that Dow Jones would fall further in in my last update3 weeks ago, it came true. It went below the 144-week moving average support. Dow Jones is by far the worst performing of the 3 even though it recovered from the fall the week prior. 

Where is it heading next?

The recovery bar is stronger than the fall the week prior, it stopped and rested above the 144-week moving average. In addition, it bounced back from the 61.8% projection support level. 

The coming week will give a crucial indication of its direction. If it congests in a narrow range and stay within the body of this week's bar, the chance of further up-climb is high. 

If it climbs further before retreating in the coming week, or a full retreat, losing most of its gain, we will then see a continuation downward movement.

Personally, it is just my gut feel, Dow Jones is not ready to climb.

Let's move on to Nikkei.

I wrote in my last entry that there is a chance it might fail at 55-week moving average mark, it did, forming a shooting star and came right back down before recovering to some extent.

While its movement is similar to Dow Jones, the degree at which Nikkei erode is very different. It tested the previous low for 2 weeks, while managed to go lower, it retreated. Furthermore, it closed above the 144-week moving average as well as the 61.8% projection support level.

The situation with Nikkei, I would say, is not as bad as Dow Jones. This is also support by the MACD which is seen climb up-ward gradually. It is possible that it is reversing at this point of time, the bar of coming week will be a good indicator to me.

Last but not least, Hang Seng.

I mentioned in my last up-date that Hangg Seng will be climbing but it may still be a correction to 55-week moving average. 

True enough Hang Seng did not fall like the other 2 indices, instead, it went into a small correction phase and continued its climb this week, ending above the 21-weekly moving average. 

My present prediction remains the same, climb towards 55-week moving average, coincidentally this is also the 100% projection resistance level. It's degree of steepness will determine if it remains a correction of a trend reversal has happened.

Crude oil Up-date 25th June 2022

 I promised myself to keep up-dating this blog weekly. That promised was made right before I went AWOL for 2 weeks. Even with reason, it is not justified to do so, it involves discipline which is important to trading.

I went back to Malaysia with my family to visit my parents, I was involved in cooking and running erants the whole week. My parents are in their mid 80s, they stay with my youngest brother who unfortunately was in a divorce proceeding with his wife at the moment. I am kind of worried how he is coping, good thing is that he picked up drumming. My wife tested his drum set and she seems to like doing it as well, she said it is therapeutic. 

I estimated in my last up-date that there is a strong tendency for crude oil to fall and it is a matter of waiting for the signal.

While checking my social media (Facebook.com) this week, I came across a chart on crude oil, it caught my attention. 

 

Fig1. Crude Oil Weekly Chart

The chart I use comes from Finance.yahoo.com, which I consider relatively good platform for chart read, even though it does not include some tools of my preference.

Signal came the week after my up-date and confirmation with a long bar down. It is stopped by the 21-weekmoving average this week. While seemingly a hammer, the body remains red and resisted by the 8-week moving average.

So where do I think crude oil is going?

Based on my projection calculation (Yes, I have to dig out an older excel sheet to perform the calculation), crude oil is close to reaching 61.8% projection (USD100.46) support this week, explaining the reason for its long tail. 61.8% projection line is however not a strong resistance support, and many times result in a correction instead of  a reversal, this is especially so when it is a bar with long body prior to this, I should expect the next support level to be USD86.11.

If downslide continuation is true, then USD92.00 is crucial to crude oil, it is the neckline of a double top formation. Crossing this line will lead to further objective of USD55.36 for crude oil.

That would be good news for us, isn't it? 

Hang Seng, Nikkei and Dow Jones up-date 5th June 2022

 As the review of these 3 counters are becoming more regular, I will just create  a more generic title with name of counters and date of review.

I purposely put a gap of 2 weeks after the last review to allow them with more development before further comments, and the developments are interesting indeed.

Fig 1. Nikkei weekly chart

In my last update, I noted that Nikkei is with highest chance of reversing up, the observation remains to be true to date. While the climb is with some shorter bar, they rarely overlap indicating more will power to go further. 

Nikkei has just crossed its 55-week moving average this week, and it stayed above this resistance level. I would expect the counter will pause in coming week as it needs much energy to break through, and most of the time. 

Assuming that the projection set up is true, resistance is between 28,116 to 29,689. 

It is however possible got this move to fail due to Bollinger envelop resisting at 28,674. In addition, crossing of moving average (especially 55-week) is a time with most uncertainty, and the chance of failing in continuation is high. 

So next week is crucial. If a reversal is seen in the coming week, then I will have to change my opinion of this set up.

Fig 2. Hang Seng weekly chart

The behavior of Hang Seng is interesting at this moment, It is the only count on my portfolio with moving average structure maintaining a bear. At the same time I witness a higher low indicating a possibility a higher climb.

Of course, the reversal bar on 13th of March 2022 is significant as it climbed upward with strong momentum. The question is whether we are seeing trend reversal or counter wave.

For the time being, the gradient of the present climb is similar to that decline between April to May 2022, indicating similar momentum. 

Further more, the projection pattern formed with the higher low on 8th May 2022 leads to measurement of 23,724, coinciding with the 55-week moving average. 

As such I expect Hang Seng to climb further but at the moment I am not seeing a trend reversal, and more of correction.

Fig 3 Dow Jones weekly chart

I leave Dow Jones to be the last chart I go though this week, because this is by far the most interesting one. It gives conflicting information and confusion with its set up.

First of all, Dow Jones rose with a steep climb on week of 22th May 2022, followed by a short bar in the opposite direction.

It also bounced after touching 144-week moving average while I see 21-week moving average crossing 55-weekmoving average downward. On top of that, it touches the 100% projection support.

Why am I uncertain with Dow Jones?

While the bounce seems strong, it is possibly due to the crossing of moving averages, giving a false sense of climb. Considering its continual decline which is relatively steep. I have to consider the main trend at this moment to be down. 

At the same time, the short bar after a long bar does make me feel that it is pausing after its up-burst, which mean a possibility of climbing higher. 

A decision have to be made, so I invoke Elliot Wave which I have not used for some time. If I consider the movement since beginning of this year, I can see a 3 wave pattern completion. If what I see is A wave, I will expect a B wave which again is a 3 wave pattern but likely to be a rectangle type of behavior. Even if it is going up its height will be limited to below the high of 2nd January 2022.

Another observation I have is that while the climb is strong, the body of bars are overlapping, I will have to assume a weaker momentum. And when it's closing falls below the8-week moving average level, the chance of Dow Jones decline is much higher. 

The next 2 weeks are very important to Dow Jones.