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.