Dow Jones, Nikkei & Hang seng Up-date 3/7/2022

When we set a goal, we will usually find life throwing barriers after barriers at us. 

I determined to have at least 1 entry per week, I went back to Malaysia for a week, breaking my patterns for 2 weeks. I penalized myself for the break to my blog last week, my mother-in-law's domestic help on-leave for 3 weeks starting this week and my mum-in-law staying at my place during the weekend, loading my workload at home, thereby risking another off-course on my blog.

Nevertheless, I managed to find some time in the morning for this, lucky me!

So what am I going to type iin this week?

While I did an entry on Dow Jones, Nikkei and Hang Seng last week, I did not really work much on the measurements. I have decided to work out how much they are going to move.

Fig 1. Dow Jones weekly chart

I am starting with Dow Jones here. I did not have a good feel on this counter last week. This week, it went up a the beginning for the week, only to retreat after resisted by the 8-week moving average. By the end of the week, it closed below the 144-week moving average.

Above that, the bodies of the bars overlapping while trying to climb. It is certainly tough for Dow to gain momentum.

Conducting a projection measurement, Dow Jones just bounced from its 100% projection support. Based on what I was taught, this would be a point when I should load a long order as it indicates a reversal. 

However, the last few times I did this, I found the reversal was weak and almost immediately went against my expectation. 

 I must therefore maintain a short position as a result. So where are the support level for Dow? 

More immediate, I should see support at 29,564 and if fail, between 27,160 to 28,514, The target for the present set up would be 26,999 to 28,049.

Fig 2. Nikkei weekly chart

Let's move on to Nikkei, I was more positive on this counter as the descend was more gradual. I anticipated the possibility of reversal. However, it failed after its test on up-side and stopped below both its 61.8% projection resistance, 89 and 21-week moving averages. 

In addition, the bars are overlapping, the momentum is weak.

The chance of further downslide is high.

What are the supports for Nikkei then?

The most immediate support is between 24,994 to 25,278. However, I am sensing something move serious, a double top formed between dec2020 to Feb 2022. The minimum objective for this formation is 23,085.  

Fig 3. Hang Seng weekly chart

WE finally come to Hang Seng, while affected by other indices, it managed to climb higher and closed positive above 21-week moving average, even though we are seeing a shooting star, the set-up is giving me more confidence that it is still on the up-climb.

The only concern I have is the reduction in its momentum. The gradient of its latest climb is less than that of its descent. 

Anyway, assuming it continue in its climb, I should see resistance at 23,418 to 23,759, that is if it is able to break through its present resistance of 22,039.  

If it unfortunately fails and reversed, I should see immediate support between 18,548 to 20,390. 

Fig 4. Hang Seng monthly chart

I am rather curious about Hang Seng's behavior. Is Hang Seng truly going up indicating an improvement on Hong Kong and China's situation?

I zoomed out It is really not looking good. I am not too sure how big a scale can technical analysis can go, the deterioration since January 2018 may have formed a double top. Question is: Can a top formation take 5 years to form?

Based on the 100% expansion measurement, Hang Seng is going to hit at low of 8,500, close to a quarter of its peak at 33,279.

Is this possible? Well, if we adopt Marvel Dr Strange multi-verse ideology, this is one of the possibilities. 

For the moment, though, the more immediate influence is the projection objective based on January 2018, March 2020 and February 2021, Hang Seng actually bounced back from its 100% projection by March 2022, there is a possibility that it might be in the process of bottom formation, time will tell.