Federal reserve considering slowing down of rate rise....

 

(Click photo for news link)

I have an entry last week about the possible weakening of USD titled Is USD weakening now? on 23rd November 2022, I only used SGD for comparison, partially because I stay in Singapore. The other was because I was a little tired, I have just travelled back from Malaysia, and I have not fully rejuvenated yet.

USD was at a crucial point of uncertainty as it reached a triple moving averages support level, making it difficult for USD to continue its downslide against SGD. Never-the-less, I placed my bet on eventual continuation due to its present set up, especially when it was resisted by the 55-week moving average.

On 24th of November 2022, news came out that there is a consensus to reduce the rate hike. By this time, USD has fallen quite a while. I noted the beginning of a fall in Interesting development in SGD...and I missed the entry point on SGDMYR on 6th Oct 2022 but at the time, I was uncertain. It was only on further development that I became more certain by 16th October 2022 in Monetary intervention on SGD and a case for the currency

EEnough about SGD, how are other currencies performing against USD?

Fig 1. Jpy weekly chart

Let's start off with JPY. The market was till panicking with JPY a while ago considering its steep fall against the USD. Apparently, the reversal came on 16th October 2022. It has so far tested 21-week moving average and now resisted by this moving average, it is possible that JPY will continue its journey to the next support level of 55-week moving average.

Using projection on this pause, I obtain a measurement of support between 131.199 to 135.41. Coincidentally it is close to where 55-week moving average presently lies, 131.24.  It is also close to the previous bottom of 130.41.

It is possible for me to use the top as one of the references, however, I will use a single sub-wave 3 for measurement. The chance of this objective reached is higher.

Fig 2 EUR weekly chart

EUR behaves in a similar way as that of JPY, except that it started a few weeks earlier than JPY on 25th September 2022. However, it is presently floating between 21 and 55-week moving averages.  

Same as JPY, I will use sub-wave 3 to be used for measurement. However, as it is afloat, it is possible that EUR might move towards 21-week moving average before going down further. 

Adopting projection, I obtain support between 0.9048 to 0.9327.  This range is coincidental with the 89 and 144-week moving average. However, it is my belief that 55-week moving average is prudent in many cases, as such I consider an additional support at 0.9506 for EUR decent.

Fig 3. GBP weekly chart

I did an entry on GBP in GBP s looking good..... earlier but I compared it to EUR. Comparing it with USD, let me feel that DBP is more aggressive than others. While JPY and EUR are pausing after a plunge, GBP has already broken through its congestive stage and on continuation downward. It is close to reaching the 55-week moving average as week speak.

Using projection, GBP has past its 61.8% projection support at 0.8315 and the next support level is 0.7917, by when reaching its 89-week moving average as well as its Bollinger band lower envelop. The possible support addition to these is the 55-week moving average of 0.8147.

So far we are seeing USD weakening against the few major international currencies. How is HKD doing then?

Fig 4. HKD weekly chart

Evience of HKD strengthening against USD only visible on 6th November 2022. This is due to HKD ceiling against USD preventing it from its natural development. I won't do much measurement until more development on this counter. As far as I am concern, it is only stopped  50% retracement, and by the end of the week stayed above the 144-week moving average.  

Gapping during the last 3 weeks of descent further demonstrate potential for further down slide. The only problem is that the weeks end with much recovery, indicating uncertainty in its descent. The moving averages also indicate that it may not be ready to go down just as yet. I suspect that there might be a correction on the way. 

Fig 5. CNY weekly chart

While HKD descended from brink of its limit, CNY has not, it was allowed to develop its pattern. 

The reversal of CNY came after 30th October 2022, much later than GBP and EUR. it has only broken through its 8-week moving average 2 weeks ago and stayed below this support turned resistance by the end of this week. 

However, I am pretty uncertain about this counter. while it is seemingly on a down trend, its bars are all positive. The counter can go either way.

At this moment, there are much uncertainty in this counter that I will refrain from establishing measurement. I will do this later. 

Is USD weakening now?

I have voted on 19th Nov 2022, and I thought that was it and I would refocus on chart. Apparently, I was wrong, because new issues continue to emerge as the result led to no one political alliance managed to gain even a simple majority, and they cannot work with one another due to their past crossing of swords. I have given an update in Hung parliament? Coalition government? Minority Government? in my other blog. Now it leads to the Agong has to hold a meeting with council of Sultan as this has never happened before in Malaysia. 

Now back to charting, I have an update on SGD a while ago titled Monetary intervention on SGD and a case for the currency (16th Oct 2022). It seems that USD has fallen further since my update.

Fig 1. SGD Weekly Chart

In my last update, I mentioned the possibility that it may fall till its 8-week moving average and worse 55-week moving average. It did not stop at 8, 21 or 55-week moving average, not even 89-week, but 144-week moving average. It closed below its 89-week moving average by the end of the week. 

The descent is steep and at present, and to me, the short bar in previous week is a possible sign of a short pause. Plus, the behavior of its previous ascension was mor gentle and I suspect it is a counter wave, considering that it also did not cross the previous high.

I can estimate with a zig zag pattern the projection supports are between 1.300 to 1.3569.

There is another support level that I am with some hesitation. The pattern formation has not yet completed. It is a POSSIBLE head and shoulder. However, I can draw an assume neckline for this and if it crosses with conviction, I will see a firm formation.

For the time being, I use the expansion measurement deducing the support at 1.166.

With no clear majority...

 19th Nov 2022 marks Malaysia's 15th general election PRU15. This is by far the most complex round of election with some constituencies having up to 10 candidates. With multiple party break ups, many parties and alliances are formed to contest in this round of election, people are spoilt for choice. However, only a few major alliances really powerful enough to withstand this clash.

The result is: No clear majority even though the top 2 alliances claimed to have majority to form the government. The fact that these parties formerly claimed not willing to work with one another making difficult to achieve that objective, unless of course they swallow their pride and integrity "FOR THE GOOD OF THE COUNTRY".

While I went to the market today, many elderlies were gathering discussing about what has just happened. They imagine the nightmare of anarchy where no prime minister to decide the direction of the country. 

I am on the other hand very happy as this is the result I dream of: With no clear majority, whoever is the prime minister, and the ruling coalition will SUFFER! They will be held accountable by others, and they have to on their toes on every policy introduced.

This will be necessary since we are seeing hard times coming. 

However, this blog is more for technical analysis than politics, the latter is for the other blog.

I am not sure how PRU15 will affect the market tomorrow. Economy wise, Malaysia has little influence on the world market. I will, however, still proceed with reading MYR and KLCI (KLSE), for record purposes and to track the accuracy of technical analysis.

I have entries on KLSE in The result of multiple years of political turmoil in Malaysia, and MYR in Malaysians are getting poorer...?I have predicted resistance for MYR at 4.80 to 5.40 ( it passed the short term resistance of 4.59 to 4.585), while support level of 1,484 to 1,400 and target of 1,400. There was also a head and shoulder delivering a support level of 1,339 to 1,255.

How did I fare on these predictions?

Fig 1. MYR weekly chart

For MYR, Mahathir is not ready to meet Soros at 5. In fact Mahathir has lost his deposit. 

While meeting the zig zag objective of 4.585, it has still to reach its expansion as well as its triangle objective of around 5.40. 

For the last 2 weeks, MYR has been strengthening after its peak at 4.746. However, the plunge every week was strongly supported by the moving averages that it has crosses, leaving a long tail behind.

My suspicion is that there is further strengthening of this currency testing its 55-week moving average at 4.415, coincidentally the envelop of the triangle. It is possible for the counter to reverse at this point, especially when the moving averages are with strong support for an up-trend.

What of KLCI (KLSE)?

Fig 2. KLSE Weekly Chart

KLSE has reached my estimated support of 1,400 and came with are strong rebound. it however, was stopped and congesting at the 21-week moving average while supported by 8-week moving average, in another word, it is stuck in between. It may need some energy to break through.

What happen if it breaks through?

There is another strong 55-week moving average as the next level of resistance, coincidentally the neckline of the head and shoulder. 

Right, there is another objective that KLSE yet to meet, 1,339 to 1,255 as mentioned in the l;ast KLSE up-date.

Apparently, it is not a good time to take over the government, those who have lost may curse and swear now but may be glad it is not them to answer why the government can't handle the worsening economic performance.

As for my favourite candidate, Khairy Jamaluddin, take a good rest for now as you deserve it.

Dow Jones, Nikkei and Hang Seng Up-date 13th Nov 2022

I was quite distracted recently on events surrounding me. First was my on's GCE 'O' Level examination which only completed this week, followed by my curiosity into the tech companies namely those we used to known as dot com companies, and lately Malaysia General Election GE15 or PRU15 in Malaysia. My foccus this week is in fact the election progress. 

Even though I have only lied in Malaysia for 12 years while the rest of my life remained oversea. I still hold some attachment to the country I was born and on considered me as Pendatang and second-class citizen. Probably there is this part in me to hope Malaysia will one day change for the better. 

Seeing recent deterioration further disappoint my expectation. Most political parties have close to nothing to show and they adopt the tactic of 'he is worse than me' in hope to get elected. People are pitched to go against one another in the most partisan and racist manner. 

Words like traitor, corrupt, incompetence, religious extremist are used to downgrade their opponents for their own leverage. I cna't imagine what would happen when these people hold office for the next 5 years. my hope is for none of these parties to be able to carry a majority, forcing them to work for the people.

I did have up-dates on specific counters such as dow Jones when it seemingly turned in  Is Dow Jones reversing again? (23rd Oct 2022), and Nikkei in Let's do a Nikkei 225 up-date (29th Oct 2022), The last up-date on Hang Seng was in Dow Jones, Nikkei and Hang Seng Up-date 24th Sept 2022. I believe I need to check on this guy, for the last 2 weeks, it has been rising.

But before I move on, I would just like to share this picture.

Fig 1. Dow Jones, Nikkei and Hang Seng on a single screen

When I put the 3 charts side by side, I can't help but to notice that it looks like the move of a single counter. Can it be some form of prophecy as o what to expect in the future?

Meanwhile let's move on.

Fig 2. Dow Jones Weekly Chart

In my last entry on Dow Jones, I predicted its 55-week moving average would be the next test point with resistance between 32,159 and 32,430. Dow Jones crossed this point the week before last and closed above the moving average by the end of the week. It moved on higher last week. It is also interesting to note at this pont that the MACD has crossed the neutral line, providing more confidence of further move in the same direction.

What follows is less complex. The present trend is up, using projection measurement, I can derive its resistance between 34,452 and 36,138.

However, a more crucial resistance at this moment is the previous high at 34,281, coincidentally the bottom of the upper Bollinger envelop descent. It will not be much of an issue if enough momentum is gained. Otherwise, there is a possibility of short congestion.

One might ask: The Fed has just increased interest rate by 0.75 to further reduce cash flow, why the market continue to rise at this point? The answer is 'anticipation'.

The market is always about the future, increase interest means price is still going to rise, and pushes the index upward. It is the announcement of halt to interest increment that market begin to fall.

Fig 3. Nikkei Weekly Chart

I have in the past more positive on Nikkei than the other 2 counters. Lately however, I feel that Nikkei has yet to complete is down trend.

In my last entry, I have more downside readings than up, with multiple support level between 21,874 to 25,444, while resistance at Bollinger envelop of 29,062.

While Nikkei rised last week due to influence of US interest rate and Dow Jones, its behavior is different, I do not see momentum prior to this ascension and closing 2 weeks ago remained below the 55-week moving average. the general pattern still remains as side trend.

Its present resistance from the Bollinger envelop has dropped slightly to 29,061. in addition, I will add another resistance which is the previous high at 29,222.

Fig 4. HSI Weekly Chart

HSI is te only chart that I did not up-date for a long time. It has maintained its down trend diligently until 2 weeks ago a bar turned green closing above the close of previous week. It maintained in that direction with similar force last week. Does it mean that HSI has also reversed?

I am still skeptical if it is a reversal. While China has shown sign of relaxing the pandemic control. There was no action from them on salvaging the deterioration of China's economy. 

The Hong Kong government is more anxious as they are sensing the danger of Hong Kong collapse. However, no oe dare to overwrite their boss from the north initiating full reopening of the city, let alone setting up stimulus policies to reinitiate the economy.

With 50 -60% of Hong Kong's stock market portfolio with companies of China origin. It is an up-hill battle for HSI to reverse.

On the technical side, Hang Seng has reached 2 different milestones, meeting the objective of both a major and minor zig zags at both 18,838 and 14,753. I have anticipated a few times in the past of a correction, and it did not happen. I believe it is doing so now.

I am still seeing strong pressure from the moving averages downward even with this spike, further indicating that the down trend is not yet over. 

I believe that it will retrace back to the 55-week moving average or higher before it perform one more leg down.

There is a much larger set up forming a double top with measurement reaching as low as 8,794 using expansion. For the time being it will be better to just focus on what we might expect in the near future. The level that low might be more long term.

 

 

German Tech firm Infineon Technologies Ag

I recall in some earlier entries that I will be doing around on my ex-company, I am not sure which one though. As promised, this entry is on my ex-company, a prominent tech firm of German origin, Infineon Technologies Ag.

'Technologies' carries many meanings, the most basic explanation of this term is that it is related to electronic. What exactly does this term mean for Infineon?  

Infineon is a company involves in manufacture of electronic component, specifically active part, commonly known to people as IC or Integrated Circuit. The strength of the company is mainly into power management product and the star is CoolMOS which is superb in its power dissipation. enabling high power application.

As a result, it positions itself in power management, providing solutions to its customers in power management businesses such as power adaptors, power supplies and LED lighting solutions. In addition, it also involves in security such as RFiD and automotive (especially when the headquarter in the same city as BMW).

Unfortunately, the company for years has not any breakthrough since its invention of CoolMOS Moreover, there are internal competition between Munich and Villach for resources, as well as Singapore against Taiwan over territory control, marketing against R & D and system development over the direction of development. 

Worse, termination and retrenchment are not possible unless the person reaches the age of retirement or company in financial trouble. This is mainly due to the German law because of strong labor union. Frankly speaking, I find the company with a lot of redundancy, I found some of the jobs there with little or no purpose.

However, if I am to do a read on this company, I have to put aside my prejudice. I have been in this firm for around 6 years and my experience is not that great. I have to remove my emotion for an objective read.

I have done a read on this counter before, I believe it was about 2018. I was at a meeting with my ex-colleagues, and I mentioned that something was wrong with the firm as it was heading to EUR12. I have ignored the fact that it had not happened, and the price was still at EUR18.

True enough, EUR12 was reached but only by 2020.

Infineon is quite particular about the company's stock reaching this level. They believe that it is the price when it is possible for other companies to acquire, they do not like being bought over, even though they have done so themselves a few times. 

So how is Infineon doing now?

Fig 1. Infineon Technologies Ag weekly Chart

I have prepared this chart last week, but I am more involved in my other blog these 2 weeks as it is Malaysia Election season, and Malaysia is very dear to me.

On first look, an uneven double top is visible, broke through the neckline and has been on descent 
for a while. In fact, it has reached the double top objective of around 26.95.

During its descent, it did a retest on the neckline before continuation. Using projection measurement, the pennant objective is 18.43. 

The good news is that there seems to be more support on its present trend as the descent is relatively gradual as compared to the early part of 2022. I wonder if it is due to the Russia 'special military operation'? 

None-the-less, I suspect it is in process of a B wave since the initial fall with pattern of a 5-wave movement. We should be seeing a 3-wave upward with possibility of double bottom formation if i break 29.57.

At present it has just broken through the 21-week moving average but without much momentum, the possibility might be low and higher chance of a rectangle. The thing is that the higher level moving averages are on descent giving more strength in pressing it downward. 29.9 may be the next level of resistance.

How is Netflix doing?

 

While going through the 'Dot Com' series, I come across videos indicating Netflix is in trouble. it interests me in checking on this counter.

 The last news about Netflix earlier was quite some time ago when it included a movie involving children reaching adolescence twerking. people complaint that the movie is not appropriate.

There was also another case when the employees of the company attempted to cancel Dave Chappelle, the company this time stood firm against the employees' threat.

However, I believe the biggest threat is the internet itself where sites are providing free download making it difficult for Netflix to charge for movie view. As quickly as a new release is available, download of the movie is there somewhere. It is tough to enforce copy right when come to the internet as it is accessible internationally.

However, when I looked at the chart, Netflix is not that bad when compared to other online services.

Fig 1. Netflix Weekly Chart

Netflix peaked at 700 roughly on the 3rd Q of 2021. It began a steep fall by May 2022, resting at 162. It has since been climbing back up slowly. The question here is: Is this a genuine reversal?

First of all, the fall followed a pattern of a 5-wave pattern that seems to be complete. This does not normally adhere to a down trend which follows a 3-wave, unless this is the first of the 3. 

B-wave will have to be a 3-wave pattern. With the magnitude of the fall, B-wave have to be of similar magnitude, size way. 

The recent climb of Netflix since May 2022 has presented 3 waves, it is possible that the wave is incomplete, I have not seen clear sign of reversal. A Doji top formed 2 weeks ago followed by a long bar the week after, however, it stopped short of penetrating the 8 and 21-week moving average. furthermore, the bodies of the 2 bars overlap, indicating that it is not decisive.

It may come to test the moving averages the coming week and I feel that it may retreat after doing so.  I will watch for the 38.2% retracement 367 as the next resistance level for Netflix.

It is time for Verizon's turn

It seems like it is a week to check on dot com company this week. so far, I have touched on Alphabet Inc for Google and Meta for Facebook. 

I skipped Twitter since it is going to be delisted soon. However, I did have a glimpse on the counter and if it maintained listed on the market, I would recommend this counter as it has completed a double bottom and is on the way up, probably because of acquisition process.

I was wondering yesterday what counter I should look into next. Since I have been using the charts from finance.yahoo.com for my blogs, I might as well take a look at how it is doing.

I first searched for Yahoo and could not find its chart. It took some time to find out that it was acquired by Verizon Communications Inc. I will have to look at Verizon as a result.

Fig 1. Verizon Communications Inc

It is clear from first glance of a double top formed between 2018 to 2022 and ended with an accelerated plunge. It was only stopped by its minimum objective at USD35.82.

Based on the behavior of the moving averages however, I believe it is a correction and will continue its down trend. The points to watch out for are the 8 and 21-week moving averages. 

As for wave count, I believe that the counter has not reached its end. If I use the Fibonacci retracement, Verizon is presently stopped by its 61.8% retracement. There is an additional support level at USD30.25.

Checking up on Google..... are we going to have another round of Dot Com burst again like that of 2001?

After I looked into Meta in Meta ..... there should be a moment of self awareness, it made me curious if something is happening in the Dot Com world. Since Google is kind of the leader in this arena, I asked, "why not just take a look into this counter?"

My first surprise was that Google is named Alphabet Inc. I thought all these while that it would use its original title since it is a name everybody knows. aparently it was renamed after restructuring in 2015. I was at the time spending much time trying hard to salvage my career. 

Looking back today, I feel that I was wasting my time as it is an up-hill battle to survive in a BIG organization especially when I am not into office politics which is a common phenomenon. Those at the top are so insecure about their position that they form inner circle and trying hard to outcast others. When this happens in an organization, it is ready to head down. Hmmm....I think I will do a read on my ex-company to see how true this is.

Mean while, back to Google, or Alphabet Inc.

Fig 1. Alphabet Inc (Google) Daily Chart

I have downloaded the daily chart instead of the weekly one. I was a mistake, but when I looked at the weekly chart, there is little difference in the measurement reference, s I am good with using the daily chart this round.

At first look, I am surprised to see that Google....or Alphabet, is at similar level as Meta, considering that its platform is adapted so many more people. In Singapore for instance, we call Google God, because it is all knowing. We will approach and ask God when we need clarification.

I am also surprised that it only peaked at USD151.55, as compared to Meta at USD384. As such it did not deprecate as much in percentage compares to Meta.

Nevertheless, it is on a down trend, with formation of double top or head and shoulder between July 2021 to April 2022. In addition, it retested the neckline and retreated. Based on the pattern of descent, there are 2 set ups that I can use to determine where it is likely to go.

I am expecting further decline due to the consistency of alignment of the moving averages.

Using the Fibonacci expansion for the double top formation, the 100% objective USD117.99 is reached. 

Using Fibonacci projection on the neckline retest level, coincidentally a zig zag formation, I see the next support level to be between USD80.52 to USD96.53.