Dow Jones, Nikkei and Hang Seng up-date 23rd April 2023

This is the second week of school for both my children, both decided to choose a polytechnic located in the west while we stay in the east.

For them, it is an hour and a half of travel one way. this ends with me fetching them to school to cut down travel time. However, I do not send them to school every morning, only Monday to Wednesday as well as Friday, when I also send my wife to work.

However, this means that I regularly have breakfast with my kids at their school, which is cheaper than usual. So there goes my intermittent fasting.

What's more hectic will be the coming week when I will be traveling to Kuala Lumpur to finalize my father's departure. The coming Friday will be the 49th day since his departure and the event will be concluded. He will be guided back home and raised to the ancestral altar.

As for the market, at least the behavior of Anheiser-Busch was quite to my expectation. It did not drop further due to the support levels it is resting on. It however, continues to hover. I suspect it is due to the management team still uncertain on how they want to handle the situation, and traders continue to on hold their action pending the company's decision.

To be frank, if I am the management team, the only one group of people whom I will pander to is my customer base, losing it will be disaster, competitors will take this opportunity to penetrate through the core base of the company, as can be seen from Ultra Right, Coor and Yueling.

Enough of chit chat. How are the markets doing? My last update on the 3 indices that I trade on was Let's do some wave count... on 2nd April 2023. Based on wave count at the time, the general directions were up, although I was skeptical with hang Seng and cautious on Nikkei.

Fig 1. Dow Jones weekly chart

While Dow Jones was on the up-trend until its pause this week, its momentum was not really strong. Furthermore, it seems to be stopping at the trendline based on the last 2 peak. On a positive note, it broke through a longer trendline, retested the resistance turned support of this line and bounced further up. 

One issue I am concern about here is that while Dow Jones is on an upward movement, it did not manage to convince the Bollinger envelop, which went flat. Close monitoring of this counter needed especially when it retest the trendline as well as the Bollinger band envelop.

Using Fibonacci projection, it is possible to determine 2 levels of resistances between 35,308 to 37,774.  

Fig 2. Nikkei weekly chart

Yes, all arrows pointing up for Nikkei base on Fibonacci measurement at least. 

However, it is also worth noting that Nikkei is within a congestion zone, and its present trend is of C wave, in my opinion. furthermore, this is likely to be in a major B wave after a major A formed between December 2021 to June 2022.

If this is true, The peak of the major B wave should not be higher than its peak in May 2021. I am seeing resistance between 29,594 to 30,346. However, it is crucial that it overcome its present position, which coincidentally are where both 61.8% projections are located.

Fig 3. Hang Seng weekly chart

Hang Seng is facing resistance, this come from the 55-week moving average that I find highly influential. It has difficulties penetrating this resistance level. The counter has been testing and retesting the last few weeks and the bars in the last 2 weeks even turned red. I suspect that it is going to head downward, but the signal is not yet definite.

A more definite read so far is an uptrend (in blue). Unless Hang Seng come down breaking with a new low, I will have to assume the trend is up. If this trend become certain, it will face resistance at 23,847.

If it breaks with a new low, the support level is between 17,061 to 18,512.

The psychological problem of the US of A.

Many things are happening on world stage today, the on going Ukraine-Russia war, growing China influences, the strengthening of BRICS. Certainly, as the greatest country in the world, US of A certainly want to make sure their country remains strong against potential threats.

What should America focus on to maintain their world dominance? Strong military presence? Strong market economy? making sure the rule of law and spotless politics?

Nope, none of these matters. What is more important is inclusivity by being exclusive. The policy makers demand fair representation ensuring strong presence of minorities within the society, that organizations need existence of minorities or they may be penalized, or worse, condemned and cancelled.

The result? companies and organizations hiring people because of who they are, and not what they are good at do, in the long run, it leads to deterioration simply because those handling the jobs are not be the best qualified.

By the way, you might think that by minority, I mean race. Nope, it is beyond race. It is LGBTQ....... ( it is now so long that I stop remembering what other alphabets are there. At this stage, it is your sexual preference that counts. 

 The result of such inclusivity leads to 2% of the population to dictate the mindset of the majority. Drag queens are now allowed to perform in primary and secondary schools, pornography also gained access to school library, an increased in numbers of adolescents and children are diagnosed with sexual identity issue and recommended to transition, and if parents disagree, they are deemed abusing their children.

What of the companies? surely, they are profit focused and should be exempted from such influences? Nope, they are now seen glorifying trans people, and Dylan blurring the lines between men and women. Yes, if any man claim that he is a woman, society should disregard the common sense and accept of his identity simply he said so.

We are now seeing Nike sponsored a transperson to promote their brand of sports bra and leggings. I really wonder the marketing logic behind such move. It only label their product as that suitable for trans people and not women.

 Lego is another company that jumped onto the LGBTQ...band wagon. They released a range of Lego products for kids to educate them on such sexuality tendencies. Do children really need to be exposed to such sexual acts? 

One beer company Anheiser-Busch decided to engage the same trans person Dylan Mulvaney who promoted for Nike to be the spoke person of their beer Bud Light. the Marketing VP of the organization claimed that the brand was on a continuous decline, it needed to change its Frat boy image towards a more inclusive audience. 

The result of the marketing gimmick was a disaster causing all its existing customers to stop buying the beer. By trying to be more inclusive, it excluded all its existing customers. There are even strong rejection of some of its diehard fans condemning the beer.

However, the question here is: How does the marketing gimmick causes such drop in sales? 

To answer this, we have to know the demography of this brand, which is primarily males. The message sent on the other hand, told its customer base that this beer is for Trans and if you drink this brand of beer, you are a trans, and men in general do not want to be labelled as trans, no matter how much they claim to support inclusivity and transgenderism. their agreement to such moves is simply not to be ostracized.

The thing with marketing strategy is that you need to expand your market coverage, and not ditch your major consumer base for a new market sector, which Anheiser-Busch just did. The VP of Marketing really need to resign or be fired for this.

The share price of Anheiser-Busch was at a peak of 66.99 before the backlash, it dropped to a low of 63.38 before recovering to 64.56 by the end of this week. Some commentators claimed that its capital lost about 7Bil at its worst and the loss is threatening the company.

I find this inaccurate because the company is not really affected directly. It has already collected the funds at the time they issued the stocks. Those affected are the ones who bought the shares that this company issued, especially the ones who bought the share at 66.99. If you have bought the share at the price of 58.26, you simply have a reduced gain.

The lowest that this counter went was 44.90, so even those who were issued stock options a  year ago would not have negative gain, they just have a reduced gain.

What concerns this company is the loss from sales and those who hold the stock for dividend. This will be the only reason for the management to rectify this problem. If the customers want to teach the market a lesson, stop buying the beer.

Anyway, I am more interested in the chart. Some question I want some answer is whether what the VP of marketing said is true, that bud Light of the company is in trouble to start with?

Fig 1. Anheiser-Busch weekly chart

The chart above goes as far as 2010. It is clear here that the company has been on a decline after its peak of 136.08 in 2016, it has consistently been resisted by the downward trendline until November 2022.

It is possible that Anheiser is on a counter B wave at this point of time because I am seeing an 3 wave 'A' followed by a 'B' and now completing a 'C' wave.

At the same time it is possible that Anheiser is forming a bottom.

Fig 2. Anheiser-Busch weekly chart close up

Having a closer look, it can be seen that a Doji formation this week after it retraced from its outbreak from the Bollinger envelop, this after a huge surge in volume traded. 

It does not indicate the fear in the market. Instead, traders are uncertain over the incident and they are waiting for the event to further unfold. Is the management going to do the right thing? Are the customers willing to forgive the brand?

Technically, it is supported by the moving averages, it bounced off the 8-week moving average in this week's fluctuation.

I am also seeing higher possibility of uptrend with 2 objectives, one reaching around 75 while the other hitting a potential of above 90.

Currencies April 2023 update

Time passes very quickly, it seemed that we just celebrated new year, then Chinese New Year, the passing of my father and now we are into the second quarter of the year. May be I am getting much older now?

anyway, I have recently rekindled an old hobby of mine, I am now back into comic drawing. Drawing has been an important part of my life since I got to know the world. My first drawings were on the wall in my grandmother's room, a fish, or part of it. 

My uncles were in school at the time, and they were studying Biology, I managed a glance of the human organs in particular the digestive system. I drew a fish with the human digestive system as a result.

It was through years of work life that I started to lose my ability in drawing, the longer I was in the work force, the less imagination I have. So much so that I held a pencil in mt hand, a piece of paper in front of me, and it went blank for hours.

My flame in drawing grew recently when I found interest in perfecting my sketches of the female anatomy. Yes, I love drawing female, why? I remember one artist said when he was asked the question," because I love women."

anyway, at this point of time, it is not about women, or my sketches. Let's check on the sketchings of the charts.

I have recently heard from a youtuber that the US politicians were focusing on the wrong thing such as woke culture and "inclusivity" when the true problem is the decline of the USD.

The USD decline was mentioned often. However, It is recently facing more threat than before, with news that the Saudi and China going to trade oil using CNY, and that China's influence growing stronger to the extend that it initiated a peace talk between Saudi and Iran. Further more, an increasing number of countries are joining BRICS, a coalition to counter the strength of USD.

 I did an up-date on USD in April 2023 titled Currencies March 2023 update, While there were signs of upward reversal, I was uncertain on a few pairings. A month has past now, how is the USD doing right now?

Fig 1. SGD weekly chart

SGD did not go into correction. 

At this point of time, it failed to break through the 21-week moving average. Moreover, the point which it reversed coincided with the 61.8% projection level support of a major move. I figure that it will head towards its next level of support (100% projection). 

While hesitating at this moment, it nevertheless resisted by the 8-week moving average, it is indicative that USD will slide lower against SGD. 

During its last low, the counter did not touch its 100% projection support before its debounce, I suspect it will not stop at 100% mark and move further towards its 127% projection support at 1.26.

The correction upward has also generated another projection measurement. Its 61.8% projection support coincidentally is near the 127% projection level at 1.2679.

Fig 2. JPY weekly chart

Similar to SGD, JPY has also fell of after its correction upward. It is presently supported by its 55-week moving average. However, it also seems to lack inertia to reverse upward, giving me a feeling that it is congesting for a flag formation. 

It is however, floating above the 55-week moving average, which coincidentally at its 38.2% retracement support.

I am still uncertain of its trend at the moment. So I head back to a bigger picture.

As long as there is no violation of its formation, I will still consider its trend to head downward with support at between 113.220 to 122.59. If it is heading up, it will face its Bollinger resistance at 140.28

Fig 3. EURUSD weekly chart

I am using the chart on my trading platform as it has more Fibonacci tools than finance.yahoo.com. However, it only provides EURUSD pair and not the other way round.

EURUSD is presently retesting its previous high, coincidentally meeting the 144-week moving average resistance. It has not yet violated the old high.

For the time being, the formation gives me 2 possibilities: Support of between 0.8224 to 0.9308; Resistance of between 1.1436 to 1.2022.

Fig 4. GBPUSD weekly chart

Unlike EURUSD, GBPUSD chart looks rougher, probably because of BREXT and its present political turmoil. Of the 2, GBP seems weaker than EUR.

The general trend of GBP is down against USD, even with the recent up-surge, the present measurement unable to see it breach the previous high of 1.4242, with resistance between 1.3104 to 1.3903.

On the downside, there are 2 sets of measurements, a more recent one with up to 127% projection support of 1.04967, which has been tested before reversing up. The other with support between 1.190 (which has been crossed) and 0.9223. 

Some time it is sad to see such powerful nation goes into deterioration simply because self centered politicians who are good in speech yet incompetence in running the country. They ride on the band wagon of woke culture not because they believe in its cause, but it guarantees their own political survival. 

Going through world history, it is not difficult to see that an empire is reaching its death bed when the focus of the government is not focusing on the big issue to bring the country to the next level, but to focus on insignificant issues that do not even affect the country progress in any way. 

When the west is focus on avoiding hurting feelings of a certain people, they will lock themselves in a shell and shrink while other grow. 

Let's do some wave count...

 I have not been doing wave counts for quite a while. One reason is because there is more subjectivity in counting wave using Elliot principle. Fibonacci prediction on the other hand is more accurate.

However, the 2 actually goes hand in hand. Merging the 2, I get to realize how Technical analysis (continuation and reversal patterns) measurements are derived.

Fig 1. DJIA weekly chart

When I mention subjectivity, DJIA exhibit some form of such behavior on its up-trend. There is no clear behavior of counter wave and the "counter waves" of the 5th wave overlapped each other. As such it created uncertainty in the reads.

The counter waves while overlapping on its own counter waves, its B wave is not very clear. I am still certain that THIS IS a counter wave. 

The counter wave was supported by its 38.1% retracement line. 

Using the main and counter trend pattern, there are few resistance level to watch out for: 35,376;37,835 and 40,180.

It is also worth noting that the level of choppiness increased after 2018. This is a possible indication of a top formation.

Fig 2. Nikkei weekly chart

Technically, Nikkei is on side-trend at the moment after its last surge during the pandemic.

However, the up-trend wave count is much clearer than Dow Jones, including 5th wave which superseded the peak of 3rd wave.

The counterwave downward is also interesting. The A wave contained 3 sub-waves with wave c of A, falling short of a 5-wave c of A.

While it was possible that B wave was completed, its recent surge above the peak of November 2022 indicating possibility of moving higher.

There are 2 resistance visible here. Amore certain resistance level is 30,092 based on wave B measurement. 

The other is a sub-wave measurement which I find a little skeptical since the up-trend with lesser gradient to its counter trend. Never the less, we will see resistance between 28,348 to 29534.

Fig 3. Hang Seng weekly chart

From my perspective using wave count, Hang Seng seems to have completed its counter trend downward and it is presently on a new trend.

It has reached its 100% projection target, more over crossed 127% projection level before reversing up.

It is possible that Hang Seng has reversed upward from its counter trend 2 weeks ago with support from 31.8% retracement, a surged up last week only to be resisted by its 55-week moving average.

The concern here is this: Hang Send has closed below its 55-week moving average.

If it continues to project upward, I see resistance at 23,870. Otherwise, a support level of between 16,382 to 17,737 will apply.