Dow Jones, Nikkei and Hang Seng Update 6th Aug 2023

I have skipped last week's update. No, I was not lazy, I was depressed after a week's of losing trades. 

My trading was fine even after my return from Malaysia. Then I suddenly have a sense of anxiety while driving home after my morning routines (send my wife to work, my children to school), things been too great, and it is possible that disaster was around the corner. 

For a week since then, something just went wrong with my trades. The worse was that the moment I made a loss on my trade I somehow was compelled to look into 'the next opportunity' to re-enter the market, leading to more bad trades. 

It reached an extent that I have to stop trading and move away from my desk. I have to sit back and conduct a self -reflection of what went wrong. I remembered a time many years ago when I first decided to take up trading. 

My mum was concerned about my financial status, I happened to complete a good trade then (around USD1,000 profit in an hours of work) to gain her confidence, she praised that she misjudged me and that I was indeed capable.

It was after that incident that suddenly my trades just started failing, and it went on for months and I lost most of my capital. I ended up switching to demo trade to figure out the issue with my trades. It still took another year or so to notice that I was compelled to trade, I must be in the market to re-assure people to live up to my reputation.

Did something happen before my relapse this round. I was in Malaysia the week before. My brother voiced his concern if I am really doing fine with my trading. I was doing fine at the time, I smiled and re-assure him I was doing fine.

I suspect that this was actually the catalyst, and the trigger point was the first losing trade of the week. It seems like I have a need to live up to other people's expectations. This is something that I need to overcome.

Anyway, enough of that. This week round, I am going to do an up-date on Dow Jones, Nikkei and Hang Seng. 

Fig 1. Dow Jones weekly chart

I can't believe that my last up-date on Dow Jones was in Dow Jones, Nikkei and Hang Seng up-date 23rd April 2023 in april 2023. while I was not that positive on Dow then, I estimated a resistance between 35,308 to 37,774.  

Dow Jones reached new high last week at 35,687 before retreating back to a low of 35,029 this week, closing at 35,076.

35,308 happen to be the 61.8% more major projection resistance level.

Is it a reversal? 

I suspect not, the bars are overlapping after a long bar up, indicating a possibility of congestion. There are likely more upside.

There are also signs of weaknesses. First off, the gradient of its uptrend is gentle at around 30o, similar to the previous downtrend, I suspect it is a counter wave of counter wave (wave B). 

Why still more up-side?

While reaching new high, its MACD has still yet to break the previous peak, potentially forming a divergence. The bar of the coming week will be quite significant, it will give indication of the trend for Dow Jones.

Fig 2. Nikkei weekly chart

My last up-date on Nikkei was more recent in Nikkei & JPY divergence dated 25th June 2023. 

I was more positive of Nikkei, at the same time ponder its divergence with JPY.

Nikkei retreated from its 61.8% projection resistance earlier. It retested this resistance this week and made further retreat after that.

While congesting, it seems to me that Nikkei is in process of completing a 3-wave pattern, with objective between 30,652 to 31,271.

If broken, then the next level will be 29,363, its 55-week moving average.

Fig 3. Hang Seng weekly chart

My last up-date for Hang Seng was in Hang Seng continuation on 28th May 2023. To be honest, Hang Seng is the counter I am trading most. It has very strong fluctuations and it is possible to make huge losses. 

At the same time, it is also a very good counter for making fast money. I use 3-minute chart and only for around 30 minutes for Hang Seng.

Primarily, I trades Hang Seng because I do not want to lose my sleep trading Dow Jones which means I have to trade at night. I do not want such excitement before I sleep.

Hang Seng is active and with magnitude as compared to Nikkei. 

All the time I was bearish for Hang Seng, noting the formation of reversal pattern. 

I claimed in my last entry that it was on continuation downward. I am puzzled by its behavior lately. It does not seem to indicate that it is on continuation, but within a congestion channel, and lately it is testing the upper envelop, before retreating, mainly due to its 55-week moving average, which is also very close to its short term 100% projection resistance range. 

Is it going up or down? I am uncertain, Hang Seng to me is at a crossroad, especially when it is congesting. I am still leaning more towards the downside, but with possible short up-side before heading downward.