So Biden and Xi finally met at San Francisco...

 I practically did not trade this week. Not because I am lazy or procrastinate. I had a lot errant to run. 

On top of being the chauffer for my family, mother-in-law (for her clinical visits), and sending my car for service leading to a repair cost of SGD3,181, an "accident" happened on Monday evening with a forward parked car reversing out knocking onto the door of my car from the driver side. Even though it is the fault of the other car and that there was no damage noted from my car, while the rear view mirror of the other car was slightly tilted forward (with no damage neither). I had to make my way to the accident reporting center in case the other side decided to pull a fast one on me.

That cost my whole week.

Anyway, enough of my rant. Back to charting.

What happened recently? Oh yes. Xi met with Biden in San Fransico, USA on November 15th 2023. Was the meeting fruitful? I doubt so, especially when 2 of the worst performing world leaders meet.

What meaningful conclusion can be derived when neither can have consensus with the other?

One thing I suspect is China's ... or Xi's leadership is in jeopardy and the economy of his country continues to weaken. Xi must be very desperate to leaving his country risking potential coup from his party members. 

While the Chinese Communist Party maintained an appearance that everything is fine in China, it is not from ground level, otherwise Hang Seng will not be at where it is today.

How is China faring from technical analysis point of view?

For this entry, I will look at CNY and SSEC.

Fig 1. CNY weekly chart

My last check on CNY was surprisingly quite recent in CNY- an indication of health for China's economy dated 10th September 2023. 

I was of impression that CNy will continue to weaken against USD considering the trend of the chart. I estimated short term resistance at between 7.37439 to 7.54820 while a long term resistance at between 7.7293 to 8.0086.

While CNY broke the previous high with a new peak of 7.3510. Iit was stopped by the Bolinger envelop before reversing downward, falling short of my resistance estimation.

Is CNY reversing? It seems so, at least from MACD indication, that demonstrated multiple divergences. 

By the end of this week, it fell further, only to be stopped by my trusty 55-week moving average. The downward momentum, however, seems strong. I suspect it may pause at this level momentarily before heading further south.

For the moment, there at least 2 more support that I will need to take note on. The 89-week moving average at 7.0926, coinciding with a high on March 5th, 2023 at 6.9762. This will follow byu the 144-week moving average support presently at 6.9045.  

My rationale for this trend is not that CNY is getting stronger, but the weakening of the USD, as observed from my analysis published in Did SGD get weaker? dated November 19 2023. So may be it is not conclusive with CNY analysis alone. 

Let's look into the SSEC, short for Shanghai Stock Exchange Composite index.

Fig 2. SSEC weekly chart

My last check on SSEC was, surprise, surprise! done in August 7th, 2022 titled After thought of HKD and China indices. I cannot believe that it was so long ago!

At the time, I estimated SSEC with a down trend, estimating short term support levels to be between 2,579 to 2,901 while long term support between 993 to 2,038.

SSEC reached a low of 2,863 before reversing up. This is within my short-term support range. It did not go far, failing to reach its previous high of 3,708, stopped by a concentration oof moving averages, twice.

As far as I am concern, China economy is stagnated. I remember an entry I have made on China titled Is this the end of the China miracle? in January 26th, 2016. That was my first entry after I restarted my blogging project. 

In that entry, I noted the fall of SSEC from its second peak and estimated support at around 1,700, and with possibility of falling further.

It went to a low of 2,440 in 2018 before bouncing back up. 

While it has achieved higher highs and lows since then, they overlap each other, indicating a pattern for counter wave congestion. This means that it will likely continue downward once its 3-wave pattern has completed.

In addition, its development since then as created a potential head and shoulder, giving more indication of its intended direction.

Based on its major move, the long-term support level is estimated to be between 1,002 to 2,044. The short-term support level on the other hand lies between2,564 to 2,892. 

What about the head and shoulder, using Fibonacci expansion, the objective is estimated to be 2,003. This however, requires SSEC to breach its neck line, it might lead to a higher target which coincide with the long term 61.8% projection of 2,044.

There is still a possibility of SSEC heading the other way, should SSEC break the congestion band upward, this is less likely presently. It may reach an objective of around 4,000.

Did SGD get weaker?

 I did a piece on Malaysia titled On the road to radicalization under the leadership of Anwar Ibrahim on 28th October 2023. I was negative on its overwhelming support for Hamas as I feel that the direction it took is not conducive to the progress of the country. It is an act of the prime minister to redirect the people away from the governance incompetence of his government.

MYR indeed weakened on the week that followed, but also created a potential reversal signal. MYR further strengthened against both SGD and USD the subsequent week. I was anxious with the new development. Was I wrong in my analysis?

My first reaction was to change my position, after all, it did seem like a trend reversal. 

However, there is something in me telling me to hold off my decision, patience!

First off, the changes seem impulsive, and market may be reacting too some surprises. What I found an article on USD titled US Dollar Drops Sharply As Weak Data Puts Recession Fears In Focus. 

It probably spooked the market and lead to a plunge in USD. On the other hand, it made MYR seemingly strengthen against USD. However, it did not explain why it also strengthened against SGD. 

In the end, there are many things on the world that I cannot explain, and it worthwhile not to pursue this route. Further more, it may lead to a subjective misread on my charts. 

So another week has past and I  felt may be there is enough bars to see if SGD has indeed weakened against MYR.

Fig 1. SGDMYR weekly chart

SGDMYR actually broke through the previous high of 3.4938 before it retreated from the new high of 3.5166. It fell to 3.4164 before closing above the 21-week moving average. The downtrend is relatively weak with such a long tail. 

Further to that, the bodies of the bars overlapped during this down trend. it is a kind of indication that there is hesitation in its move and SGDMYR is possibly in a correction phase. 

A harami is formed with this week's movement closing above the 8-week moving average. Dow it mean that it is reversing again? It is a possibility, but there is a need for confirmation bar.

It is still possible for SGDMYR for further downslide, with the urge for the chart to touch its 55-week moving averge and the 100% projection support level of 3.37.  

What is the upside? 

If we are seeing continuation at the point of time, we should still be seeing 3.6225 after retesting 3.5176.

However, it is only a comparison between SGD and MYR. What about SGD itself?

Fig 2. SGD weekly chart

In my last update on SGD in Oil creeping up? I estimated strengthening of SGD against USD as the pair was touching the 55-week moving average. It did not.

Instead, USD strengthened further against SGD peaking at 1.3763. Coincidentally, this is the 100% projection resistance of its minor move. 

It did reverse down there after.

The weakness in the US market brought USD back below the moving averages, which also support further down trend. In addition, the MACD has also crossed downward, further supporting the notion of further downslide.

While the bars also overlapping which for me is indication of counterwave, it seems there is stronger momentum to go further south. 

However, there are a few support levels that is crucial for this trend.

First off, the previous low of 3.1723.  Crossing this level will give a clearer indication of its direction. Below it is 1.30320, which is the low of 29th January 2023, reversal of the previous down trend.

The other levels will be the major projection support between 1.228862 to 1.285007. 

Fig 3. Crude Oil Light weekly chart

With stronger SGD against USD, one other chart that I will look into is crude oil, which was the original intention of this entry. I noticed recently that the petrol price came down while I was pumping fuel to my car, it is worthwhile checking up on.

In my last analysis Oil creeping up?, Crude oil was congesting. I placed 2 scenarios over where it may be going. On the upside, I have placed the range of 92.34 to 94.746 as its resistance. 

Oil peaked at 95.03 before reversing.

It has since broken through the moving averages this week below the 144-week moving average of 77.78, closing at 75.84.

I suspect that Crude oil may retest its moving averages not limiting to that of 144, 89 and 55 before continuation.

From Fibonacci standpoint, the next level of support is its 61.8% projection support at 53.71. However, another support level worth noting is the previous low of 63.64, which may cause crude oil to reverse. 

If oil manage to break through these levels, then the 100% projection support at 28.17 is a possibility. 

Now it is a little too far fetch, isn't it? How can oil hit this low in midst of such world turbulence? There are already wars on 2 fronts and threat of more happening in the East. Should China not able to handle its internal issue, it will externalize its problem by attacking Taiwan. By then USA will be spread too thin to battle on 3 fronts. These are potential for inflation so how is it possible for oil to go down?

Well, oil has gone negative before, bottomed at -40.32, so 28.17 will still be a possibility.

If, however, Crude oil can hold fast at its 61.8% projection support, we may then witness a surge upward with target of between 169.21 to 234.46. As a consumer, I don't find this appealing.

Is Dow Jones reversing as well?

My last update on Dow Jones was on Dow Jones, Nikkei and Hang Seng Up-date 1st Oct 2023 which I was negative on the trend of the Dow Jones. I suspect Dow was in process of top formation. 

The momentum of the uptrend between July 2022 to July 2023 was gradual and that it demonstrated pattern of a 3-wave formation. In addition, there are various divergence such as MACD as well as failure of Dow Jones superseding the previous top.

However, Dow Jones rebounded strongly this week just like Nikkei. I am positive on Nikkei as the continuation was long anticipated, Am I with the same feeling with Dow?

Fig 1. Dow Jones weekly chart

Since my last update, Dow reversed from its 61.8% projection, broken through 55-week moving average only to stopped at 144-week moving average. It is presently retesting the 55-week moving average.

In addition, the counter wave between the 2 July also developed a wedge formation and outbreak by week of 17th September.. This is further signs that Dow Jones is on a down trend.

It is however possible for Dow to move momentarily upward to retest 61.8% projection as well as the wedge envelop with resistance now at 35,317. 

However, the general trend I believe is still downward with support at betwen 27,254 to 30,492.

Another level to observe is 28,586, which is the previous low of Dow Jones on 2nd October 2022. should this level be violated, the formation of a double top will be completed. it is only worth noting as a possibility as the pattern is yet to complete.

It is possible that Dow Jones will retreat after  

Nikkei moved!

My last update on Nikkei was on Dow Jones, Nikkei and Hang Seng Up-date 1st Oct 2023. I maintained at the time that Nikkei was in a counter wave with a possible support at 55-week moving average.

This week, the low of Nikkei is at 30,388 while 55-week moving average was 30,359. It did not really touch but they were close. At the same time, I also mentioned of another support level of 30,868. This is the 100% projection support of the counter wave.

The upthrust this week is decisive crossing the previous high of 32,660 reaching a height of 32,827 closing at 32,747.

Are we seeing a continuation that I have been expecting?

Fig 1. Nikkei weekly chart

Considering a steep slope heading north while a gentle one downward, I was anticipating a continuation after a 3-wave correction. 

However, it seems that the upthrust this week is stopped by at minor 100% projection resistance created by a pull back after a seemingly reversal bar. I suspect that it may lead to a short correction ( 1 to 2 bars) before continuation. 

The next level of resistance will be 33,425. 

Why I think so?

This level coincides the 127% projection with the present level of Bollinger band.

Thereafter, Nikkei will challenge the resistance zone between 35,532 to 39,156, the later would be the 100% projection level of a major move. The objective will not be achieved in the near future though, it is a major move and there may still be lots of factors influencing its climb. 

Let us continue to monitor its progress.