Now that the election is over, how it's going?

 

In my entry 2 weeks ago titled US election is right around the corner..., I maintained a bearish opinion on Dow Jones while indicating the possibility of bullish surge after the election, which is a common phenomenon, I mentioned of a resistance at 44,932, Dow reached a high of 44,163 on the week of election and 44,496 this week before retreating. 

I have also mentioned in my entry that US is in a phase of distribution based on technical analysis concept. Trump's win may be able to reverse the status quo. It really depends on the will power the people to look forward instead of demanding equality of result. 

Road ahead for Trump's team is hard. At least for the time being, they are heading in the right direction, which is to tackle the deficit. Introduction of DOGE will help in reduction of overhead in the government to improve efficiency leading to cost saving. However, this indirectly means that Trump's team will be implementing austerity measure, which great for the long run, it is hard for the people in the short run. But again, will power. 

Trump does not have much time, because the measures that his team going to introduce is not going to be pleasing to the people. These will be hard measures requiring the team to bulldoze through. They in fact only have 2 years to achieve their goals instead of 4 years. Because if it is not properly managed, people will turn on them faster than they do on Biden and Kamala.

So where might Dow be heading next?

Fig 1. Dow Jones weekly chart

The bar formation these 2 weeks did not create any reversal candlestick formation. I do not see a reversal and it may be more of correction or congestion the coming week, with support likely to be between 39,456 to 42,740.

Having said that, while Dow Jones reached a higher high, its MACD did not. This leads to potential divergence indicating weakness in the Dow's climb.

Furthermore, the gradient of its latest ascension is more gradual as compared to that from the previous one. It is actually slowing down.

We may still see Dow hitting higher, though. It is in between supports and resistance levels as far as I can see. Its most immediate resistance is the 100% of its short run projection at 44,968. Crossing this will be its long run 100% projection resistance at 47,371. I believe the later will be a more likely possibility for reversal because it also coincides with the intermediate 127% projection.

Dark cloud covers Hang Seng

The US election was over and the market reacted. Well, at least the US market did so with euphoria. Dow Jones surged to 44,163, close to the level that I estimated of 44,932 last week in US election is right around the corner.... It will be interesting to see how the US market develop after the euphoria is over.

For the time being let's check on Hang Seng index because it is definitely not doing too well. In my last update Hang Seng is climbing..., I hacve indicated that Hang Seng is climbing with resistances of up to 22,868. Hang Seng reached 23,257 before it retreated. Since then, while declining, the weekly move was much more mellow.

So, is Hang Seng going back up soon or there is more down slide coming?

Fig 1. Hang Seng weekly chart

Indeed, based on the multiple setups resulted from Hang Seng, it certainly seems bullish. The issue here is that there are multiple projection resistances between a narrow range of 22,737 to 22,918. This I believe is the primary cause of its reversal on week of 6th October 2024. It opened higher, climbed up a little but came all the way back down recovering more than 50% of the previous week's gain. 

This in fact forming dark cloud covers for Hang Seng, indicating a negative reversal. 

Hang Seng is coming down.

Where are the support?

My Favorite is the 55-week moving average of 18,439. In addition, there is a a support zone between17,978 to 19,263.

The problem is that the moving averages alignment maintain a downward signal. I have got a feeling that Hang Seng's decline may not end here.

Meanwhile, Hang Seng managed to hit higher high, while there is yet divergence from MACD. 

We may still be seeing a correction or a complex B wave for Hang Seng.

Should Hang Seng be supported by its 8-week moving average at this point of time, we may see it climbing higher to between 27,585 to 30581, which is the double bottom objective of Hang Seng.

For the time being, my estimation will be a continuation to 55-week moving average before revering upward. The 8-week moving average will be an important determinant for Hang Seng's decision.

US election is right around the corner...

I believe that it was XBox that released the Age Of Empire Mobile game this week. I remember that the first time I played the Age Of Empire was around 1996-98. That was the first version which I think closely resembles another game Civilization.

So I thought," why not give it a try, for old time sake."

Boy, have I made a BIG MISTAKE?

While there are some nostalgia of the original Age Of Empire, it is more like another game that I played for years which I eventually gave up, State Of Survivor(SOS). However, this game is more complex and there are a lot of different aspect that requires attention.

While playing the game, I noticed many players from my region stopped playing the game, most of them did not even reach level 10. Most players played with the mindset of playing game like SOS. But this is different with additional feature of land grab, planting flag poles.

What I saw in most alliances (that is what they called in the game) having members cluster in big group, while a large mass of land is taken up, unguarded. while there are re-location tools, it is very expensive and not worth using.Therefore members(or allies was the6y were called) have difficulties re-locating to support land from threat.

Further more, many of them just went on doing their own stuff while not contributing to the alliances, making progress difficult.

The complexity in managing the citadel itself is not helping neither, I myself spent much time going round the screen checking different aspects before I can focus on developing my citadel.

The result I saw was around 80% of the players gave up on the game. Even I am contemplating leaving the game as the territory is dying.

My understanding is that this game started by Microsoft, my feel is that it will not make it since within a week's of its launch and I am already contemplating giving up.

Anyway, that waws my rant for this game, let's go back to the real game.

I mentioned last week that I will include an entry on Dow Jones this week, and as promised, here it is.

My last update on Dow Jones It is tumbling down, but it is not yet for Dow Jones, I was adament at the time that Dow Jones was not ready to go down. Since then it climbed higher. So This time is it ready to come down?

Fig 1.DJIA weekly chart

I mentioned in my last week's entry that it was too early to tell since it was only a long bar down. Well, it is not that easy this week neither. A doji is created, indicating uncertainty. So what the chart tell me other than this uncertainty?

First and foremost, MACD crossed downward and not surpassing previous high, this is an indication of divergence, even though it is a weak on.

I believe it will be a correction instead of a reversal. Further indication needed for confirmation.

What else can I see?

The descent of Dow Jone is supported by its 8-week moving average and the 61.8% resistance turned support of its most recent projection, but it closed below the moving average. There is a chance that it may remain congest in the coming week, but the general direction will be trending downward. 

The support I see may be between 39,134 (55-week moving average) to 40,206 (61.8% resistance turned support of its major projection.

The point is that there is a chance at this point that Dow Jones will bounce upward in the coming week, then the resistance I see will be 44,932.

The coming week is when the major event of US election is, it does not matter who wins the election, should the market not rally with good news in either way?

The important thing is that market is all about anticipation. People anticipating the revelation of this good news, and will start selling off once the event is over.

Will it climb with the result? Possible, with maximum period of round 2 week before it starts to head down. After all, Dow Jones really need a correction.

Speaking of the situation of US, I have a thought here based on the market concept of accumulation and distribution.

Is US presently at accumulation or distribution?

I believe that it is presently in process of distribution, why?

Notice the works of BLM? Reparation? LGBTQ*? The demand for privileges is an indication of distribution because everyone is yell," I deserve more!" This will lead to break up of a country.

What is accumulation then? It is when everyone chip in effort for a cause, it results in building up a nation.

In my opinion, US is badly in need to self-reflection, what the Democrats has introduced is very damaging to the country and the process needs to be reversed.

Unfortunately, many voters focus on the wrong thing, believing in the redirection from Democrats. Let's cross fingers that Trump can win back the country.

Dow may be correcting, but let's look at FTSE and DAX first...

It is less than 2 weeks before the great US election, I believe Dow Jones has begun to react pending election result. For the first time after 6 weeks, the bar this week turns red, and it is LOOONG. It closed at 40,092, slightly below its 8-week moving average of 40,119. 

Is it early sign of reversal? 

I will probably leave it for next week's up-date.

MEan while, it has been a while since I give an update on the 2 European indices: FTSE for UK and DAX for Germany.

My last up-date on these 2 counters was Re-visiting DAX and FTSE dated July 23rd 2023. Gosh! has it been THAT long?

SAt the time, I anticipated a correction for DAX to its 55-week moving average before continuation upward. While I did not place an objective for DAX due to its pending correction, its projection measurement for DAX were all upward. 

I also noted strong resistances for FTSE even though it will trend higher with an estimate objective of 7,961. 

So what happened to these 2 counters since then?

Fig 1. DAX weekly chart

DAX's correction went beyond the 55-week moving average. It was stopped only by 144-week moving average before it continued its climb, which met with another correction, this time supported by its 55-week moving average.

These corrections create opportunity for projection measurement. It has past its first 100% projection at 19,236 but stopped by another 61.8% projection. I suspect that this is a minor congestion with support at its 100% projection of 19,236, as well as its 8-week moving average. The next resistance level is its 127% projection at 20,523.

It is also close to reaching the 100% resistance level of its major projection at 20,078. crossing this will allow it to head for its 127% projection level of 22,272. 

There is some concern though, while climbing higher, its bars are short and over lapping. this is a sign of weakness for me. With 3 lines of resistance very close to each other right ahead, I suspect it may be on another round of correction before heading higher.

Why am I still bullish on DAX?

I am not seeing divergence yet, especially on MACD. With this new peak, and MACD is much lower than before, I believe that this is the first diverging sign.

Fig 2. FTSE weekly chart

FTSE went further than my expected objective reaching a high of 8,478 before it begins to correcting, at one point falling to a low of 7,913, which was supported by its 55-week moving average. 

While the formation of a hammer candlestick giving indication of reversal of its correction, it is resisted by its Bollinger envelop. I believe its correction is not over and may re-visit its 55-week moving average before heading higher, if that is the eventual direction.

So far, all the projection measurements maintin a continuation upward,with its closest resistance between 8,556 to 8,694. Crossing this level, it will meet a tougher resistance at 8.903.

However, before going higher, it must first go lower with support between 8,029 to 8,073.

So far there is yet sign of divergence on MACD, so I believe that any downward trend is still a correction and not yet reversal.

Is Japan on continuation upward?

I was going through all my entries contemplating what I shall explore this week. 

I first looked at Dow Jones and noted that it is on its way up with potential objective of between 45,000 to 47,000. I guess that it may not be the right time to conduct a study on this counter. It was only September that I have made an entry on this. I believe that with Dow will continue to climb until the completion of the US election, which reversal will appear, after all, the trading market is always about anticipation.

What shall I research on then?

It was about 2 months ago that I made an entry on Japan situation through The curious case of JPY-Nikkei divergence on 4th August 2024. I guess it is about time that I check on this counter, then.

Fig 1. JPY weekly chart

In my last entry, I estimated the possibility of correction before further downslide (JPY strengthen against USD). Unfortunately, JPY refused to wait and in continuation without correction. While it managed to reach new low, there was a lack of momentum and reversed upward after re-bounced from its 144-week moving average support.

The question here is: Is this a correction or trend reversal?

Based on the chart, there are a lot of indications of an uptrend (check out the arrows). The issue here is that the uptrend started by the end of 2023 has a reduced level of momentum. The reversal by June 2024 witnessed a steep decline before it reached its 144-weeek moving average support.

What's more, there is a divergence on MACD, providing more justification of down trend (JPY strengthening against USD). 

I still believe that JPY is on a correction phase with resistance at 153, its 61.8% retracement and projection. It may reverse and continue downward thereafter.

On continuation downward, it is crucial to note the support at 139.58. This is the previous low which turn the neckline. Should JPY cross this level, we should see support at 125.73 with its objective at117.226.

Fig 2. Nikkei weekly chart

In my last entry, I noted Nikkei to continue its down trend with minimum objective of 32,039, considering a double top formation, with additional support from its 144-week moving average at 32,217.

The momentum of its down trend was so strong that Nikkei plunged below my estimated levels, reaching a low of 30,632. This followed by a strong recovery with a hammer candlestick indicating a reversal upward. 

While there was divergence on MACD prior to its fall, I think its predicted move might have been fulfilled. It has been climbing up since then only to congest at its 61.8% projection. I believe that it will continue upward upon breaking through this congestive level. 

There will be a few resistances ahead though. the first resistance zone between 40,970 to 41,620. The next resistance level after crossing this will be between 42,843 to 43,301. This zone will be stronger as there is a total of 3 projection resistances in this zone.

SSEC reversing SO SOON?

It was 2 weeks ago that I have an entry for SSEC in Is China doing badly? I was adamant that SEC was actually heading upward with resistances between 3,174 and 3,225.  

Even though there are additional levels on my charts indicating resistances between 3,370 to 33,555, I have not included them as I did not anticipate a strong move to reach these levels.

There was another concern, the long term moving averages of 55, 89 and 144-week moving averages were still intact, meaning the possibility that there may be a little more downturn before going higher.

While gapping up the week after my entry, crossing the resistance levels that I estimated, it's climb was milder. 

I went back to KL over the weekend, which normally led to a pause in my entries. This time round, additional alteration of family matter led to my urgent departure back to Singapore. A complete disruption of my weekend.

Meanwhile, I started receiving videos about people getting burnt due to abrupt reversal. "Are they over-reacting?" I thought. Afterall, I just looked at SSEC because of similar claim and it turned out to be false 2 weeks ago.

So I took a look at this counter again this week.

Fig 1. SSEC weekly chart

The week opened with a huge gap up, even violating my 100% and 127% projection, went above the 161.8% projection. Not only that it went much beyond the Bollinger envelop resistance.

The move this week also crossed the previous high, justifying a double bottom formation with objective of 3,711, which it was close to reaching.

Unfortunately, the surge was too strong leading to an equally strong pull back, with SSEC eventually closing within the band and coincidentally, its 100% projection. 

The movement also created a candlestick formation called Dark Cloud Cover uniquely for uptrend. This is a reversal pattern mark the beginning of a down trend. The 2-bar formation makes an equivalent shooting star.

So is SSEC reversing down?

If based on the candlestick formation, there is no need for confirmation of reversal. Furthermore, the momentum of its downward movement this week is strong, leading to the possibility that it would be on a down trend from now on.

The problem is that there was a gap up prior to the incident, and the move this week failed to cover the gap. 

In addition, it hung onto the Bollinger envelop after this forced reversal.

It gives me the feeling that while it may be heading down further in the coming week, there may be limited downside. Afterall, the 55-week moving average support is close by at 3,016. 

There is another scenario though, if SSEC inch back higher with candlesticks of small bodies, it will be indication to me that there is a continuation downward that may eventually surpass the 55-week moving average support level.

Is China doing badly?

 I have been receiving more videos about how badly China is performing at this stage of time. Massive unemployment, closure after closure for factories and eatery outlets and people sleeping on the streets while airports are empty.

It makes me wonder: Is China getting worse? 

It really took a long time for China to reach the level of Asean at the cost of its Neighbours. It was also very scheming to trap countries to go in debt through its One Belt One Road project.

I was very negative on China market for a long while. My last update on China was So Biden and Xi finally met at San Francisco... on 26th November 2023. It was at the time when I noted a potential reversal on CNY, with ration that it was due to the weakening of USD. SSEC on the other hand would continue to weaken with potential support between 2,564 to 2,892. 

It was Trump who stopped China's ambition to dominate with its parasitic behavior.

Is China really continuing on its decline?

I began my investigation with checking on SSEC index. Unfortunately, something is wrong with https://finance.yahoo.com, it hangs whenever I download SSEC chart. 

Eventually, I managed to obtain a reasonable chart for analysis through a chart from https://uk.investing.com/.

Fig 1. SSEC weekly chart

Since my last read, SSEC went to a low of 2,6535 before reversing up, followed by a continuation downward by 20th May 2024, stopped by its 55-week moving average. 

What's interesting is that the downtrend did not break its previous low of 2,635 and surged upward this week, breaking through most of its moving averages, falling short of its 144-week moving average, and the neckline of its supposing head and shoulder. 

Where shall it go from here? 

With such a strong surge this week, it is possible for a correction in the coming week, falling back to the moving average resistance turned support.

Nevertheless, there is a high potential for it to go further after its correction with its next objective of 3,225. It depends a lot on where it can break the neckline. 3,174 will also be a crucial resistance as this is the previous high.  

Meanwhile, with its close to 5-year head and shoulder setup, there is still a chance of downtrend. Then the support will be between 2,006 to 2,335. For this to happen, 2,692 is crucial.

What about its currency, CNY?

Fig 2. CNY weekly chart 

CNY broke through the 7.0275 neckline of its double top formation this week, giving a potential objective of 6.7045 with support at 6. 8263.In addition, its double top formation also provides another range of support levels. It breached its 61.8% projection support of 7.0723 last week with the next range between 6.8551 to 6.9459.

It is likely CNY will continue to strengthen against USD.

At the same time, it is possible for the move this week to be a false break with CNY correction back to its 55-week moving average presently at 7.1596. The possibility of it continues upward (CNY weaken against USD) for the time being is low.

After thought:

After finishing this entry, I find it not really to my satisfaction. It seems that I have reservation on my view on the situation.

For SSEC, I am bullish with exception of a possibility that it may reverse the coming week, if the reversed bar is longer, then we should expect a continuation downward. 

However, when I looked at the daily chart, I saw 3 consecutive long bars with gap in between surging up. This made me feel that it is bullish at least on daily chart, if reversing down this coming week, I believe it is only a correction, with its 8 and 21-week moving average as the support. While the bars may look long, I should expect short bodies overlapping for the coming weeks.

The entry on CNY is much shorter than I have anticipated, because the pattern formed is relatively straight forward.

Why am I having reservation still?

The pattern is too obvious, this causes me to have some self-doubt that if 90% of the people see the same thing, it will lead to the counter to behave differently.