18/05/2012 Market review

Sp future indicates index levels around 1306, 11 points higher than the after hours low.The markets in Europe have been edging lower during the past weeks but sp was holding above 1340 level. This week that support is broken and hence the strong selling in the past few days took the market lower.

Below is the daily sp index chart. The white trend line is broken at the matching point of previous significant high around 1370, and the selling accelerated.To the downside the major supports are 1293-1300 range, and below those is the 200 day Ma around 1278(yellow line).Upside, 1340 is now the first resistance, then 1370, and higher than that is the latest high around 1422.

In the weekly chart below you can see that 20 week MA is broken and 50 week and 80 week Ma's are the next supports ,1282 and 1286 namely.To the upside 20 week Ma is at the moment around 1257.

One thing to mention, gold is around 6 %lower compared to past month so, in real dollar terms sp index is still around the 1 year highs. I believe this shows that the markets are not in a panic mode yet , but the macro economic fundamentals are adjusting themselves to the current conditions.Still if you look at the chart below which is the weekly sp/gold chart, there are few reversal candles in place, but the index has a support of 20 week MA which is very close to current levels.

However, in Europe the story is different.  The policymakers havent responded yet to the markets'  demand for some relief concerning the debt crisis, and Greece is not helping the situation as well. The famous "Sell in May , Go Away!" slogan is definitely putting some pressure on the markets too.

Below is the gold daily chart: There is an assymetrical triangle formation in the daily chart with many of the major mid term support averages broken down. I got some long position around these levels for the long term again. But would not be surprised if the Gold would go further down as will be shown in the next graphs.

Below is the weekly chart of the gold. The 20 week Ma(green line) is acting as a resistance together with the 50 week MA(orange line) since both has been broken for the first time since late 2008.At that time the market had not started the big rally in the past 3 years, but still the market bounced close to 200 week MA(yellow line), which stands around 1248 at the moment.

Now if we check the gold graph in the monthly chart below, you can see the correction in 2008 bounced from the 50 month Ma(orange line) which stands around 1232 at the moment. In the monthly chart , the bull run of the gold is more obvious, and I think it is quite likely that the market to make new lows below 1520 , break the triangle in the daily chart to the downside, but bounce somewhere above 200 week/50 month MA.

All these being said, as mentioned before, I opened a small long position into Gold, keeping in mind a possible big down move, and adjusting my size accordingly. It looks like Gold is waiting for QE3 from US for the next leg up, together with a panic in financial markets .

Concerning the stock market, I would consider a bounce to the upside as a shorting opportunity, and to get long I am waiting for  some sort of action to relax the uncertainty in the credit markets in Europe.

Market review 10.04.2012

Sp future points to index levels around 1380 at the moment. It is almost 2 percent down from past month. The index made a brief high at 1422 before going down to as much as 1357. Meanwhile major European indices all are down around 10% from the highs with renewed concerns about the debt crisis. Gold is trading mostly sideways.

The daily sp index chart is below:

The index is trading around the breakout level (1370), but to the upside 20 day MA is the resistance at the moment around 1393.To the downside, 1357, 1340 and 1293 are significant levels with major support 200 day MA around 1273.

The weekly chart is as follows:

20 week Ma is around 1335 and 50 week around 1279.

To sum up, the bearish pressure built up once again in European markets, but the US equity markets are holding strong so far with earnings mostly better than expected. We will see which market will follow the other.

It seems to me that once again the European Markets are demanding for more easing in some sort from ECB to overcome the bearish pressure.

The long term indicator I use is flat, with mid term being still positive. Short term is negative.

16/03/2012 Market review

Sp index is trading around 1403, but considering the latest correction in Gold and with the up move in SP, the past month's rally from 1358 is more than 3% in real dollar terms.(spindex/gold went up roughly from 0.77 to .847 which is 10%!!)

Below is the daily chart in the sp index:

The market briefly went down the 20 day MA for the first time and without even touching 50 day MA, it bounced sharply.The first obvious support is 1370 level, the second being 1340, the low of the latest minor correction and 50 day MA(orange line) at the moment.

The weekly graph:

The decisive break through  is more obvious in this chart.

I am carefully watching the correction in the Gold, taking part of the profits past month was a good decision, definitely going to be a buyer around 1520-1550. It has the potential to go much lower as posted before(more quantitative easing is not likely for the coming months, and positive sentiment in the market is also a downside pressure), so size management is crucial for the long run.Short position in Aex costed some , locked in part of it in the correction but still kept more than half of the position.

Market indicators I am using:

short term(2-4 weeks): 0.717
mid term  (1-6 months):  3.324
long term  (6 months-) : 0.306

The long term indicator is flat.
The mid term shows strong uptrend is likely to be intact for the coming months,
and the short term shows the upmove is likely to take the market higher in the coming 1-2 weeks before a significant correction.

17/02/2012 Market review

The trend since late december continues, every down move is immediately bought. ECB's second round of longer term refinancing operation (LTRO)  on 29th february , the expectation of QE3 and the improved economic indicators in the US are the main drivers of the rally. The earning results  in Europe were a little disappointing but in the US ,they were better than expected for most of the companies. Major indices are taking year(some multi year) highs one by one.Overall, everything looks very good. That being said , i opened a small short position in Aex, and bought some out of the money puts because I still believe this rally is extremely  fragile ,the option premium is not that expensive and resistances are not broken decisively yet.

Below is the daily sp chart:

As you can see the market has been above 20 day MA(green line) after breaking the 200 day MA to the upside around 1250 at the end of December.1st support around 1333, and 2nd Major support around 1290.(50 day MA, orange line), and the 3rd major support 1255(200 day MA).

Next lets check the weekly graph:

Gold hit the resistance around 1750 and in a sideway action for the moment. I sold part of the position to lock in some profit, because I believe there is quite a good chance that the Gold will test 1520 level again, and even further down before breaking the alltime highs.

Overall, except my small short position in the index and long term long Gold position, the market is a wait and see for me.

20/01/2012 Market review

I shorted the market last month around 200 day Moving average. It did not work.The gold bounced back from the lows, that was the good trade for the past period.

Below is the daily chart of sp. The market is going up since mid december without a decent pullback. First support is the green line ,20 day ma around 1275 and the major support is the yellow line, 200 day MA around 1257.

Looking to the weekly chart below, the  supports below 200 day MA are the 80 week MA(blue line) 1235 and the 20 week MA(green line) 1227.

To summarize, the current market is a wait and see for me. Looking at the price action,it seems that the market turbulance during the summer and early autumn was just a correction in the bull market and the market is quite likely to make new highs, but I just dont believe it, thus i dont bet on it.

16/12/2011 Market Analysis

The market is kind of in a range, 200 day Moving average (yellow line ) setting the upside resistance for now.200 week Ma(yellow line in the weekly chart) is roughly setting downside support for now.

Nothing much to mention. A decisive break to the upside looks unlikely, and the momentum indicators are converging all to the sell side. Below is the daily and weekly graphs of sp daily index.

daily graph:

weekly graph:

Finally i bought more gold for the long term, and now i m watching the market action, to get out gradually in case the sell off continues below 1520s.Below is the weekly graph of gold:

The coming month , I will be watching the indicators closely to short the index.Happy holidays!

Market review 18/11/2011

I am still long the gold for the real long term, other than that, as planned last month  i was short some calls when sp was trading around 200 day MA, but now i covered them as the market getting close to the support, and european indices are trading around 50 day moving average although the short term momentum is still down.

Lets have a look at the charts. Check the sp index daily graph below:
As you can see, sp index traded 1296 when the news of an aggrement among eurozone leaders hit the market and european shares traded around 5 % higher for the day. After then, there have been quite some sessions where 20 day moving average acted as support and 200 day moving average was the resistance. The markets will probably test 50 day MA soon which is around 1205.

The weekly chart is below:
Both 50 week and 20 week MAs are flat, indicating a sideways priceaction for now, 50 week MA as the resistance for now around 1270. Weekly momentum is still bullish.

BAsed on the current price action, I am looking to get long only when the daily  momentum turns bullish.When i check the indicators, it doesnt look likely soon, maybe next week, but 200 day MA resistance sits tight around 1270, so the upside is limited for now. That being the case, I am waiting for an upmove, to short the market once again close to the 200 day MA.