View 8.5.2012

Waiting the indicators to start showing any sings of a bottoming process. Before the process, we can only enjoy the roller coaster ride.

Dax is heading to 6200.

Hang Seng is going to look ugly below 20.000.

EUR-USD is going to 1.25.

And wait AUD-JPY to touch 79.

Market overview 8.5.2012

Market rebounded yesterday as planned. Money flow is still positive, so there are chances for higher high. All the indicators are currently down and possible bottom could be near.

In a technical perspective Dax is in a longer term uptrend and tested the rising trend line. It rose back above it's Fibonacci 6544, which has many times proven to be very important technical level.

It also seems that Hang Seng Index has very important key level at 20551, which is currently holding.

EUR-USD broke down 1.31 which it has been trying already quite a long time. Currently the fall of Euro is seemingly related to politics and especially the last weekend vote results from France and Greece. Falling to a lower levels near 1.25 is still possible even it started to look ugly for other assets as well.

AUD-JPY didn't yet break down below 81, thus indicating that riskier assets are still in favor and the latest drop was only temporarily.

Thoughts about market short term conditions 3.5.2012

In despite of the trading models and algorithms, I see market in an interesting condition. My personal attitude is currently a slightly bearish, so it is easier to see the negative signs.

EUR-USD has been trying to get below 1.31 for a while. Breaking below 1.3 could take it to near 1.27 which should also take the stocks down. Also (high-risk vs. low-risk) AUD-JPY has been in a downtrend since the middle of March and we just saw new lower low. Will we see it falling below 81? At least the fall of both these currency pairs would definitely bring the stocks down in a short term.

And look at Dax while it is again about to try how the bigger rising trend line holds. If Dax breaks below the trend line, then 6544 is a definite. Although Dax has been trying to break below 6544 already since April 10th, this time the probability for a break down will be higher. Maybe we will see 6244? S&P 500 breaking below 1380 would take it back to 1357.

Without any serious bad news, the previous outcome should be enough to interest big players to push the buy buttons. At least the world seems to have a faith in US market and remember, stocks doesn't equal the economy.

Hang Seng, AUD and JPY

Hang Seng reached it's Fibonacci 61.8% and now tries to reverse. Decline below 21200 could signal further decline to 20500. Daily MACD is weak.

Even the Japanese have intervened Yen, trying to weaken it, they might have succeeded in the short term. Usually these kind of effects are not long lasting. Investor gauge AUD-JPY made a reversal candle yesterday by touching Fibonacci 76.8%, and is now trying to head lower.

Global sentiment week 51

At the forex market, one good barometer of risk sentiment is AUD/JPY. The global sentiment has been pessimistic since June. Currently it is consolidating or trading in a symmetrical triangle.