The weekly chart of $GBP/SEK completed an 11-month H&S top in mid January. This pattern has a price target of 11.18 SEK to 1 GBP.
How do you spell “Disaster?” There are two spellings” AP Moller-Maersk and Sotheby’s This week two companies had some very interesting things to say about their respective markets that have implications far beyond their individual niches. First, AP Moller-Maersk, owner of the largest container shipping company in the world, said it saw, “massive deterioration,” in its […]
A case can be made based on classical charting principles that the current decline in the U.S. equity markets is just phase one of a larger price decline -- in other words, that U.S. stocks are in a bear market. Consider the following.
Factor believes that the most significant price of the day is the closing price and the most signficant price of the week is Friday's closing price. The weekly closing price chart of the DJIA displays a possible H&S top pattern. This top has not yet been completed, but a Friday close below 15,800 would do so.
There are a number of forex crosses that indicate substantial trading opportunities for traders willing to hold positions for weeks or even months.
Before examining the current forex markets, a basic understanding of classical charting principles is approriate.
Eurocurrency (EUR/USD)
The long-term trend (as featured by the 45-year trendline) in EUR is under threat, as shown by the quarterly graph. The dominant chart construction is the 6-1/2 year descending triangle completed in Jan 2015. This pattern has a target of $.84. Such a decline would likely be accompanied by a massive change in the European Currency Mechanism (ERM).
As I have pointed out always constantly, I hate trading Silver. Silver can move $1 one way or the other and mean nothing technically. Gold is a technically honest market, and usually the leader. All things being equal, I would much prefer to trade Gold rather than Silver.
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If you are a trader, you will relate When an archer is shooting for nothing . . . he has all his skill. If he shoots for a brass buckle . . . he is already nervous. If he shoots for a prize of gold . . . he goes blind; or sees two targets […]
Sorry to all of you stock market doomsayers, but labeling the U.S. stock index charts as H&S tops just does not work.
Volume is an important criteria upon which to judge the validity of the H&S patterns. Richard W. Schabacker (Technical Analysis and Stock Market Profits), and later, John Magee and Robert Edwards (Technical Analysis of Stock Market Trends), are considered the pioneers in classical charting principles. According to the founders of classical charting, as a rule volume should be greatest in the left shoulder or head and lightest in the right shoulder in order to validate a H&S pattern.
As the charts of the Dow Jones Composite, Dow Industrials and S&P 500 show below, the largest slug of volume has been in the right shoulder. This is NOT a sign of a valid H&S pattern, thus the interpretation of a H&S top in the U.S. stock index charts is not likely to be correct.
The MSCI Index appears to be rolling over in a right shoulder of a significant top pattern. One must be blind not to notice the similarities between this potential top and the chart top completed in 2008. Also, notice how the right shoulder held at the 6+ year trendline. The completion of the H&S top would also violate the trendline. A completion of this top could lead to a decline toward 1400.
But I am NOT a doomsayer. In U.S. stocks I am NOT a bear and I am NOT a bull. In fact, I believe the S&Ps will remain in a range of 10% above the recent high to 10% below the recent low for the next five to eight years.
