Last week was a badbad week for shortist (i am one of them). Because after every small pull back the market just went higher!and higher......and higher.... Well, that is how the market works...now it is making all the bears hiding and you still remember the days before oct?where the bears were out there roaring?HAHA...Let's see how long the bull can run. Here are some of my market outlooks for next week.
Okay, starting with SIMSCI,SIMSCI had a relatively weak and uncertain two days on thurs and friday. But i would say that for now 312 is a resistance turns support. With this support and strong rally in DJI, i am expecting SIMSCI to rally to 320-322 region before facing strong headwinds to rise further. Then I might look for weakness from the double tops which is formed. Thus I wont short or long unless i see a clear signal from the chart. Putting on a long position to me is very risky and the Risk and reward ratio (RRR) isn't good for me.
Next we can look at how is the DJI doing,as mentioned it rallied 166 on friday backed by a string of good news . This bull is unusually STRONG. I am rather worried about this rally as it seems getting unstable and out of control.HAHA. I saw the bull clearing resistance of 11540 as subsequently the recent high of 11620. So clearly bull is still strong. But nonetheless I am looking at certain levels, e.g. 11720 and eventually 11880. If you are daring enough a pull back to 11540 or 11434 region should warrant a long if you are still bullish about this current rally to go even higher.
I been watching the USD basket which tracks the euro,aud,can,swiss franc and yen. It is still going even LOWER and lower....but i do see some divergence in the USD basket, but a word of caution it is still falling inside the downtrend line. But I had noticed few levels of consolidation,7718-7733 and 7780-7795. I am looking at a third consolidation whereby some strong movements of the USD basket can be observed.
I shall blog on something which I have seen for the past few days and still observing, that is gold! Looking at the chart of gold, I do see a so call ascending triangle. Although the ascending triangle is a trend continuation trend, I am observing it in gold. But using this formation I see that gold, had tried to form 2 ascending triangle (both of different gradients as can be seen with the red and the black lines from $1530 region. The first formation break down (from the black line) and that is a failed triangle as it fails to move above $1680. But after which gold price went up steadily retesting 1680 a couple of times. This prove to be a very strong Resistance. And note that prices of gold had been ranging between 1660-1680 the last few days.I am looking at this level (1680)to break conviencingly with target price of $1725. If it fails gold might just get lower.
I am having two thoughts for gold. Gold had been moving in sync ( in a inverse manner) with USD basket. Most of time that is the case since people uses USD to buy GOLD. With my analysis on the USD , if it were to finish consolidation and move higher, I will short gold if weakness were to appear in gold. So far weakness hasn't been observed for gold YET.
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