NASDAQ 100 Correction Target

Now that interest rate hikes are under way, NASDAQ 100 will seek a correction to c. 4240.

EUR/USD Flattens out

The US Dollar  is over-priced, but interest rate disparity continues to press the Euro downwards.

 

There should be a EUKR/USD spring-back after yesterday's down-spike, but since the over-all motion is back towards my projected long-term Support Line (the green dotted line), this spring-back will be weak.

 

Whether it follows the gradual fall of the curved line or plunges down, I still project the dotted green line as the best guess of the slope of the Euro's emerging uptrend.

EUR/USD to down-spike for American interest rate hike

Yesterday's upswing has aborted this morning (16 Dec 2015) in antiipation of Yellen's announcement later today of an American interest hike. Expect a down-spike today.

EUR/USD Looking for Support

Blue Support Line S, referred to in my last post, has not held. The dotted green line is a guess as to the slope of the anticipated uptrend. The actual support level could be established at a greater or lesser slope. Reaching the green line is more likely to be gradual than sudden, and hemmed between the curves.

EUR/USD coming down off spike, but how far?

        

Coming down off its spike, we watch to see if EUR/USD  will stop at potential new Support Line S, or fall as far as the dotted green line, which we predicted as the slope of the uptrend.

EUR/USD Bonus Spike

A nice bonus to those of us who took a long bet on the Euro  is its new spike today, so long as we exit in time, of course.

Every spike has an apex followed by a down-slope. As to where exactly the apex is, your guess is as good as mine. Previous examples indicate the downturn will be sudden and sharp.

DOW on Down-curve

        

DOW INDUSTRIALS  began to trend downwards in Apr 2014, as expectation of an increase in FED interest rates began to take hold. The market rallied in Aug, with good performance figures and postponement of rate increases to year end. Year-end is nigh and the down-trend resumes. I have drawn a curve to indicate the probable Resistance level in the coming months, and predicting a level of 16,000 by mid Jul 2016.

EUR/USD projected price movement

The Euro flattened out this morning, indicating it will not fall any further from last Thursday's spike. I show the possible slope of the coming uptrend by a green dotted (Support) line, and an indication of how the price may move by a green curved arrow.

EUR/USD comes down off its spike

Having spiked on Thursday last, with news that the ECB will be less aggressive than expected in its Quantitative Easing program, the Euro now comes down from the spike. If an uptrend is emerging, as I epect, then it will meet support at or before the green line and, I guess, will not fall as far as the brown line, which I drew in a previous post to show the bottom that the graph was forming.

 

 

EUR/USD spikes

The jump in value of EUR/USD today is, surely, a spike. There is a definite break-out from the recent downtrend and this spike marks the beginning of the new uptrend. However, the slope of the uptrend is more likely to be that marked by the green trend-line I have drawn.

EIRL: betting on Ireland

EIRL is an Exchange Traded Fund  tracking the top 99% of Irish shares. The Irish economy grew by around 6% in 2015. Its projected growth for 2014 is around 4%. This is based on an expectation that growth will slow as the economy approaches its capacity. At the end of 2015, however, it is apparent that many Irish workers who emigrated during the recent recession are returning home, boosting that capacity. As the Irish construction industry takes off again, tax figures prove surprisingly buoyant, Europe and America continue to improve, and both the Euro  and Energy prices stay relatively low, 4% is looking very conservative.

The chart shows EIRL compared to Dow Industrials. A dip late in 2014, following excessive exuberance in 2013, means that Ireland is good value now, and should beat the Dow  in the coming months..

EUR/USD: Euro Area v. USA in GDP growth 2015

The above chart shows that the USA economy performed marginally better than the Euro Zone during the first three quarters of 2015 (2.1% GDP growth as against 1.6%)

However, the Euro fell a total of 25% against the US dollar between Apr 2014 and Dec 2015.

Euro Zone policy favours continuation of low interest rates and Quantitative Easing, while USA contemplates raising interest rates and paying off QE debt in 2016. These differences in policy do not justify the continuance of the low value of the Euro.

I believe the EUR/USD is at or around the bottom of its down-slide and will commence an upward trend soon.

I show my prediction for the Euro in the following chart: EUR/USD to reach $1.2 by next July and $1.25 by end of 2016.

EUR/USD I wait and watch

The curve I drew in my last Euro post holds. The Euro decline appears to be bottoming out. On Wed 3 Dec 15 both the Fed and the ECB will show their hands. Fed may emphasise the gradual nature of coming rate increases and ECB may lighten up on its Quantitative Easing program. Many punters, however, still expect parity before year end, pressing EUR/USD down. Perhaps 1.00 is the real bottom, after a short recovery this week. I wait and watch.

Dow and Nasdaq both have scope for correction

Nasdaq (blue) is more erratic than Dow Industrials  (orange). There is scope for a correction in both as interest rates go up just before Christmas.

EUR/USD bottoming out

Having risen for 6 months from Mar, the Euro  took a drop in October (when I went on holiday and) on news that US interest rates are to rise before year end, while Europe would continue its low rate policy. News that Great Britain is contemplating Euricide probably had no effect, since Sterling continues strong, Brexit is a long way off, and would be slow and negotiated in great detail.

I would guess  that the October down-trend is now bottoming out, but the re-emergence of its uptrend will be slow.

EUR/USD swings down

Hitting resistance, the Euro swings down against the US Dollar. The trend continues upwards, and we would renew our bet on the Euro at around $1.12.

EUR/USD liftoff

For the last two weeks, EUR/USD has been see-sawing between Support  Line C and Resistance Lie D.  Lifting off from Support Line C, I think we will see a little surge now, breaking through Resistance Line D

EUR/USD: believe what you see

Most commentators continue to expect the Euro to decline against the US Dollar -and still predict parity before year end. I, however, believe what I see.

I see my country, Ireland's, exports booming and tourists pouring in, partly because the low Euro makes our prices appear very low to those with Sterling or Dollars. In other words, Euro is undervalued and must rise, no matter how Ireland and, more importantly, the ECB, would want to keep it down.

The chart shows that an upward trend began around 13 Mar 2015. Still at a low slope, an acceleration of the uptrend is indicated. Last week's ECB meeting caused a dip, but the ECB can't, in fact, prevent the inevitable. A rise in American interest rates could bolster the Dollar - but is that not on the long finger?

Euro continues upwards against US Dollar

EUR/USD dipped out of the channel I painted in a previous post. However, it has rebounded and the trend continues upwards, maybe more gently than I had predicted.

NASDAQ on long-term downtrend

Having hit the target set in my last post, NASDAQ rebounded today. However, I would say that it  could repeat the pattern of the dotcom correction of 2000, (blue triangles). Upswings will occur, but the trend could continue downwards throughout 2016 and into 2017, until the long-term Support Line is reached.

NASDAQ next stop 4200

The channel is defined. Next stop 4200.

DOW downtrend becomes more definite

The upswing of the Dow after the Great Fall of China has ended (for now) and the downtrend is becoming more defined. Resistance Line A recedes into history. Resistance Line C looks solid, but there could still be a moderation of the downtrend via an upswing bringing us back to Resistance Line B.

EUR/USD upslope accelerates

The Euro has been trending gently upwards against the US Dollar since the Ides of March 2015. Now the upslope has accelerated a bit. Next peak around $1.18.

EUR/USD: Draghi stops Euro rise

The monthly ECB meeting today, showing European growth practically non-existent, inflation flat and money-supply increasing, threw a bucket of cold water on the Euro. Result: EUR/USD plunges, and I exit my position with egg on face. Will it continue to plunge or level out? Who knows?

EUR/USD upswing in progress

So far, I am justified in getting in early in my long position, as the upswing started without hitting the Support Line. Next peak will be around $1.175.

EUR/USD to swing up

It will probably fall a little more, but I am taking a punt on EUR/USD swinging from its present level to c. 1.16 in the next few days or week.

NASDAQ rises: I suck it

My prediction of yesterday was incorrect. NASDAQ (and DOW) rose to break through the blue Downtrend Resistance Line. The new Channel that emerges faces upwards.

Early morning sees European markets opening higher, but Bull-Bear tug-of-war very active. Who dominates will be a clue as to whether NASDAQ is at a peak. I would not bet on it rising higher, but expect a downswing.

NASDAQ overshoots in Chinese Fall bounce-back

Line A is the long-term Support Line that has held since 2013.

Line B indicates an emerging down-trend (in anticipation of coming interest-rate hikes, I suppose).

The bounce-back from the Chinese Fall has crashed through this emerging Resistance Line, but I expect the down-trend to re-assert itself, with probability that this Resistance Line will be re-instated.

DOW coninues downtrend after Chinese Fall bounce-back

After its bounce back from the Chinese Fall, the Dow continues its downtrend and tries to define a Channel in which to move.

DOW dead cat bounce

Well, that seems to be all the bounce it has got. We re-draw the Support Line, indicating a steeper downtrend.

EUR/USD to come down from peak, but continue to trend upwards

Every currency wants to devalue, so the ECB's long lead in the devalue stakes has come to a halt. When the Euro1.78% comes down from its current peak, it will rise to its next peak somewhere around the same. The trend continues upwards

NASDAQ a long way to fall

If NASDAQ is to be true to its history, now that it has started to plunge, it has a long way to fall.

DOW downtrend strengthens: Plunge will be compensated

Support Line A was breached on 25 May, indicating the beginning of a downtrend. Support Line B of the downtrend is now severely breached. Unless we are to see a market crash (for which there is really no reason), today's plunge should be compensated by a upwards surge. That is in the nature of spikes.

DOW to swing up from here in Downtrend

The present pattern suggests an upswing from here possibly as far as 173.50 (DIA price), followed by a downswing to c. 171, as the DOW continues is downtrend fuelled by prospect of Interest rise in the New Year. Final tentative target of the Downtrend is represented by the Green Line, in Jan or Feb 2016, at around 155.

NASDAQ to Swing Up in Downtrend

If the DOW is in a downtrend, why not the NASDAQ? I see the NASDAQ 100 swinging up for a bit (possibly to 4500), before continuing its nascent downtrend. Not as definite a downtrend as the DOW, but are not all the American markets to react the same to the prospect of interest rates rising?

Slowdown in DOW downtrend likely

Today, Wed 19 Aug, the US Central Bank will give a hint as to whether interest rates will rise in Sep. Most likely they will not - saving the markets from a severe plunge. Postponing the rise in interest rates will give the markets a breather. The curves on the chart show scope for the downtrend to slow down for a while.

EUR/USD longterm prospect is up

The long term chart shows the EUR/USD at the bottom of its natural zone, and rising from this bottom.

Downward pressures are the prospect of a rise in American interest rates and commencement of Quantitative Tightening in the US, as against continuing ZIRP and QE in Europe.

A week ago it seemed that these pressures had stopped the resurgence, but China stepped in to force the Euro to rise against the Yuan, which necessarily means rising against the Dollar. The balance has, perhaps, shifted back in favour of a rising EUR/USD.

DOW downtrend strengthens

Whatever the immediate stimulus (Chinese exchange rate cut?), the DOW downtrend has strengthened. We are now in for a deep correction. My chart shows DIA (DOW INDUSTRIALS ETF) continuing to fall from its present $172 to c. $145.

DOW downswing today

The Dow Jones is on a downtrend.

After yesterday's upswing, it will plunge back down today. Short DIA (Dow Industrials ETF) at c. $176, and take profit at $173.

EUR/USD rally runs out of steam

Monetary outflows from Europe continue according to Deutsche Bank.

US interest rates are to rise later this year.

QE, if the funds are not re-invested, will convert into Quantitative Tightening.

The US Dollar will strengthen again against all comers except, perhaps, GBP and NZD.

While the trend of the Euro against the Dollar has been slowly upwards since early Mar, this rally has proven rather weak-hearted and is running out of whatever steam it had. The year-long downtrend that began in May 2014 appears to be re-asserting itself. This week EUR/USD must break through either the Year-long Resistance Line, or the 3-month old Support Line. I guess that it is the Support Line that will not hold.

DOW downswing to continue another day or two

The downswing in DIA (DOW ETF) will continue to around 174, then swing back to c. 180.

EUR/USD hesitantly upwards

The Euro is at the bottom of its normal range. It seems to be undervalued relative to the US Dollar and should rise from here.

However, the expectation that US interest rates are to increase while ZIRP and QE continue to apply in the Eurozone puts pressure on the Euro to sink rather than rise.

The fact that US interest rate rise is not now expected until December probably indicates that the trend of EUR/USD will be hesitantly upwards for the moment.

DOW downswing to resume

I guess that yesterday's downswing (which saw a slight recovery at day's end) will resume today, but, if not now, later.

Dow downswing of 3% now

Though higher than I expected, yesterday's peak failed to rise above the previous peak on 18 Jun, confirming that the downtrend continues. Now for a downswing of over 3%!

EUR/USD uptrend slow to get started

Slow to get started, the trend is nevertheless upwards. Following previous patterns should see target of $1.16 reached in one month.

Dow: beware the Ides of July (15th)

Quite a surge in share prices this weekend (Thursday 9 Jul to today, Monday 13), giving mixed signals.

My guess is that the present upswing ends right where it is at now. This peak is unlikely to exceed the last peak on 18 Jun, but meet resistance at either the curved lines or straight Resistance Line R1.

Click image to enlarge.

EUR/USD Here she rises

Swinging down at the moment, the breaking news from Brussels of an Agreement between EU leaders on Greece, will see this downswing aborted and the Euro zoom upwards.

The purple triangle on the chart tentatively shows the shape of the emerging upwards channel.

The 30-day MA (720 hour) begins to turn upwards.

The US Dollar is certainly too expensive as far as trade is concerned, and the ultimate target of the upswing will be c. $1.50, by September, perhaps.

EUR/USD now trending upwards

Don't forget that you can enlarge the image by clicking on it.

The Euro's downtrend against the US Dollar is over. The trend is now upwards. A down-swing, however, is to be anticipated at present.

DOW downtrend to moderate

The trend of DIA (Dow Ind Av ETF) is downwards, but there is scope for a swing back towards the 30 Day Moving Average.

EUR/USD bottoming out

As Greece works towards an accommodation with Europe, the effect of the crisis on EUR/USD is lessening. The bottom is taking on a parabola shape, as is the top.

Will the EUR/USD stabilise at a value within the flattened bottom of the parabola, or will it start to rise? This depends on the market's belief in an American interest rate rise.

Recent FED statements tend to indicate postponement and minimisation. If this is what is believed, we should see a rise in the Euro when the present instance of the Greek affair is resolved - until an interest rate hike is seen to be imminent again.