EUR/USD in the Support Zone

The Euro is in the Support Zone I drew in a previous post.

I expect it to swing up from here. However, there is a possibility that the forthcoming British referendum on leaving or staying in the EU may cast a shadow and tempt the market into pushing the Euro down against the US Dollar.

Caution is warranted: watch for the beginning of the rebound before betting on the upswing.

DOW downswing to resume

Over the last 6 weeks the downtrend of the Dow has stalled. There is still quite a distance of downward movement to go before the correction is complete. Another downswing is imminent.

NASDAQ downtrend may be at an End

Having broken decisively through Resistance Line A, this phase of the NASDAQ 100 downtrend is at an end.

Resistance Line B has also to be breached before the overall downtrend can be seen to have ended.

Even then, it does not seem likely that the recovery will go as far as Line C. I am guessing (if the index does not plummet through the 5-year Support Line, creating a greater correction) that the corrected NASDAQ will stay within the purple range I have drawn, based on the 5-year trend.

NASDAQ: Nothing is sure except the swing.

Bouncing off my red curve, (as I predicted), NASDAQ swings downward.

Since a change in trend-direction may be imminent, we are uncertain how far the downswing will go. It may not reach the green curve, but, then again, it might crash right through it. If it does, it has a long way to go. If it does not, we see that a bottom is forming to the downtrend.

Nothing is sure except one thing:
That stocks and shares will always swing.
Whether the trend is up or down,
The swing is always to be found.

Swinging high and swinging low,
Who can tell how far 'twill go?
Guided by what has gone before,
We guess old patterns will repeat once more.

Sometimes we're right; sometimes wrong:
One principle will guide us all along -
To limit the amount we risk,
So that profitable trades are larger hits.

We limit the risk by one device:
Quit quickly when we've not guessed right.
But hold on when it goes our way,
So that the trade will truly pay.

Watching out so we will surely spy
When the darn punt has gone awry.

NASDAQ and DOW soften their downtrends

The plunge I predicted in my last post on the NASDAQ did not materialise. Instead the graph broke through Resistance Line A. We can't say that the downtrend is finally over until the graph breaks through Resistance Line B. In the meantime, the downtrend has softened. I will not bet on the current upswing breaking through the red curved line, nor the ensuing downswing breaking through the green curved line.

EUR/USD stays within its channel

The EUR/USD  continues to swing up and down within its channel. The downswings tend to be gentler than the upswings. The current downswing is likely to continue at a gentle pace until the graph touches or enters the Support Zone. I remain neutral for the moment.

NASDAQ rebound is over

The ten-day rebound of the Nasdaq is over. The green arrow indicates how the graph will plunge over the next few days.

DOW sticks to downward path

Repeating the chart I drew 9 days ago on tradingview.com shows DOW INDUSTRIALS INDEX sticking closely to the downward path I laid down with very little wandering off-track. The green curved line shows that there is considerable scope for varying from the path while still continuing downwards. At present the graph is half-way between the predictive curve leading to the expected bottom and the one leading to the worst scenario. Though there will probably be half-hearted rebounds along the way, the chart is on line to hit a bottom below 15000 by year-end.

QE and ZIRP (Quantative Easing and Zero Interest Rate Policy) brought the Dow to its 2015 height. Now is Payback time for QE loans, and the ending of ZIRP. These changes are sufficient to bring about a correction to the "expected bottom." A serious deteriation in world economics might cause a further plunge back to the "historic slope," which I guess would be the worst scenario.

EUR/USD slope rises

The Euro's peak hit a new height, forcing us to review our current channel. I have drawn Resistance and Support Zones instead of lines, to articulate the ambiguity. The trend, of course, remains upwards; downswings probably remain gradual.

DOW overview

Chart show summary of Dow Industrials  since 1980. Click to enlarge.

EUR/USD Spike: Where will it find Resistance?

        

In my last Euro  post I displayed a 23 year chart and justified my 2016 Projected Upslope.

 

Today I zoom in on the current spike. I draw a speculative Resistance Line parrallel to the Current Support Line. If the graph repeats the pattern of December's spike, there may be a gradual rather than a sudden drop back to, and no further than, the Current Support Line.

DOW pattern for 2016

The graph shows the performance of DOW INDUSTRIALS since 1995.

 

Human institutions, like nature, are creatures of pattern. Expecting this graph to repeat the patterns of the past, I draw two S shaped curved lines linking the expected bottoms and tops for the coming period.

 

I expect the downtrend to continue for the entire of 2016. A further 7% will be lost in this Bear Market, bringing this  index below 15.000.

EURO On a Spike

The Euro  jumped 2% today against the US Dollar. I reckon this is a spike and it will now fall back, though perhaps not by the entire 2%.

The chart shows the entire history of the Euro  against the Dollar, going right back to 1993. The uptrends have been consistently more or less at the slope I projected for 2016. Coming down off today's spike may bring the graph back in line. There is, however, plenty of precedent for the spike to be continued for a day or two longer! before coming back in line.

DOW and NASDAQ continue downtrend despite upswing

While the US Markets rebounded last week, they are still within the parameters of a Bear Market.

 

DOW Industrials  shown by orange coloured graph and trend lines, and NASDAQ 100 shown by blue graph and trend lines.

 

Neither appears near the end of the current correction; so the Bear Market is likely to continue for most of 2016.

 

Click on Image to enlarge.