Pound Sterling rallies a little after Scottish poll

The Pound Sterling has rallied against the US Dollar (GBP/USD) following the "No" vote in the Scottish referendum. It should not, however, be expected to carry the price back to the level it held before the debate on Scottish independence started.

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The graph shows the progress of the Great Britain Pound (Sterling) against the US Dollar over the past 5 years. It has been trending up and down within bands marked by Trend Lines A and B. The Horizontal red line shows the position it held before the Scottish referendum on independence drove the price down. This slump, however, was just the continuation of an existing downtrend. The rejection of Independence has brought an upswing in the price. The strength of the American economy, and the political confusion over devolution of powers within the United Kingdom, however, will tend to continue the sentiment that supports the downtrend. Conclusion: it is unlikely that the present upswing will bring the price back to $1.66, held before the debate on Scottish independence started. The upswing will quickly run out of steam and allow the downtrend to continue.

Significant events: today Scots vote, tomorrow Alibaba launch

Two significant events for share punters:

• Today: Scot vote on Independence. If yes, GBP will rebound; if no, it will have a volatile period.
• Tomorrow: Alibaba launch, in money terms the largest ever on the USA market.

S&P Downswing aborts

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My predictions proved incorrect. The expected downswing has aborted, to the detriment of my Shares Punt. It is on the cards that it will resume, and though the markets march strongly ahead despite all my nay-saying, there is still a large correction due before the end of the year.

EUR/USD Joining the dots: downtrend to end soon

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Just for fun (or out of frustration) I joined up all the Dotted Lines. This produced a pretty picture until I added the Bollinger Bands, which messed up the pretty diamond shape. The net outcome is that, while the present strong downslope was predictable, where it will end is not so clear. From the chart, it would appear that the end will be soon, possibly around $1.290. The Fundamentals indicate otherwise. US interest rates will rise sooner than Euro rates. The ECB will introduce vigorous Quantitive Easing. Both of these factors indicate a continuing decline of the Euro. However, ECB freeing up bank cash will stimulate EU economic growth and maybe even inflation. This won't be immediate. The markets are, however, wiser in their ways than the economists. They respond more to sentiment than to analysis. The charts have often been right where the analysts were wrong. Summary: I don't trust the present downtrend to continue much longer. A bounce-back at €1.290, lasting a few months, and then either a serious bounce off the Resistance Line, bringing a deeper down-trend, or a break-through of the Resistance Line, bringing a serious up-trend. I can go no further.

Market plunge now due; may affect Apples resurrection

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As in my previous post, I show the Ripple Bounds and the Down-swing trend line of S&P500. Following the previous downswing pattern, a plunge is now due, today.

As to Apple:

Having spiked yesterday on the occasion of its special event, and fallen back to pre-spike levels, Apple should now climb back up to $103 - unless the general flight of cash from the markets today impacts here. Despite a real fear that the market slump may have negative impact, I have re-opened my position on Apple. This is daring, as the sun-shine in Dublin is too bright to allow me to keep watch over such mundane matters for the purpose of making a rapid exit if it goes the other way.

Alibaba IPO - Trade Alibaba shares

The Alibaba IPO which is imminent (meaning it will happen any day very soon) will, apparently, be the biggest company launch ever in the USA. Buy (or sell) Alibaba shares here, but be warned: CFDs are bets on whether the share will rise or fall: you can lose your entire bet, or make a remarkable profit, depending on which way the shares go, up or down.

S&P500 New Trend emerging

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On the chart, I draw the established trend lines and the emerging trend lines that I perceive, which I have labelled "New Trend." A downswing is under way, which I predict as following the slope of the last downswing, complete with Ripples and, no doubt, plunges. Should this downswing, as I expect, break through the Established Trend's Support Line, this does not necessarily mean that the Trend Reversal has set in, and the graph may find resistance at the New Trend's Support Line. However, a Trend Reversal, complete with a deep plunge, is still on the cards.