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Wednesday, 8 October 2014
Euro to rebound
The Euro has touched bottom (i.e., Support Line) against the US Dollar and may be about to rebound. This is indicated by the Chart. Contrary indications are that the Sterling and US Dollar areas will be seeing increases in interest rates in the coming months, which should tend to depress the EUR/USD and EUR/GBP further. For the moment, the Euro seems to be finished its downtrend against the Dollar and may be about to commence an uptrend.
Tuesday, 7 October 2014
Market slide continues today
S&P oscillated up and down as it slipped down the slope of the downtrend today.
Although now at the bottom of the range of the present downtrend, I think I might leave a position open overnight, since by now the Bulls must be getting a bit nervous and the fall therefore likely to continue after hours.
Although now at the bottom of the range of the present downtrend, I think I might leave a position open overnight, since by now the Bulls must be getting a bit nervous and the fall therefore likely to continue after hours.
Mild Monday market means meltdown coming
Monday 6 October was no Black Monday. After rising early, prices slipped back later to show a slight drop overall.
As astute investors pocketed profits after a long summer ascent, the Bulls did not believe the uptrend was ended, but saw opportunity in the reduced prices.
You and I have, however, sold our stocks and will see investment opportunity when prices fall forty percent, or level out at thirty.
As astute investors pocketed profits after a long summer ascent, the Bulls did not believe the uptrend was ended, but saw opportunity in the reduced prices.
You and I have, however, sold our stocks and will see investment opportunity when prices fall forty percent, or level out at thirty.
Sunday, 5 October 2014
Review and renewal of Black Monday pledge
I expect the markets to fall this coming week.
This image shows the shape of the FTSE 100 since 1990. It has kept within the range described by the shaded polygon. Having reached another apex in line with the previous 2, it has commenced to drop along line D. Early in the week, I made good gains, but lost them when I was too eager to get back in on Friday before its little bounce-back had come to an end. In the coming week, I must be ready to re-enter as soon as it resumes its downward movement, which could, as I speculated in a previous post, become a crash.
The S&P 500 faces an even bigger drop, having twice broken out of its polygon, first on the down-side and, this year, on the upside. It is not quite so clear that it has started the down-trend: as I indicated in a previous post, it may have a double or treble peak at its present level before dropping.
The rise of both indexes to their present highs was driven by quantitive easing and low interest rates. The Quantitive Easing programmes are being wound down, and interest rates mus rise from their present abnormal lows. Sterling has signalled that the interest rates will rise in 2015, but the American Fed has indicated that the low rates will be continued for the present.
The markets know that, whatever words issue on the matter, interest rates will rise. They won't wait, but anticipate. Therefore, I expect both indexes to tumble sooner rather than later.
As to forex - EUR/USD and GBP/USD:
My polygon suggests that GBP has more ground to lose against the US Dollar, before a rebound is due.
My polygon on the EUR/USD suggests that the present downtrend might be coming to an end. However, the raw facts that the Eurozone is only commencing a programme of Quantitive Easing and that there is no prospect of an interest rise in this zone for the foreseeable future, indicates that there will be another substantial movement to the downside, whereupon the polygon will need to be redrawn to show the previous extreme dip (from 2000 to 20003) as the normal bottom.
This image shows the shape of the FTSE 100 since 1990. It has kept within the range described by the shaded polygon. Having reached another apex in line with the previous 2, it has commenced to drop along line D. Early in the week, I made good gains, but lost them when I was too eager to get back in on Friday before its little bounce-back had come to an end. In the coming week, I must be ready to re-enter as soon as it resumes its downward movement, which could, as I speculated in a previous post, become a crash.
The S&P 500 faces an even bigger drop, having twice broken out of its polygon, first on the down-side and, this year, on the upside. It is not quite so clear that it has started the down-trend: as I indicated in a previous post, it may have a double or treble peak at its present level before dropping.
The rise of both indexes to their present highs was driven by quantitive easing and low interest rates. The Quantitive Easing programmes are being wound down, and interest rates mus rise from their present abnormal lows. Sterling has signalled that the interest rates will rise in 2015, but the American Fed has indicated that the low rates will be continued for the present.
The markets know that, whatever words issue on the matter, interest rates will rise. They won't wait, but anticipate. Therefore, I expect both indexes to tumble sooner rather than later.
As to forex - EUR/USD and GBP/USD:
My polygon on the EUR/USD suggests that the present downtrend might be coming to an end. However, the raw facts that the Eurozone is only commencing a programme of Quantitive Easing and that there is no prospect of an interest rise in this zone for the foreseeable future, indicates that there will be another substantial movement to the downside, whereupon the polygon will need to be redrawn to show the previous extreme dip (from 2000 to 20003) as the normal bottom.
Thursday, 2 October 2014
FTSE downtrend has started
The FTSE downtrend has started. The American markets will follow suit, no doubt, when they open later today.
Click to enlarge image.
For 3 years the FTSE100 has kept above Support Line C. It has now crashed through that support, indicating that a downtrend is under way. The last FTSE Bear-market lasted from October 2007 to February 2009. The present one may be swifter than that, being, perhaps, a response to expectations of increased interest rates rather than economic recession.
Click to enlarge image.
For 3 years the FTSE100 has kept above Support Line C. It has now crashed through that support, indicating that a downtrend is under way. The last FTSE Bear-market lasted from October 2007 to February 2009. The present one may be swifter than that, being, perhaps, a response to expectations of increased interest rates rather than economic recession.
Wednesday, 1 October 2014
Today's plunge in the markets presages a great sell-off
I have joined the bottoms for the last year on the graph, giving me a Support Line. Today the graph plunged downwards to kiss this line.
First day of October and already the Markets are plunging. However, it is not yet conclusive that this is any more than a down-swing within the range of the present uptrend.
The graph will either bounce off the Support Line, indicating that the uptrend will continue for the present, or break through the line, signalling the beginning of the great sell-off. If not now, undoubtedly the sell-off will take place later this month.
Only one Wager now: Black Monday to Win
October is a month when investors review their portfolio. After a sulggish summer, this often signals a new period of growth. However, this year the summer months have seen an exceptional rise in share prices. Many traders will now be inclined to take profits, a fortiori because Interest Rates are due to start rising soon. Should the sell-off drive the chart through Support Line S, there will be a massive exodus, reminiscent of previous Black Mondays. This may not happen on a Monday, but is coming soon. To have anticipated a Black Monday would be the punt of a lifetime!
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