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Are we building for a deeper selloff or a bounceAsian markets remain looking heavy as the HSI and Nikkei Daily timeframes press lower. The US has been more resilient to negative news and remains focused on inflation and interest rates. The question is how much of the good news ie/ strong economy and bounce from pandemic lows has been factored in to price action in the US. If the US start to take a hit, then other markets will follow....so are Asian shares markets flagging what is to come. Check out the video for a more detailed look at key levels for major US, Asian and Australian Indexes. Remember to check out the website www.tradethestructure.com and leave a comment a thumbs up for the video.
ASX:XJOShort
by TradeTheStructure
3
XJO Short - Potential Traditionals RetracementIntroduction Date: 02/12/21 Time: 11:00 AEST Topic: Traditional markets bearish Forecast : A drop down to about to the red weekly supply zone (currently encroaching on it). Will be watching closely to see whether we reverse and gear up again, or are in for more prolonged pain Summary The traditional markets seem like they are experiencing some painful bleeding. Since the March 2020 Covid dump, the world economies bounced back rather aggressively. That said I believe there is a growing disconnect between the Delta variant (and potentially the new Omnicron variant) and the economy. Along with this, there seems to be more division within the world relating to the vax, mandates, politics etc. Countries worldwide are having more aggressive postures towards one another (Russia-Ukraine, Chine-Taiwan & Israel-Iran). China has had to cut back on electricity usage and Europe has stated that over the winter months their citizen might experience. Russia has made new gas deals and is limiting output to certain European countries. America's days seem numbered under the current president with all-time-low ratings and America is experiencing increased rioting, looting and racial divisions. Worldwide inflation is seemingly skyrocketing and concerning, with the FED having printed roughly 40% of the global USD money supply since the start of 2020. There has been a large increase in the purchase of precious metals by banks and citizens which makes me think this isn't over. Whether things will get better, or we head into more prolonged pain with a potential for a Black Swan event, time will tell. If you have an equities portfolio, I would consider either selling your position into cash, hedging your portfolio with inverse ETFs or long puts (that way you avoid selling out of your positions and incurring CGT), or a more risky play is entering a short position. I am waiting for a proper bounce out of the supply (turned demand) zone and confirmation from news and the algorithms, before I enter long again About Me: Starting off as a typical retail investor, I entered the trading space in 2017 and proceeded to buy bitcoin as it was going up thinking the moon was the limit. Safe to say I was wrong and learnt very quickly that 'What goes up, must also come down at some point'. Since then I did a proper trading course where I learnt the art of Technical Analysis and have never looked back. Increasing my knowledge from reading a tonne of books, listening to podcasts as well as reading and researching other traders has really benefited my trading skills and style. I am now a full-time equities & cryptotrader at one of the first firms specialising in cryptocurrencies. I am also a coach, teach and mentor to other like-minded individuals who want to succeed within the trading space. If you want to learn more about TA, trading and be financially independent, then let me know and I will help you get there! Financial Disclaimer: I am not a registered broker/analyst/investment adviser. The information contained within this post is general/educational information only, not financial advice and should not be treated as such. Trading and investing in Forex, Stocks, Commodities and Cryptocurrencies involves high risk, and is not recommended if you are not a trained investor, who has conducted proper research and training. Viewers are responsible for how they use this information and I am not responsible for any losses incurred as a result of the information provided. Please consider carefully whether trading is suitable for you, given your current circumstances, financial situation and knowledge.
ASX:XJOShort
by OllyBakker
1
ASX 200 @ 1 Dec 2021Text me if you have any questions/comments for me. ----- In the last Market Watch analysis done on 2 November (red dash line), I wrote that I would avoid the big caps (eg. Blue Chips, ASX 200 constituents) while being more selective with my purchases. Since then, the ASX 200 tested and failed to break the 7450 resistance and is now falling towards the strong support zone near 7200 levels (orange line). The ASX 200 previously rebounded from this support zone and another rebound would be good. The index is also testing the long-term average. Judging by its historical performance, I can’t say that the long-term average is a very strong support. Since 1 Dec 2017 (blue dash line), the ASX 200 has only rebounded of the long-term support 2 times (blue arrows). The red arrows were when the index was rejected by the long-term average. This does show that the index does at least respond to long-term average – albeit not often as a support. The red thumbs downs were periods when the index just fell through the long-term support. My huge concern is whether the ASX 200 will fall below the 7200-support zone. If it breaks this support, the overall market will likely be in a world of pain for at least a few weeks. The US market hasn’t really shown convincing signs of a strong rebound. If a strong retracement takes place over the coming days in the US, I have a strong feeling that the ASX 200 will fall off the support that it is sitting on. Our best-case scenario is that the US creates a new all-time high in the next couple of weeks and the ASX 200 will take the hint and slowly rebound again. With the integrity of our politicians being called into question and the federal election happening in less than 6 months, the markets will continue to be in state of flux. Rising inflation and potential Omicron scares will continue to disrupt the economic recovery. In last Saturday’s FB livestream, I explained around the 17-minute mark how the US and Australia markets’ movements is signalling that there is a lack of confidence in the ASX market. Personally, I have reduced my trading portfolio from 6-8 stocks down to 3 stocks. I’m increasingly being more selective in my purchases as sometimes, doing nothing in the market is a form of capital preservation. How about you? Are you optimistic or pessimistic on the ASX market over the coming 6 months? Are you aggressively buying now or waiting for stronger rebounds or retracements?
ASX:XJO
by Jerm88
ASX 200 @ 2 NOV 20212 November 2021 – Market Watch The last time I did an analysis on the S&P/ASX 200 was on 26 October (red arrow). I said that it was good that Blue Arrow No. 4 didn’t look likely to take place and that’s a good sign for the short-term. How wrong I was as the ASX 200 quickly retraced to fall below the (i) 7400 psychological support, (ii) short-term support, and (iii) mid-term support. In last Sunday’s FB livestream, I was lamenting that the US indices continue to create new all-time highs but the ASX 200 tries to find every opportunity to disappoint. A head-and-shoulder chart pattern is forming and a break at the neckline (7250 levels) could spell trouble for the short- to mid-term. With last week’s inflation numbers coming in higher than expected, investors are pricing in an early interest rate hike. Today, the Reserve Bank of Australia’s (RBA) Governor did nothing to calm investors’ nerves by not reiterating that official interest rates will not be increased until 2024. Interest hikes are a tool to counter the rise on inflation. Inflation is usually a sign of the broader market recovering more people re-joining the workforce, increase in wages, increase in spending, etc. At the same time, interest hikes also mean that the cost of borrowings will increase and thus, temper any potential spending sprees like properties, quick business expansions, etc. As seen in the US in late September, any talk of bond tapering can spook the markets as that is a precursor to interest rate hikes. With no confirmation that the RBA will wait till 2024 to increase rates, there is a potential that the ASX 200 will see more downwards pressure in the coming days. The US markets recovered from their September scare to create new all-time highs. How about the ASX 200? Will it recover above 7600? Or are we looking at a re-test of the 7150-7250 support zone again? I’m personally avoiding the big caps while being more selective with my purchases. How about you? Is this another opportunity to average down? Or are you waiting for more signs of recovery? If you find this market analysis helpful, let me know in the comments. May the markets continue to be with us!
ASX:XJO
by Jerm88
ASX 200 @ 26 OCT 2021Text me if you have any questions/comments for me. ----- The last time I did an analysis on the S&P/ASX 200 was on 12 October (red arrow). Since then, the ASX 200 has broken through four resistances: - (i) counter-trendline (purple dotted line), (ii) short-term average, (iii) mid-term average, and (iv) the 7400 psychological resistance (orange line). Within 2 weeks, the ASX 200 has recovered almost 2.3%. During the same time, the S&P 500 has rebounded by almost 5%. In last Sunday’s FB livestream, I compared the ASX 200 and the S&P 500. I’m sure quite a lot of us have wondered why the ASX 200 retraces faster but rebounds slower than its US counterpart. This is a clear sign that the ASX 200 index is weaker. I covered more ground during the livestream, so I suggest checking that out. However, I do want to address the issue of bond buying (ie. printing money) being “financial doping”, “unsustainable”, “bubble creation”, and “impending major crash.” Economics 101 has taught us that printing of money is bad as it would greatly depreciate the country’s currency. Comparing the USD/AUD on 1 Feb 2020 till today, the USD has depreciated by around 10% during these months of heavy printing of money. At the same time, the US stock markets’ post-Covid crash recovery have almost doubled Australia’s recovery. Combining these two things (ie. currency depreciation and market recovery) would see a net gain for the US markets. I infer that the wider benefits to the economy (ie. global financial market stabilisation, job creation, etc) outweighs the currency depreciation factor. Personally, I would take my hats off and say that the bond buying exercise has achieved its intended objectives. At the same time, I’m also pretty sure there will still be a shock to the market once the financial teat is pulled out of investors’ mouth. When that happens, it’s likely that the ASX will retrace faster and recover slower than the S&P 500 again. Besides that, during the livestream, I also shared about the 4 potential directions that the ASX 200 could take over the next few weeks and what each direction would mean to the market. After 2 days of trading, it’s starting to look like Direction No. 4 (ie. Blue arrow = immediate retracement) is unlikely to take place and that’s obviously good news in the short-term. An immediate retracement would have spelt trouble as it would have heightened the importance and strengthened the resistance of the 7400 psychological zone. The US Federal Reserve’s FOMC meeting is taking place next week and we will have more clarity as to when the Feds will start tapering their bond buying exercise. With the Dow and the S&P 500 continuing their strong recovery and creating new all-time highs every day, I am expecting a strong pullback to happen soon. It’s important to make a distinction between feelings and facts. I have been expecting a pullback since mid-October but if I had gotten out of the market early by “predicting” certain directions, I would not have made continued gains. As a Trend Follower, if the stocks or index is still in an uptrend, I will continue to stay in the game until the uptrend breaks. Being trigger happy and selling too soon will cause a lot of heartache in trading.
ASX:XJO
by Jerm88
3
ASX 200 @ 12 OCT 2021Text me if you have any questions/comments for me. ----- 12 Oct 2021 – Market Watch The last time I did an analysis on the S&P/ASX 200 was on 5 October (red arrow). Since then, the ASX 200 has recovered less than 0.5%. It is currently testing the counter-trendline (purple dotted line). A failure to breakout would likely see another retracement to the 7200 psychological support. Further overhead resistance looks to be around the 7360-7400 levels. Last week, I mentioned that I would be more willing to trim positions rather than add new ones especially if there is no good recovery in the markets. At that time, I was exploring 1 or 2 buying opportunities but instead, I entered 3 stocks that have given me gains of up to 4%. Besides the purchases in Australia, I was also adding 3 new stocks into my US portfolio and 1 new stock into my Malaysia portfolio. Why did I suddenly become bullish when I am naturally quite conservative? As explained during last Sunday’s FB livestream, I was quite happy with the news that the US debt ceiling crises has been averted for now. The US government has kicked the can down the road to early December 2021. This should calm the markets for the next few weeks before the political rhetoric heightens again towards the end of November. The US employment figures that came out last Friday disappointed the market and points to a slowing down of job creation. The combined number of jobs created in August and September were less than 50% of the target of 1 million jobs. I have a strange feeling this would temper the FOMC’s hawkish stance and they might even elect to postpone making an announcement on tapering bonds next month. If my gut feeling is correct, this would place a lot of pressure on the tapering announcement to be made in December’s FOMC meeting. Couple this with the debt ceiling crises that will no doubt loom large again, I expect that these twin risk events will create a lot of uncertainties in the markets. When the US sneezes, the whole world gets lung cancer. I don’t think we will be spared here in Australia if there is a retracement in the US. As I mentioned previously, I still expect that a strong retracement will place in Australia over the next 2-3 months. With all that doom and gloom, why did I enter new positions? Personally, I used the previous retracement (in late Sep and early Oct) to find stocks that were outperforming the market. Usually, when the market recovers, these stocks will tend to outperform the market and recover at a faster pace. Besides that, with most of the uncertainties coming in early December, I expect the markets to experience a mini bull run at least over the next few weeks. With that said, I am still trigger happy and I will cut my positions in a heartbeat if the markets turn against me. How about you? Have you entered new positions? Or are you looking to sell some old positions for a quick profit (or lower loss)?
ASX:XJO
by Jerm88
6
ASX 200 @ 5 October 2021 5 Oct 2021 – Market Watch The last time I did an analysis on the ASX 200 was on 27 September (red arrow). I mentioned as long as the index doesn’t experience a successful push to 7500 levels, I would likely trim positions instead of collecting new ones. With uncertainties stemming from the twin events of the US debt ceiling and Evergrande, the ASX 200 has tested the lower boundary (7150 levels) of the support zone (highlighted in blue). Even though the index closed with a pin bar and on the upper boundary (7250 levels), I still think it’s too soon to say that this is the end of the bleed. As I mentioned on Sunday’s FB livestream, I am expecting the next 2-3 months to be a difficult period to trade. US President Biden has voiced out his pessimism of being able to raise the debt ceiling. If that is unsuccessful, will the printing of money end? Whether you like it or not, the global equity markets have benefitted from this additional liquidity and the thoughts/fears of even turning off the tap can send markets crashing. Evergrande finding a majority buyer for one of its subsidiaries has injected some confidence into the markets; at least for the near term. I still think more needs to be done to restructure the huge debt but I’m cautiously optimistic that the Chinese government will step in. As it is, there is already a directive to government-linked companies to do all they can to help out Evergrande. Reading between the lines, this usually means buying the distressed assets of Evergrande. To get more of my commentary on Evergrande, you can watch the livestream recording (text me for the link) starting from the 16-min mark. I have exited almost all of my positions last week and I am only left with one stock. Will I buy more? I am evaluating 1 or 2 possible buying opportunities, but I am not anywhere close to pulling the trigger yet. I don’t subscribe to the diamond hands philosophy, especially when it comes to my trading portfolio. Thus, I prefer to be very selective in this uncertain period. How about you? Are you collecting more stocks now? Or are you keeping your powder dry and buying in when the retracement has ended, and signs of market rebound has appeared? If you find this market analysis helpful, let me know in the comments. May the markets continue to be with us! Disclaimer:- I’m a mid-term trader and I hold my stocks between 1-3 months. I’m using Trend Following strategies and my analysis will be from a perspective as a Trend Follower. I’m sharing these analyses for learning purposes and as always, DYOR.
ASX:XJO
by Jerm88
2