- Since I wrote on this topic of indices at resistance, China A50 and HSI have printed new lows for May whereas FT100 and DJ30 as had at least 1 big down day.
- One on hand, this is not material for any big move but on the other hand, one must be focused. Fact is they are consolidating and they are resisted.
- We see big rallies today in SiMSCI, FTSE, DAX and HSI where at some point, they were >1% up but don’t lose sight – this could be a sucker’s rally.
- Given we know how correlated they are, I leave you to draw your own conclusions whether they are printing real rally or fake one. One thing is certain, one move all move.
- SiMSCI is parked at 2-week high and perfect spot for a wash and rinse.
- That same spot is also April low, easy for former support to become resistance.
- FOMC statement tomorrow could be a high impact news/excuse but for now, positive correlation with WTI is clearly the driver.
- This recalls the numerous FOMC false breaks that we saw last year.
- And yet the index is right under a resistance zone and exactly symmetry with left shoulder.
- Year open, left shoulder.
- China50 is at April low like SiMSCI and top of 6-day range.
- It is also resisted by MA (red), twice.
- HSI now under ‘2 YL’. This is former 52-week low and critically a level associated with Black Monday August 24 2015.
- Dax30 at right shoulder and prelude to a year-year reversal since it is parked under ‘3 YH’ or 2014-high.
- That means what ever gains made out of 9 months of 2015 is lost if ‘3 YH’ cannot be regained by bulls.
- See here.
From deficit to plenty in 26 minutes
In the meantime, the BS and bafflement must continue. From “supply deficit” to “still plenty of oil” in all of 26 minutes. This is a script to a bad story that I have read somewhere.
Bonus chart: Rallying into resistance – City Development
We must visit this chart in a few weeks to see the outcome. (Make no mistake – buying at resistance in a down trend is not the right mix for making lots of money.)
Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.
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