Price action in 8 forex, stock indices charts might be shaping up Q3 to be market top for the whole of 2016. When viewed against the big picture i.e. year to year movement, there is no real strength/bullishness in these charts. All of them looks just like retracement. There is a high level of confluence in each, resistance levels are clear, the vibes resound. The levels are clear, the confirming price action is clear, just need the trigger to show when.
Chart #1 – DAX30 weekly chart
- Break long term trend line (year to year), pullback.
- New 52-week low.
- Confluent resistance from equidistant channel shooting downwards.
- Flirting with 2016 open in the kind of one-moment-green-for-the-year, one-moment-red.
- It goes red, then trend is down, resistance is there, sentiment turns bearish.
DAX weekly chart
Chart #2 – CAC40 weekly chart
- Potential head and shoulders bearish chart pattern on a big scale.
- The right shoulder is nudged against the left which is also former 52-week high (2014).
- Price action has confirmed this level as resistance at least twice this year.
- Coincidentally or not the 2016 open level is also here which makes it a pivotal ‘green for go, red for no go’ level.
- Relative strength-wise, CAC is weaker than DAX.
CAC weekly chart
Chart #3 – AUDJPY weekly chart
- AUDJPY previously demonstrated positive correlation with Asian stock indices.
- There are 2 dynamics for this action A) JPY strengthens because of currency repatriation to Japan during crisis B) Australia is a commodity provider that fuels/rides on coat tail of China’s boom so when China/Asia falls, AUD alls.
- AUDJPY tends to fall when stock indices fall.
- Year to year, down trend with new 52-week low, equidistant channel agrees.
- “Look Ma even the arrows are the same length” – so it’s all a big retracement. Some bullish guy can only hope that this time it’s different.
AUDJPY weekly chart
Chart #4 – AUDUSD weekly chart
- Ditto AUDJPY.
AUDUSD weekly chart
Chart #5 – AUDUSD daily chart
- I can’t confirm now but this is one of very rare ’rounding top’ chart patterns. From Investopedia
A chart pattern used in technical analysis which is identified by price movements that, when graphed, form the shape of an upside down “U”. A rounding top may form at the end of an extended upward trend and indicates a reversal in the long-term price movement. The pattern can develop over several weeks, months or even years, and is considered a rare occurrence by many traders.
- The longer AUDUSD stays resisted, unable to make new high, the higher the probability that it is a rounding top chart pattern.
AUDUSD daily chart
Chart #6 – WTI weekly chart
- WTI is where I am truly confounded and don’t have a clue where it is going.
- Year to year action with new 52-week low this year says WTI trend is down although it possible that WTI is printing a reversal at the moment.
- Price is caught in a large symmetrical triangle.
- Trading is being confined and pushed towards the apex which is likely there will be a breakout soon. Up or down?
- I personally still favour the idea that WTI is still in a downtrend which I shared before here and here.
WTI weekly chart
Chart #7 – XAUUSD weekly chart
- XAUUSD has been very technical.
- New 52-week high terminated previously year to year downtrend from 2013 – 2015. At moment, price is consolidating, throwing back to test 52-week resistance turn support.
XAUUSD weekly chart
Chart #8 – XAGUSD weekly chart
- XAGUSD ditto.
XAGUSD weekly chart
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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.
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