In technical analysis, divergence is considered either positive or negative, both of which are signals of major shifts in the direction of the price. Negative divergence occurs when the price of the security makes a new high, but the indicator fails to do the same and instead closes lower than the previous high. US 10 Year T-Notes […]
If someone wants to start learning technical analysis, the first chapter should be chart patterns and the first chart pattern should be symmetrical triangles. Just seeing how the price bounces from one trend line to another would be enough to be amazed by the strength of this discipline. Imagine two converging trend lines and price consistently […]
It is true that Europe has debt problem, it is true that most of the major economies in Europe still have very high yields and it is true that Euro has weakened against major currencies. From all aspects Europe is the weakest link. The daily chart of Euro Stoxx 50 suggests positive technical action at least […]
If price is above the 200 day moving average and the RSI is above 50, then it is better to have a bullish bias while analyzing a chart. 200 day moving average is the industry standard. Which ever method you use to calculate, simple, weighted or exponential it is a road map for me. With […]
While analyzing charts I try not to look for any reasoning behind the chart pattern and demand & supply relationship. I trust that the market knows what it is doing and the underlying reasoning so I follow the technical signals on the price chart. Light Crude Oil is another chart that I analyzed with the same discipline but closely in the past 5 […]
Though it hasn’t been a great year for equities and especially for European equities can 2012 start with a positive performance for Europe? In the past two months DAX formed a consolidation range (symmetrical triangle) below its 200-day moving average. We are likely to see a breakout from the short/intermediate term consolidation range in the beginning of 2012. A […]
U.S. dollar gained strength against major currencies in the last quarter of 2011. Will the strong performance of U.S. dollar continue in 2012? USD/CAD chart warns of a possible breakout in the beginning of 2012. 3 month-long symmetrical triangle shows consolidation of the currency pair but suggests a breakout is imminent. Given that the trend prior to […]
Source: S&P/Case-Shiller The S&P/Case-Shiller home price index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S. The composite indexes and the regional indexes are seen by the markets as measuring changes in existing home prices and are based on single-family home re-sales. The key composite series tracked […]
While U.S. markets are showing relative strength versus Emerging Markets and Euro Zone, we are seeing different performances between the euro zone economies. Back door QE by the European Central Bank helped Spain and France but Portugal, Italy and Greece 10 Year Govt. yields are still at elevated levels. Germany having the best technical outlook is […]
“Risk OFF” or “Risk ON” ? Is this a bear market or a bull market? Are we in a recession or not? Are we headed for a double-dip or not? When opinions are too divided like this and everyday people have a tendency to change their market outlook from negative to positive and vice versa, it is called a corrective period. During […]
