New year started with strong equity market performance especially for the U.S. indices. Gap openings in most of the indices were followed by consolidations. Gaps were filled in the past one week and the indices tested their support levels. It is clear from the charts that last one week’s contracting ranges accumulated some energy that will be […]
It is always easier to call for a market action after it takes place. This is called hindsight bias. Technical analysts look at several charts per day/week, go through different markets, time frames and analyze vast amount of data. While looking back at a chart pattern it can appear so predictable that we often ask ourselves how we missed that move. […]
Strength in U.S. dollar continued this week with the dollar index moving away from 80 levels, an important technical support level. Bullish outlook remains intact with the index possibly breaking out of a 2 year-long inverted H&S pattern (neckline: 80 levels). In the past, bullish/bearish crossovers of the long-term moving averages worked well and to support […]
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 […]
