Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

A slew of economic releases with mixed results kept risk sentiment at bay overnight with industrial stocks on Wall Street falling back while European bourses tread water. The USD lost ground against the majors, with the Kiwi boosted to a two year high while gold stabilised, oil prices continued to spike and Bitcoin breached the $19000 barrier but fell back again. Tonight’s session is likely to be similar with the US on Thanksgiving (aka super spreading)

Looking at share markets in Asia from yesterday’s session where the Shanghai Composite fell fast going into the close, down 1.2% to 3365 points while in Hong Kong the Hang Seng Index its still a case of treading water with a minor lift of 0.2% to 26648 points.  The daily chart shows a spike above the previous highs that wasn’t filled and momentum still in overbought mode as resistance at the 26800 point level the key area to beat:

Japanese stock markets continue to surge higher however with the Nikkei 225 up 0.5% to 26296 points. Futures are suggesting a flat open this morning however, but I’m still watching the 25300 point zone to continue to firm as support in this very overextended market:

The ASX200 had yet another very solid day, this time up 0.6% to the 6683 point level. SPI futures are also flat with hesitation building going into the truncated end to the week due to the US thanksgiving with this breakout continuing although a deceleration pattern is emerging:

European markets were relatively quiet with minor moves higher or scratch sessions, the German DAX putting in the latter to basically finish unchanged at 13289 points. This market remains stalled at the September highs nearer 13300 points although short term price action is building for a potential breakout, the rise in Euro may thwart further upside moves:

Wall Street slipped up last night with only tech stocks advancing, as the Dow retreated nearly 0.6% from its all time high while the S&P500 finished 0.1% lower at 3629 points. The four hourly chart is not broadcasting all guns blazing here as it still shows a market wanting to break higher but pulling back to previous weekly highs:

The NASDAQ was the only one with gains, rising 0.4% to 12094 points with the pattern on the daily chart moving away from its previous bearish setup as price action looks set to clear the downtrend from the August bubble like highs (upper black sloping line) and get above the October nominal highs:

Bitcoin’s bubble continues to expand but at a lesser pace with a break above the $19000 level brought back below overnight. The four hourly chart has a potential double top pattern forming but without a proper breach of the low moving average, let alone trailing ATR support way below at the $17900 level there’s no real problem – yet:

Currency markets continue to firm against USD which has weakened since the start of week shake out. Euro this time stuck its little peak abvoe the 1.19 handle, putting in a new weekly high and getting nicely overbought. The medium term pattern remains slightly bearish but could flip if this holds going into the weekend:

The USDJPY pair held back a little on the weaker USD meme and remained at the mid 104 level overnight. My idea of more upside here is still dependent on more positive risk sentiment, so watch for more session highs on the four hourly chart if stocks pick up again:

The Australian dollar is now pushing higher, building above the 73 handle and making a new weekly high to finish last night’s session if a very good place.  Four hourly ATR support and price action at the low moving average is holding here with the latter a good uncle point going into the weekend:

Oil prices are now well into a blowoff stage after pushing aside resistance at the September/October points of control, with Brent up more than 1% to finish just below the $49USD per barrel level. This is an obviously unsustainable move on technicals alone, wiping out all the short positions but is way overextended and ripe for a violent reversal:

Gold remains in a precarious state with the shiny metal still well below key daily and weekly support levels as it stabilises just above the $1800USD per ounce level overnight. The previous large breakout level at $1750 from mid-year is still the next target below:

 

Glossary of Acronyms and Technical Analysis Terms:

ATR: Average True Range – measures the degree of price volatility averaged over a time period

ATR Support/Resistance: a ratcheting mechanism that follows price below/above a trend, that if breached shows above average volatility

CCI:  Commodity Channel Index: a momentum reading that calculates current price away from the statistical mean or “typical” price to indicate overbought (far above the mean) or oversold (far below the mean)

Low/High Moving Average: rolling mean of prices in this case, the low and high for the day/hour which creates a band around the actual price movement

FOMC: Federal Open Market Committee, monthly meeting of Federal Reserve regarding monetary policy (setting interest rates)

DOE: US Department of Energy 

Uncle Point: or stop loss point, a level at which you’ve clearly been wrong on your position, so cry uncle and get out!

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