Germany, Dow, Australia, Nasdaq and HK status update 10-22-2012

Germany is still in the spiral of temptation to breakout above its 5 yr downtrend lines. It has been a month already hovering around the resistance levels. We also had a warning signal on its weekly charts, activating a warning of RSI > 70, the 1^st time to get into this level for 2012, last was Q1 2011 where quick selloff happened after the incident.

Watch for more price action, either:

   Breakout above 7400

   Selloff back to 7000,then 6600.

S&P made a new 52 week high last Mid September, and a warning of RSI >70 popped up also,for the daily charts. After hitting that high, S&P went to a sideways to down pattern on hourly charts, but is still in uptrend for Short Term with support at 1430.

Elliot Wave count suggests that the 52 week high could be a the end of Major Wave 3 of Primary Wave III, or just a minor wave 1 of the current Major Wave 3 of Primary Wave III rally. Both ways suggest a result of correction, that might ended already at 1433, or will continue to correct further if it goes down below 1430.

Short Term: Uptrend, but threating a breakdown. A BUY when S&P revisits 1380 levels. Wait for more price actions.

Medium-Long Term: Uptrend

Hong Kong rallied the most in Asia with 16% since June. And still could be the underperforming market together with China(-20% for 2012) all over the Globe. HangSeng revisited its 2012 high at 21500-22000, and has a barricade of strong resistance levels in that area. If it can break through with the 2012 highs, it can reach 22800 for the medium term downtrend resistance. RSI now at 75, overbought level.

Short Term: Uptrend but overheating

Long Term: Sideways

NASDAQ showing symptoms that more selloffs could be coming, NASDAQ recently sold off too much that it broke down its short-medium term uptrend line, that could lead to 2950 initial support.

Australia had its best rally since 2010. Gaining 12% in 4 months time. And the very first time to reach an overbought RSI at 76 since 2010. There are many resistance levels on 4600,4650,4700,4750 before it can revisit 5000 level(2011 highs). The negative MACD Divergence is telling that short term may be it,and correction is coming.

Short Term: Uptrend but overheating

Long Term: Sideways

DOW, S&P, Germany, forecast 10-11-2012

This 4 month rally in the U.S. has already brought 16% gains. An unexpected strength since the 11% correction happened last April and May. We also notified that Germany and other European indices are the ones leading the rally. But 2 weeks ago, U.S. and Europe somewhat departed their ways, U.S. led to new fresh highs, and Germany(Europe) did not, instead corrected below when hitting their 5yr downtrend resistances.

Currently, we will just focus on the U.S., and short term, uptrend is still intact, but gaining momentum on the downside. The 4 month rally has been so strong that we haven’t had a correction of more than 5%. I think, now is the time we might expect this to happen.

Looking on the uptrend line of the DOW, it was pretty straightforward of a typical bull run, huge rally then small selloff to warm the RSI and MACD. But looking into Elliot Wave count, we might had the Minor I of Major Wave 3 of Primary Wave III Bull Market, or possibly Major Wave 3 of Primary Wave III Bull Market. Which takes into consideration that, after a Minor I or Major Wave 3, a pullback of 4-12% is normally in range, and with this steep uptrend, an estimate of breaking down into this short term uptrend,will make the economy more healthy. You know what I mean-you cant take them all in 1 rally.

If market breaks down, we expect DOW to hold support near 12900, and suggest to slowly buy into the market, as Europe GDP isn’t good still.

Europe Q2 GDP is nearing its release, and a continued contraction could easily bring DAX down to 6600 levels. First uptrend support of Germany is at 7000. I am still putting a HOLD/LIGHTEN strategy to any European Index, until a viable growth is seen. And wait till a good correction from their 25% rally since June.

U.S.

Short Term: Uptrend, but weakening. Negative Divergence on MACD and RSI. NASDAQ in downtrend.

Medium TerM: Uptrend line support now at 12800.

Long Term: Uptrend. Uptrend line since 2009 has a support now at 12500.

Germany,FTSe,CAC, Dow, HK, CHINA,KOREA, AU, WTIC 10-2-2012

The three major European indices are still tempting to get through their 5 yr downtrend resistances. Charts attached are showing that FTSE and Germany hit their 5 yr resistances and quick selloff from it. They are moving inch by inch higher,nearing to those levels, and may be tempting again to break through these 5yr levels. I am betting that they are not going to break out soon, due to deteriorating Economic Indicators.

Germany,FTSE:

Short Term: Uptrend, Attempting to get into 52week highs.

Medium Term: Sideways

Long Term: Downtrend, 5yr resistance intact

Meanwhile, US indices are in a strong phase, S&P and Dow companies are meeting earnings expectation, and economy is growing in a small but steady positive way. U.S. markets broke out of their 52 week highs and met 13653 for the DOW.

Elliot Wave Count suggest also that a final minor wave v could be happening quick soon, or may have happened when we got 13653,and is due for minor to medium type correction soon to form Major Wave 3 of Primary Wave III Bull Market. Europe is to decide, if Germany and FTSE broke out of its 5yr downtrend resistances, we are set to revisit DOW,NASDAQ and S&P’a All Time High.