Friday, June 14, 2013
NIKK Tokyo Nikkei Weekly and Daily Charts Bear Market Downward-Sloping Channel Fibonacci Retracements
The blue dot on the daily chart shows the Nikkei closing price a few hours ago at 12.7K bouncing a couple percent in the overnight session. The Nikkei topped at 16K and a -20% drop off the top is -3200 points, so 12.8K and lower identifies a bear market for the Nikkei. The drastic -6.3% drop identifies 12.45K as a key support level moving forward. Note that price came down to fill the gap from early April and then recovered, only to fail through this level again, and now closes at the gap from two months ago at 12.7K. The red downward-sloping channel remains in play with price resting for the weekend before deciding to either jump up above the channel, or tumble lower to continue honoring the channel and print lower lows and lower highs. The green falling wedge is in play and price is parked at the top rail of this wedge as well. The apex of the falling wedge points to a test of the important 12.0K support level, obviously a whole-number psychological level as well. The positive divergence in the histogram, stochastics and ROC provided the overnight bounce, however, the RSI and MACD line are less enthusiastic and prefer to see lower lows in price. The RSI never reached oversold territory either. Price will also want to test the 200-day MA at 10996 some point forward. The question is will it be next week or a few weeks or months from now? The 20-day MA is about to stab down through the 50-day MA which is a bearish signal.
The weekly chart is sick. The red lines show the negative divergence spank down and the indicators remain weak and bleak across the board. This hints that even though price is recovering with a bounce, the weekly chart wants to see lower lows. The Fibonacci retracements for the big rally from 8.5K to 16K are 13K (38% Fib), 12.0-12.1K (50% Fib) and 11.2K (62% Fib). Price bounced off the support at 12400-12500, between the Fib's. Typically, price should want to look at the 50% Fib at 12K since the 38% Fib was violated. The daily chart identifies a range between 12.0K and 13.5K so price may want to move higher to test the 13.5K resistance, but, overall, using the weekly chart as a guide, any bounce, or move higher, should reverse again in the coming days or week or two. So a short the bounce approach may be best perhaps looking at 12.7K-13.5K as an entry area for the short side. Weaker yen = dollar/yen up = Nikkei up = stocks up. Stronger yen = dollar/yen down = Nikkei down = stocks down. The dollar/yen is around 95.0-95.10 this morning so use this as the pivot to gauge market direction. Current print is 94.96, hence, the S&P futures are flat to a touch weak. The BOJ and Fed are at the controls of this central banker-driven market. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 12:30 PM: The dollar/yen collapses to 94.14 (stronger yen) so equities sell off today. It is that simple. The central bankers control the markets.