This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Major Support & Resistance (pivot points – explained):
Pivot: 6465; Support: 6417, 6389, 6342; Resistance: 6493, 6540, 6569
There’s a lot riding on a round number and a 200-day moving average around 6400 – the bulls wanting to see it hold and the bears that wanting a breach and the weakness to continue. So far we’ve had a 4.7% decline from recent highs which is a fair correction, but recent Fed taper fears are running the show, keeping pressure on what had been largely improving global recovery sentiment.
Remember we have come from as low as 6,000 at end-June and still remain in a long-term 4yr uptrend with rising support around 6,100. As they say, like your home town, if that’s where you’ve come from, you can always go back. In addition, since the breakdown from the bearish rising wedge pattern (blue lines) the losses of 190pts easily exceed the 125pts fall going into the pattern from the August high – a nice reminder that projected moves from patterns should be minimum expectations.
The breakdown below 6430 and the trendline of falling lows indicates an acceleration in the downtrend on account of the market pricing in a move by the Fed next month to reduce its extraordinary stimulus (QE3), something which has rattled both developed and emerging markets worldwide. All eyes on FOMC minutes tomorrow for more clues (and highly likely more confusion) on the eventual timing.
On the topic of right vs. wrong, even If I still believe tapering will ultimately be later (debt ceiling issue impacting consumer confidence, macro data still not good enough) with Fed chatter uncertainty designed to keep a lid on markets which would otherwise get too excited on any explicit timing/metrics – it doesn’t really matter what I think. What matters is what the markets think and what they are doing. Remember not to get emotionally attached to a positions or opinions. Its winners that make money, not whiners.
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
Solid Green line
Possible support
Solid Red line
Possible resistance
Important: The information provided above does not constitute advice or opinion and must only be regarded as technical observations.
Click here for help with Support & Resistance Click here for help with technicals
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