Weekly:
- Ichimoku setup is back to neutral
- The long term wide bearish channel is still active. Price got close to trendline (act. at 3125)
- Heikin-Ashi signal is swing bullish.
- MACD is counter bullish, as both the convergence line and signal line are below zero.
- 3095-3150 is a strong support/resistance zone, marked by trendline, Kumo (forward Senkou B) and 100wma
- EWO is neutral too. (ticks to green, but it did the same in November 2015)
Daily:
- Previous idea of possible small Head and Shoulders top did not work. Ichimoku setup is still bullish
- However we have warning signals too, which suggest the risk/reward and P/L upside of long positions from this point may be limited:
1. possible bearish wedge formation
2. Heikin-Ashi signals some exhaustion at 3095, lower level of resistance zone. Candles shrink, haDelta crosse down, today haOscillator crossed down as well
3. haOscillator also has some negative divergence compared to price action (price higher high vs haOscillator lower high)
4. EWO is bullish, but could not post a higher high, despite price moved above previous local high. For those who like wave counts, this suggest that the 5th Elliot wave is done, or will soon be done.
5. Volatility is extremely low. Looking at ATR (14, SMA), its value is stuck below 50 points.
I don't say we have a massive sell signal to go short in big. What I say is that at this level, and in the zone above Bulls will have hard time to push further up. This is not time to buy. Rather time to reduce exposure and take profit on longs.
Something else:
Market has just fallen in love with the idea of further ECB easing. Bond mkt prices another rate cut and announcement of more QE and QE extension. In fact this is something, which the EU Bank index(es) would hate at the maximum. ECB policy is completely killing banking business, if not puts the whole financial system to a huge risk of collapse! Guess what, STOXX50 is not the DAX! This index has more bank weight. What's more, it contains Spanish and Italian stocks. Do you read the news about Italy? Well, I would not be very comfortable to hold and exposure there (neither in S-Pain ;-) ) for the rest of 2016.
- Ichimoku setup is back to neutral
- The long term wide bearish channel is still active. Price got close to trendline (act. at 3125)
- Heikin-Ashi signal is swing bullish.
- MACD is counter bullish, as both the convergence line and signal line are below zero.
- 3095-3150 is a strong support/resistance zone, marked by trendline, Kumo (forward Senkou B) and 100wma
- EWO is neutral too. (ticks to green, but it did the same in November 2015)
Daily:
- Previous idea of possible small Head and Shoulders top did not work. Ichimoku setup is still bullish
- However we have warning signals too, which suggest the risk/reward and P/L upside of long positions from this point may be limited:
1. possible bearish wedge formation
2. Heikin-Ashi signals some exhaustion at 3095, lower level of resistance zone. Candles shrink, haDelta crosse down, today haOscillator crossed down as well
3. haOscillator also has some negative divergence compared to price action (price higher high vs haOscillator lower high)
4. EWO is bullish, but could not post a higher high, despite price moved above previous local high. For those who like wave counts, this suggest that the 5th Elliot wave is done, or will soon be done.
5. Volatility is extremely low. Looking at ATR (14, SMA), its value is stuck below 50 points.
I don't say we have a massive sell signal to go short in big. What I say is that at this level, and in the zone above Bulls will have hard time to push further up. This is not time to buy. Rather time to reduce exposure and take profit on longs.
Something else:
Market has just fallen in love with the idea of further ECB easing. Bond mkt prices another rate cut and announcement of more QE and QE extension. In fact this is something, which the EU Bank index(es) would hate at the maximum. ECB policy is completely killing banking business, if not puts the whole financial system to a huge risk of collapse! Guess what, STOXX50 is not the DAX! This index has more bank weight. What's more, it contains Spanish and Italian stocks. Do you read the news about Italy? Well, I would not be very comfortable to hold and exposure there (neither in S-Pain ;-) ) for the rest of 2016.
