2 hour trend now down for DOW and SP500

All up trends are still in place and the indexes are moving slightly higher and higher

The U.S. indexes are strongest and there is today and two more days to month end.
I am looking for any sort of weakness in the charts but the daily up trends are very strong so far. The European indexes big picture is much weaker than the Americans.
Here is a chart of DAX that shows weekly movements during 2011 in a special angel. DAX has fallen 23 percent from high until now.
Every black bar is one week. The trend is locked in a triangle. The trend will break out of this triangle during January I think and I do not know if the break will go on upside or downside now but I will find out before it happens. The triangle out look tells me that the break out will be powerful and set the new trend for European indexes.


Dow takes a new daily and weekly closing highs Friday

The trading was slow and sideways in New York when a very strong unexpected rally started for the last 18 minutes of the session. This sudden intervention took the Dow very close to a 5 months high and the close came in just a little bit below the high at 12.288. The coming week is often quiet but with just a few participants all chart points counts.
All long and short trends but the monthly are up and looks healthy and strong now.
If the Dow closes the year above 12.564.5 the monthly trend will turn up as well.

Remember that the the first week of the new year always is very powerful so be prepared for January 2.

Below is an article from Marketwatch.

U.S. stocks look to keep holiday rise alive - MarketWatch



DOW and SP500 open in Asia with a gap which will force Europe to jump start.

Dow closed Thursday at 12.171.8 and opened at 12.233.3 in Asia, currently holding that level. Dow's high is 12.297.9 which can easily be taken out Friday. If that happens the monthly and weekly downtrends could be changed for the DOW.

SP500 closed Thursday at 1.254.09. Jumped to 1.262.08 in Asia which is still holding. The weekly downtrend could easily be changed Friday.

Very small movements could change the six month old downtrends for these two indexes. A very exiting trading day will start in Europe at CET 09:00.


Signs Point to Economy’s Rise, but Experts See a False Dawn

European Bank in Strong Move to Loosen Credit

Analysis: 2012 could prove even wilder ride than 2011

I really recommend this article because it gives a good and easy to read background  
to what might happen 2012.


All 2 hour trends have now changed to up and the daily trends have also turned up for important indexes.

There are two groups of indexes now. DOW, SP500, SWED and IBEX have not only got the 2 hour trends changed to upward but also the daily trends have turned up today as well. These indexes could now move up to test recent tops. The strongest is still the DOW which can take a new high since it is back in the 12.000 area.

FTSE, DAX, CAC, MIB the biggest European indexes do not move much and does not seem to take the very good news from the Spanish surprisingly good result in the three and six months bills sales Tuesday and the 480 billion loans to the banks from ECB Wednesday as a reason to move much higher.

Yes the turnover in stocks slows by the day and usually the markets movements is not, according to many analysts, something to build upon when everyone is back Jan 2, 2012. Then the real trend will be set quickly. However the trends set now will be enough to keep the markets from falling during December and maybe DOW could take a new monthly high.


Outlook for week Dec 19, 2011

This is the last"real" trading week of the year. Already many participants have  finished trading and many more will leave day by day. This does not mean that the volatility will be low.
The technical picture for the strongest index DOW, shows that the monthly trend is still down, and from the opening on Monday the weekly trend will be down for the first time in three months. The close last Friday below the weekly 8 MA indicates further fall this week from the close 11.855.7. They daily trend is still down and the 2 hour trend turned down on Wall Street the last hours. The strongest resistance point for a rally on upside will be 11.929. I do not think we will see the DOW stay above the 12.000 level more for a long time. There is however  a few indicators which point to a sideways trend this week.

SP500, FTSE and DAX looks the same as DOW.

The fundamental outlook for 2012 seems grim according to many analysts. Mr Rubini says: A eurozone recession is certain, the UK is double-dipping and the US is growing at a snail's pace – fasten your seatbelts, it's going to be a bumpy year

China is also said to be in for a sharp slowdown.

If this week will be very slow with no big changes I will not comment.



What happens now with the big picture?

Technically the weekly trend is the most important for the long term trend. The drop during Monday and Tuesday and trading so far Wednesday has made the very important 8 week MA turn down for all indexes but the DOW. The week is not over until close on Friday but so far SP500 and FTSE is trading below this MA which now has become resistance points, SP500 1.237 and FTSE 5.475. The DOW which is the strongest index has been holding above its 8 months falling MA at 11.952 for a long time, but suddenly fell yesterday to close below at 11.949.6.
Today’s trading is above yesterdays close in all indexes after 90 minutes trading in Europe but below the new resistance points. Much can happen to change this situation before end of the week but once broken is always broken is my key word.
Finally the EUROS new low yesterday is very important sign for the long term picture. The currency is now technically very bearish long term.


EURO and all stock indices but FTSE and SWED take new December lows at Tuesdays close in the U.S.

All stock indexes moved up during Asia, Europe and US trading until CET 20:15 when the Fed's report was published saying no changes in policy now. DOW and SP500 fell sharply down to new December lows and closed a bit higher but still the lowest close of the month. All European indexes took new lows as well. Only SWED and FTSE held up.
The EURO took a new 11 month low on close at 1.3029. Next resistance point is 1.2907.
The 2 hour trends are down every where and I expect new lows Wednesday.

The EURO trend is still down but the bottom formation built in Asia seems strong. DOW and SP500 has also built bottoms and it will be up to Europe if this should continue.


EURO seems to give up further downside move. DOW, SP500 and DAX do the same

The EURO, DOW, SP500 and DAX behaving the same way, small movements up and down crucial breaking points.

DOW, SP500 and DAX now retesting broken supports from below

DOW last support 11.924.4 holding for first attack. Now at 11.953

The EURO close to 2011 low at 1.3145, now 1.3185. If broken big fall possible

SP500 and DAX takes new 2 days lows open up for big fall

DOW and SP500 now in 2 hour chart downtrend

EURO and DAX in 2 hour downtrend taking new lows

England FTSE daily trend turns down on opening, index start falling

France CAC daily trend turns down. Europe opens in 20 minutes

DOW and SP500 small trends down and indexes falling

First indications in Europe at CET 08:00, EURO and DAX daily trends turn down and small movements on downside starts. Trading in Asia very slow, DOW and SP500 moving sideways with 2 hour trends still up.


Euro Crisis Pits Germany and U.S. in Tactical Fight

A new critical week for the weekly trends starts Monday Dec 12

EUROPE must still figure out how to restore market confidence on the sovereign debt outlook.  The U.S. believes that the European Union crisis summit made important progress in combating the sovereign-debt crisis but more short-term money is needed to demonstrate to markets a commitment to the euro, a senior Obama administration official said Friday. It remains to be seen whether markets are going to decide that the scale and capacity of Europe's bailout funds are credible – MarketWatch

My view of the markets now

There are only a few critical weeks left to break the weekly uptrend for the DOW and the SP500.  FTSE, DAX and SWED weekly trends have now changed from up to sideways. IBEX, MIB and CAC trends are already down.
The daily trends are all up and so is the important 2 hour trend but this could change already in the beginning of the week December 12.
DOW and SP500 got above my targets for the key reversal for Friday but the margin is not big so maybe the top of the current uptrend was set Thursday for SP500 at 1.271.66 and for DOW at 12.297.9.
The overall technical picture plus the fact that the markets have had the news from Brussels to think through and the Euro and the DAX right now looks close to get a daily downtrend from Monday, tells me that the 2 hour uptrend for the stock indexes could change already on Monday. What happens in Asia will be very important for the European opening.


DOW closed as a key reversal as well.

A key reversal occurs when the daily bar in this case takes a new high but closes below the day before's low. This is a technician term for that the top of the trend most likely has been seen unless next days high gets above 61,8 percent of today's high minus low.
Short traders use to watch this second day and sell if they see it will not get over 61.8 percent.
Thursday's high was 12.298 minus low 11.963 is 335 x 61,8% = 207 plus 11.963 =
12.170. According to this theory if Dow does not get above 12.170 Friday the uptrend is over.

SP500 close at the days low 1.234.38 in a so called spike. A spike in combination with a so called key reversal make today's top very likely to be the high in this two week uptrend.

SP500 just taken new December low at 1.235.67

DOW and SP500 now in definite 2hour chart down trend.

SP500 and FTSE sellsignal and 2 hour chart downtrend

SPAIN now 2 hour trend sell signal. Italy falling sharply

SWED uptrend broken. Uptrend still holding for FTSE, SP500 and Dow

Eurozon countries, Germany, Italy and France in serious downtrend so far. Spain still support.

The Euro has three main support points. 1.3319, 1.3314.8 and 1.3236.7. Low today 1.3311.4. Now trading 1.3331.

EURO sell signal for 2 hour trend leading the indexes down

Indexes has prepared for downside and 2 hour sell signals now in place for main indexes

World central banks intervention ?

The strong rally that was perfectly programmed to Nov 30 took the Euro and many indexes from the lows into a daily uptrend which still is in place. Any trials to change even the small 2 hour trends to downside has been changed to upside when trading volume has been slow. I have seen the central bank perform in interventions since the mid 1980:s and no one of the private players don't even try to fight the central banks. There has been intervention when for instance the American FED and the Japanese BOJ have stood against each other when the yen has fallen too much against the dollar but otherwise disagreement seldom occurs to my knowledge.
Now we are playing with the Euros live or die. We live in 2011 with all the technology in the world in the hands of all central banks and the governments in the world with one goal, to avoid any sort of panic if the Brussels talk does not go well. I think that we will not see a Euro collapse, at least not this month. When it comes to the stock and bond markets I believe that there are instruments and connections that can  keep them above a certain level as well in the low turnover month of December.
There have been many Decembers since 1983 which I have watched where there have been problems and a break on down side or upside overdue - but not so serious as the current - but the first trading day of January it has started with a tremendous power down or up. What will happen now I don't know.

What I am trying to say I think is that we should not be surprised if a bad out come on Brussels does not immediately is reflected in the Euros behavior.

 America has seen the Euro rise from 0.50 to 1.60 the last 40 years and the dollar fall from 340 to 80 against the yen. U.S. cannot exist with a strong dollar against these currencies so the US will do everything to keep the dollar weak. US has tried to get the Chinese currency to be traded freely as well but China knows that they cannot beat America when it comes to trading and pushing their currency up a few hundred percentage points.
Germany's only chance to get their currency lower has been to have the Euro instead of the Deutsch mark.To share the currency with low exporting countries.

Eurozone crisis: Leaders ready for 'do-or-die' summit


US market lifted DAX and STOXX 50 on upside last hour and by doing so the sell signal in Europe disappered

STOXX 50 which is the Eurozon Blue chip index of 50 big stocks, has got a 2 hr downtrend in place and a big possibility to make a key reversal at close CET 17.30

DAX and SWED got 2 hour downtrend in place now. Other European indexes also down. Could develop trend change i all Europe indexes

Optimism is very strong before EU meeting

The EU ministers will meet Thursday and Friday. I do not know when the decision is made public but I think the old rule - buy on the rumors and sell on the news - might happen. All European indexes are in a definite bear market technically and I do not think they will rush through the falling 8 month MA:s and close there. I expect at the most a move above this curve for a while but then the uptrend will be over.
Regarding DOW and SP500 the situation is different technically and they can move higher above the falling  8 month MA but my feeling is that they will not go up to 2011 tops and they will also sell on the news. This is my feeling right now so this outcome is not written in stone. 

Germany DAX shows what can happen now

Above is the daily chart. See the blue curve, 8 MA that pushes today's bar, which just opened,maybe to new high. The target is the top of the chart where a gap is which must be closed.
Below is DAX monthly chart. One bar is one month. The small bar to the right is December so far. If DAX moves up to the top of the daily chart the Dec bar will move up to the falling 8 month MA which has crossed the horizontal curve, 21 month MA. It can get over the 8 MA if the market reacts strongly but not very much. I think a move like that would be the last high.


All index trends are still up and I expect new highs

DAX has a gap at 6.342 and FTSE a gap at 5.617 which I expect to be closed in this uptrend. There is a possibility that IBEX, MIB, SWED and CAC will test the falling 8 months MA and DOW will test the high at 12.287 and SP500 will test 1.276.

The 2 hour trend has now been up since Nov 28. I still think  that what happens during this and the coming two weeks will be crucial for the long trends which so far are down.
However since the four big: DOW, SP500, FTSE and DAX have had the last four daily closes far below the highs there are sellers in the market.

Manipulated trend again?

All European indexes are locked in a definite bear market. The last 8 days rally with new highs everyday might give the impression to many journalists that what is happening with the Euro meeting goes fine. The traders in Europe might think so as well. My own take may be odd but this is how I see it from a technical analysts perspective. All European indexes starts trading at CET 09:00. They close at 17:30. DAX, FTSE and CAC futures are trading until US close at 22:00. DOW and SP500 opens in Asia at 01:00 every morning. At that time the last few days the US indexes have moved strongly on upside so when Europe starts in the morning they start with big gaps which forces them to go higher and higher in what they think is good news. I think that the whole scenario the last three trading days is made by the big traders, that is manipulated.The rallies that has occurred in early trading in Asia looks from my perspective technically manipulated and fundamentally wrong. I have seen charts every day since 1983.

Since these rallies in the DOW and SP500 starts from a downtrend at close with a strong uptrend 3 hours later with gaps it is difficult to push away my thoughts of manipulation in the higher school. By doing so day after day these people make enormous money in Europe every day if I should be right.

However I have to analyze the trends and the fundamental facts so it is not my business who is doing what. But one day in the future some one will see why the markets sometimes move manipulated.

EURO, DOW, SP500,DAX and FTSE have just started falling back.2 hr trend down for Euro

10 reasons the crisis isn’t over Commentary: There may be a lot more bad news to come

I really recommend this story to see the true big picture.


Leaders Piece Together an Effort to Keep the Euro Intact

As crucial as this summit meeting will be for market confidence, Mrs. Merkel loves to repeat, “There is no magic wand” or “single act” to solve the euro crisis. As she told German lawmakers last week, “It is a long process, and that process will take years.”

This says it all. Will the market get confidence in the euro now this Friday. I don't think so.

Here is the whole story from New York Times:

World Stocks Up as Crucial Euro Zone Week Kicks Off


The Euro has started the trading week

EURO daily, one bar is one day.
This is the first market to open the week. That happens on Sundays CET 19:00 and stops Fridays at 23:00. During the whole week it is trading 24 hours per day. Some Sunday evenings it can make a powerful start run immediately for hours, Sometimes it is hardly moving. After one hour trading it has tested the 8 MA - the blue lowest curve - which turned on upside now, for Monday. So far buyers are in at that point. If this small uptick in the 8 MA will hold, it will get higher by the day the whole week. The resistance will be the falling 21 MA - second curve from below. which will fall at least until Wednesday. A sudden powerful rally could go all the way up to the 34 MA - the highest of the curves - but there it will be stopped this week. The 2 hr trend is down so there will not be a quick rally on upside, if that should happen. A powerful break below the 8 MA tells me that SP500 will open down at CET 01:00 in Asia.

Comparison of the U.S. and European stock indexes.

This is SP500 from 2007 until today. I often talk about waves. I believe you all know how to count waves. From the bottom of the curve Jan 2009 to the top April 2011 there are three big waves. The first wave have five smaller waves then the correction down in three waves. From that bottom there are again five smaller waves and finally a three wave extension that tells you that the big uptrend is over. Then you see a big head and shoulder formation above the line and a break of the neckline which takes us to the low in August.  Then three waves uptrend and fall but not below the low  so the market goes up to recent top Oct 24 and makes a three waves correction down Nov 21 and after that comes last weeks rally. My immediate feeling is that this trend will go up to resent top. However other tools tells me that will not be the case.

Above is England's FTSE and to the left Germany's DAX. Nearly the same pictures. These three markets will react the same next week and the next several years. If you know how one of them reacts in the big picture you know how the stock markets react in Europe and in the U.S. Since SP500 futures trades last and starts 8 hour earlier in the day I follow that one only. Do you think the DAX chart now will take a new chart high. No way. Then the SP500 will not either. If you think the SP500 will start a new bull market now then you also believe that Germany will. When I view the DAX my immediate reaction is that when the current uptrend ends, which will happen soon,  it will go down to the low of the chart.


The next few weeks will be extremely crucial for the big trends.

All stock indexes rallied the whole week on the Central banks news to keep liquidity in dollars. The last three days  the closes where the same, DOW 12.010, SP500 1.244, FTSE 5.515 and DAX 6.048. It is very seldom you see three days close at the same points. The rally has brought the indexes in position to technically either let the Weekly 8 MA cross the falling 34 MA within the next three weeks and eventually start a long term uptrend. It is important to remember that the Daily 8 MA will move up until late next week and slowly lifting the floor day by day to stop eventual drops. I said several month ago that we should see the signs in mid December where this trend is going. I like this complicity and I am sure we will find he right trend unless intervention occurs.
The only indexes which have a possibility technically to do this are the strongest indexes, DOW, SP500, FTSE and DAX. The 2 hour charts are close to a sell signal for all these indexes but the trends are so far still up.

The EURO has not rallied at all and finished the week at 1.3400 just 150 point higher than last week. The Euro will therefore on Monday directly see the 8 week MA turn down before crossing the 21 week falling MA, which is a bearish technical sign. However there is a possibility that the Central banks are guarding the Euro against a new bottom.

All the good and bad news this week has now been priced in. We even know what the likely outcome of the Euro minister's meeting on Dec 9 will be. I cannot find any more good news to look forward to right now. Instead traders will ask themselves if Spain and Italy now can pay their debt and other important questions about what really happened. The short covering rally cannot get any further strong  help from now on because the majority of shorts have been covered and so have the gaps.

The EURO is taking new daily lows. DAX and FTSE small trends still down.

German DAX and English FTSE are taken new daily lows.

All indexes took weekly highs on Europe opening and has now moved to very strong resistance points.

Watch up for US new payrolls expected to be plus 125.000. A lower number could set off a very strong reaction on down side. The non farm payrolls numbers will come at CET 14:30. Since the indexes technically have only a few points left in Europe a low number could change the upward trend.


Money Flows, but What Euro Zone Lacks Is Glue

ECB's Mario Draghi warns of increased 'downside risks'

Indexes are topping out.

The European indexes closed yesterday just below the falling 8 month MA. They all are in definite bear markets and the upside potential is very limited. This MA will fall another four months and it is seldom the trend is above this MA so I look upon it as a wall. The 2 hour 8 MA has a few more hours to go before it can turn down in Europe, that is of course if no more highs are taken. But remember the daily trend is now up and it can go on for five trading days. That is the 8 day MA which is rising from a very low point and it will take time to reach up to the trend.

The U.S. indexes have not got the falling monthly 8 MA to cross the rising 21 MA. The falling MA seems to continue for at least 4 months and DOW is currently above this MA where I do not expect it to be very long. DOW and SP500 both closed below the MA but this morning it has fallen due to a new month but DOW does not seem to react so far.

The bear markets are still very well in place and now I am looking to Fridays close of the weekly chart.

When this trend turns down the target is to close the gaps at the bottom. All gaps on the upside are now closed.

This is my first take after 90 minutes trade in Europe. I want to see that no index is taken a new high the next 6 hours.

I recommend no action, just stay and wait.

Central banks unexpected dollar news sent the markets into a tremendous short covering rally

SP500 closed Wednesday on high at 1.245.55 and the 2 hr chart trend is still very strongly up for all indexes. The daily trends have now turned up. The news were planned to take place on the last day of November resulting in unusual high  monthly closes which however does not effect this big downtrend trend since no close got over the falling 8 MA:s. The weekly downtrends are so far not in danger. After close next Friday I will examine if the big trends have been damaged technically.

Just now it is just to wait and see how strong this trend is and how high it will go.

The Euro closed the month at 1.3445 and hereby stopped the monthly 5 wave trend to develop on downside. However the 8 months MA now at 1.3974 will continue to fall at least in to April. This bear market will be very difficult to change.