Wednesday, May 28, 2014

Reversal in Nikkei looming

Interesting pattern on Nikkei225.

After a mighty impulsive wave 3 up, Nikkei index ended wave 4 in a typical triangle.
While wave 5 is obviously in an ending diagonal, pointing to a major reversal from uptrend to downtrend.
The ending diagonal (or wedge) usually predicts a reversal of trend.

within the ending diagonal, all waves have completed, at currently is at the end of wave e, the final wave in the diagonal.  Potentially, there will be a start of a downtrend from this point onwards.


Compared to other global indices (e.g. S&P500, DAX and Footsie), Nikkei is bearish.
the other indices are still maintaining strong uptrend patterns, in particular S&P500.

Other Asian indices like Singapore index is strong, while Hang Seng Index is haphazard without a particular direction.

So, is funds leaving Asia to US and Europe?

Seems likely.

APOLLO Education (APOL:NYSE) likely to continue downtrend

Technically, APOL price chart shows a prior clear down trend which had finished wave 4, then continued with wave 5 in an ending diagonal of 3 waves a-b-c.  Wave c in the diagonal ended in a mini-triangle.

Following wave 5, a zig-zag correction in waves a-b-c with wave c showing patterns of a triple top.

Combining wave C tail and a triple top can mean a strong resumption of the prior trend, that is downtrend.

The ending diagonal in wave 5 actually signalled a reversal of trend, to uptrend.
However, the subsequent zig-zag and a an obvious c-wave with triple tops most likely signal the end of the correction and mostly likely will lead to the continuation of the previous downtrend.


Gold breaks triangle and continues down trend

I will start off with the-awaited break of ending triangle.

The triangle is shown in the daily Gold chart below towards the right.


















From a larger perspective, and based on wave counts, the downtrend of gold had reached wave 4, and is now undergoing a large ending diagonal in Wave 5, the final wave in this downtrend.

Within the diagonal, waves a-b-c-d are completed, and now undergoing the final wave e of this diagonal.

The triangle is within wave e.

What this means in the short term is that the downtrend may continue strongly to the support line of a-c.
In the longer term, and technically, Gold is expected to reverse trend to uptrend as soon as support line a-c is reached.

Stocks related to Gold mining are also trading at years' lows - e.g. AUY. ABX.

Introduction

This is where I will post interesting charts of stocks, currencies and commodities.


It will serve as my own records and also if readers appreciate it, could be educational as well as helpful to inform readers about where prices are heading.


Mostly based on Elliot wave counts and basic chart patterns.