And so it goes on, stimulus hopes keep it up, reality drops it down and we continue to bounce in this no mans land between 5820 and 5860. The market is basically in a wait and see mode with no one willing to commit anything at the moment, hence the low volumes. Market confidence is low, the reality is that there is more pain to come, but should those concerns ease and the stimulus be larger than expected (when/if it comes) then there could be some more upside. I am still fairly bearish myself, however, I might revise my plan and instead of 5850 being the topping area, move it up to 5890-5950. I am usually 100 points out whenever I try and pick long term tops and bottoms so that would make sense!! (Humble mode!). I am changing that plan following Merkel’s remarks that Germany will work with the ECB to aid Greece, Spain, Italy, Portugal etc. etc.! Also, the daily chart is still bullish, with support being found at the 10ema on each test. Thought test it has and I am sure that it will break soon.
Emerging-market stocks fell, with the benchmark index poised for its first weekly decline in five, as concern about slowing earnings growth countered signs the U.S. economy is improving.
Japanese stocks rose, with the Nikkei 225 Stock Average capping a second week of advance, after U.S. building permits reached a four-year high and German Chancellor Angela Merkel reiterated her commitment to working with the European Central Bank.
The MSCI Emerging Markets Index lost 0.2 percent to 974.28 as of 1:39 p.m. in Singapore, extending the weekly slide to 0.5 percent. South Korea’s Kospi index sank 0.6 percent, the most among Asian benchmark gauges, dragged by a slump in Samsung Electronics. Gauges tracking telecommunications services and technology companies were the biggest decliners in the developing-nations gauge.
The bottom line is that we can’t argue with the fact that we are still in a bullish uptrend, and have not had decent confirmed bear signals as yet. I do think still though that we are topping out and that the stimulus measure when/if they are announced will see some declines. Looking at the Bianca chart we had support off the bottom of the 10 day and that channel is getting narrower – the top is 5890 so we should see resistance around there. We have had 5910 mentioned a few times as well as a possible top based on another daily channel. Today’s pivot is 5830 so that could act as a support area for longs. Today will probably be another low volume drift about day, especially as its Friday. I have plotted the blue arrows based on that – a dip to the pivot (and the 5820 area that is acting as such great support) and then a climb back again. Fairly obvious probably but the markets are being quite fickle at the moment – they do like to keep one guessing. The drop down to 5830 would also be a “gap close” to yesterday’s closing price. I haven’t added to any longer term shorts as yet but will look to do that in that 5890-5950 region now (slightly increased from the area I was looking at yesterday). Ideally we will get a 10ema break on the daily to confirm that the worm is turning to bear.