Charts I’m Watching: May 1, 2014

Quick look at the Nikkei…the channels and moving averages continue to argue for a downturn and follow through on the H&S patterns.  But, note that the BOJ has continually defended the neckline.

2014-05-01-NKD daily 0620It has run sideways for so long that the SMA10 is testing the SMA20.  But, again, the harmonics suggest at least a modest downturn — if only to test the neckline again.  Watch out if NKD fails at the moving averages — the expected outcome IMHO.

2014-05-01-NKD daily CU 0620USDJPY shows a likely backtest of the rising white channel within the confines of the falling purple channel — a bearish setup for stocks.  Note that it’s also trying to push above the SMA20, having plunged below the 10, 20 and 50 yesterday.

After the BOJ balked at amping up QQE in the face of obviously weaker economic signals, we can hardly expect market forces to push the pair higher.  Given the growing inflation problems for consumers, I imagine the BOJ will be content to let the yen remain in a trading range if not actually appreciate a little.

2014-05-01-USDJPY 15 min 0634And, ES is stalling after completing a Bat Pattern within the larger Bat Pattern.  Two .886 retraces in a row could be trouble — but only if the white midline and white channel bottom are broken.  Note the sloppy IH&S Pattern in red.  It’s a mess, but in this “market” where only bullish patterns play out, who would be surprised?

2014-05-01-ES 30 0625UPDATE:  11:30 AM

SPX is about to tag its .886, completing the Bat Pattern off its highs.

2014-05-01-SPX 5 min 0832USDJPY didn’t make new highs, but pushed slightly above its SMA20 to complete a .886 retrace of this morning’s drop.

2014-05-01-USDJPY 5 min 0832

Comments are closed.