updated on 01-MAR-2020
Dow Jones Industrial Average
The index was not able to hold above the 26700, an important level mentioned in the past few months, which suggest that the current uptrend is at risk. Moreover, this month's (February) price action made some technical damage, especially the bearish divergence seen on the RSI as well as the MACD.
All is not negative (yet...). If December 2018 is of any guide, that monthly candle also looked like it would derail the uptrend, which it did not. This past week move has been extreme and a bounce is to be expected. The next few weeks are going to be very important, the strength of the bounce (if any?) will dictate if this month's selling was just a dip on the uptrend (a la December 2018) or if there is really troubles ahead for this index and the stock market in general.
This month's bearish price action on the Nasdaq was much less damaging than on the other indices as it not only held above its Fibonacci extension level (mentioned in the past and below) but also held above its long-term moving averages. The MACD is still bullish form the cross in October 2019 but now converging. This RSI is making a bearish divergence but would only be a consequence if (when?) the RSI crosses below its 50 level. As long as the Nasdaq 100 is trading above 7300, which is the 1.618 Fibonacci extension of the 2000 to 2002 decline, as well as above the ascending trendline, the primary trend is up.
The expected pullback mentioned last month happened, although to a much greater extent than thought, as the index broke its 3047 support level on a monthly closing basis. The index was still able to close above its slower moving average (black). The S&P500 is in the same camp as the DJIA, where one will need to focus on the strength and levels of the upcoming bounce.
The MACD bullish cross has been negated and the index is now testing its 8 years uptrend line. The RSI is coming close to its 42 level, an area where a reversal always took place in the past decade. The idea is not to anticipate the price action but to follow it and react to it. If the index were to break that trendline, the next level of support is 1292.
Dow Jones Transportation Average
The index broke down its uptrend line but was able to bounce off its support area (orange zone) for now... The MACD is bearish but the RSI is near its support level around 41. The next few weeks are going to be critical for the Transportation index.
As mentioned last month "the Semiconductor Index has created a bearish monthly candle and a pullback is thus a probability. As long as the support around 1700 holds on a monthly closing basis, the major trend remains to the upside." The monthly closing price was 1705! If that level breaks, the next support area is 1465. The monthly candle show uncertainty from the market participants and therefore we must remain open to all outcomes and ready for increased volatility.
Australia - S&P/ASX200
The ASX200 index made a false breakout to all time highs. Support can be found at 6373 followed by 6000, which not only represents a psychological level but also the uptrend line in place since the 1988 lows!
China - Shanghai Composite
While the price action has not been very constructive lately, the index was able to bounce off its uptrend line.
The price remains in the middle of a wide range, with 3400 as resistance and 2225 as support.
Hong Kong - Hang Seng Index
The index is still unable to break above its downtrend resistance line. MACD is currently bearish while the RSI is neutral. The 24000 area remains a major support level.
Japan - Nikkei 225
The 24200 overhead supply held, which sent the price back to its support area (orange zone). The MACD bullish cross has also been negated.
More consolidation is to be expected.
New Zealand - S&P/NZX50
The NZX50 index was not immune to last week's large sell-off. The price is still trading above its moving averages and above 10580 (Fibonacci's 4.236 extension level). This NZX50 remains (one of) the most resilient index out there, definitely not an excuse to become complacent.
Singapore - Straits Times Index
The index is in a trading range until it can break through its overhead supply around 3450. Long term support lies around 2580.
South Korea - Kospi
The index is currently held below its resistance around 2210.
A sideways range remains until the overhead supply can be absorbed. Support lies around 1890, if it breaks, next level of support can be found around 1750.
Taiwan - Taiex
Last month's expected pullback happened and the monthly close (11292) was just above the 11270 support level. The MACD is still converging and the RSI created a bearish divergence with the price. If the aforementioned support level break, the next price area would be around the 10000 psychological level (orange zone).
Euro Stoxx 50
The 3833 area remains a major overhead supply and pushed the index back into its symmetrical triangle. The price remains in a range with support around 3100 and 2885.
Germany - DAX
Last month was mentioned that "After the price briefly broke out of its all time highs, the price made a u-turn to create a shooting star pattern. The RSI did not confirm this all time high and the MACD is converging. A pullback to the support level around the 11860 area is a probability for the weeks ahead."
The monthly closing price was 11863.
The next few weeks will dictate if the price can bounce from this support level (less likely scenario with the deterioration of both the RSI and the MACD) or if that level breaks and the index heads lower.
UK - FTSE 100
The index was not able to hold above the 7100 area on a closing basis, and broke the longer term uptrend that was in place. If the 6500 level breaks, the price could head towards 5785. 7100 turns into resistance.
Swiss Market Index
Last month was mentioned that "The index monthly low was just above its 10530 support level. A pullback looks likely even though the major trend remains to the upside with a target towards the Fibonacci extension level near 12000."
Here as well, the pullback was deeper than expected but still able to hold above the breakout area (9600 area - orange zone). A price retest of a breakout level is the norm in technical analysis. What is now important is that the price do exactly that, i.e. come near the 9600 area, and bounce, to confirm the old resistance as new support. If that happens in the next few weeks, the index is still in an uptrend with 10530 as first resistance followed by 12000. If the price is not able to bounce but breaks down and goes through that 9600 level, a downtrend could be in the cards, sideways range at best.
The EUR/USD is still trading within its downtrend channel in place since the 2008 highs. The latest price action is showing a higher low and the MACD is about to make a bullish cross, which could suggest the early signs of a change in trend.
Patience is key while the price oscillates within its descending triangle.
Support 104.50 followed by 101.25
Resistance 110.50 followed by 114.75
The cable is still range bound between its 1.20 support level and 1.34 resistance area.
The 0.6650 support broke and the pair is now heading towards 0.6025.
Resistance around the 0.6825 area.
The pair is trying to stay above $1.3375 towards 1.3685. Support around 1.3065.
Gold hit its target "just below $1700" mentioned in the past months. By doing so, the price action created a bearish candlestick known as "shooting star". Small bearish divergence with the RSI. The next support lies just below 1500 followed by the breakout area (orange zone) around 1365. 1700 remains a resistance.
Silver has been trapped in the same trading range for the past five years...
Long term resistance $21.50, long term support $14.
After last month's major monthly bearish reversal, crude oil printed another bearish candle this month. It will be interesting to see how the price reacts to the $42 level which is a major support area.
Bounce back to the $50 level or break down towards $26 ?
Resistance: $50, $57.25 and $67.
Support: $42 (major).