ASX 200 - Daily Chart
The XJO saw a Hanging Man candle on Friday suggesting that the peak of the bounce may be in.
Another indication that the bounce may be starting to roll over is the falling volume from the capitulating volume (circled) seen at the start of the bounce last week.
Technical indicators are still bullish but MACD momentum histogram is starting to flatten out.
ASX200 Futures showed price fell further on Friday night to around the 5880 support level.
Early next will tell a better story.
Best to look at Monday's close in the US markets for direction.
I am learning more towards a downward move next week though..
View attachment 1359303
US500 - Daily Chart
The US500 opened about .5% lower and closed almost 1% down on Friday.
Price pushed down to touch the 200MA and bounced off strongly which was bullish.
The chart isn't showing volume but is a similar setup to the XJO with volume decreased at the peak of the recent upward bounce.
Technical indicators are starting to turn bearish with MACD momentum decreasing.
Again, next week will be more telling on the direction of where markets are likely to go.
View attachment 1359341
Gold Futures - Daily Chart
Spot Gold showed a big bearish candle on the charts last night and broke through $1,220 support easily.
RSI and MACD are bearish.
Going by the way the indicators are trending and the big bearish candle I'm expecting a move lower in Gold.
A real possibility now is seeing Gold touch the $1,280 support but could go lower if the USD continues to the upside.
View attachment 1359289
DXY (USD) - Daily Chart
The USD did a quick pull back to 95.60 support after uncertainty from the US mid-term elections on Tuesday.
On Wednesday it was confirmed that the FED are expected to continue rising interest rates in December and further rate hikes into 2019.
This was bullish for the USD and the chart has since reversed back to the 96.80 near break out level.
Gold is mostly pegged to the USD, hence why we saw a big downward move in Gold yesterday/last night.
View attachment 1359291
DCN - Daily Chart
DCN is in a bullish ascending triangle setup.
On Friday DCN had a nice big bullish candle, although it lacked a bit of volume behind the move.
RSI and MACD indicators are neutral and are turning to the upside.
It will be interesting to see how this plays out next week and see if DCN can hold above the $2.25 - $2.40 range, especially if Gold continues to go lower.
I'm very bullish on DCN but I'm not sure price will be able to hold above this range if Gold continues to go lower.
View attachment 1359293
ASX/US markets - Turning bearish
Gold - Bearish
USD - Bullish
Overall it appears we may be heading lower next week.
A good indication of how the rest of the year will play out is by how far the downward move is, that's if it does come play out next week.
A slight retrace with increasing volume to the upside should be seen as bullish.
A big downward move on increasing volume would be bearish.
A bigger downard move past recent lows would be very bearish and possibly confirmation that the bear market has begun.
On another note, figures have started to come out of China (the world's second largest economy) suggesting that their economy is slowing down.
This would also help explain why their stock market started falling before trade tariffs were introduced..
A report released this week by Bloomberg has said that 1 in 5 homes in China are empty...
https://www.bloomberg.com/news/arti...-homes-are-empty-that-s-50-million-apartments
China is Australia's biggest trading partner and accounts for almost 1/3 of our countries exports so any slowdown in China would likely impact Australia in a big way.
Oil is now also in a bear market with some analyst suggesting that the cause isn't coming from excess supply but from a decrease in demand caused by a slow down in the world's economies.
It's becoming harder and harder to be bullish on the markets when more and more data is suggesting a slow down in growth and that we are likely heading towards a global recession.
I believe the biggest (short term) catalyst for markets is whether the Democrats are willing to work with Trump/Republicans and whether they are willing not to continue investigating him...
Trump has already announced that he is willing and wants to work with Democrats but has also said that he vows a "War like posture" if Democrats try to investigate him.
https://www.nytimes.com/2018/11/07/us/politics/trump-midterms-house-senate.html
(20min delay)
