Week 17 (26th April-2nd May): Asian Moo River Watch

I begin my moo river watch on Asia due to the reason I need to ring and talk to a few investment buddies in Asia today.

Hong Kong (HS42)


Yearly: it is a bearish year so far, with a red Para SAR dot, though we have started in the green for now;

Quarterly: it is a bearish quarter as well with a red Para SAR dot, though same again as yearly, we have started on the up;

Monthly: This is where the moo river watch start.

Price: We have broken the long running downstream moo river proper this month with a big green candle, though there is still a slim chance of us reversing back into the downstream moo river, if we finish the month below 13255, which is a bit unlikely for now. The monthly maximum range is between 12650 and 17550 and we have a red Para Dot there, signalling selling pressure ahead.

Momentum indicators are all over the place, not giving signals for a trend.

Weekly: We have been mostly bullish across momentum indicators (RSI, STOC, MACD, Momentum, Elder Ray and Repulse), but we are getting a bit long in the tooth here, with several momentum indicators hitting top or upperbanks, signalling a near term top is with us.

Interestingly, on the price chart, there are two possible scenarios, one for a flat zone between bollinger bands of 16332 and 11499 (13915 mid) and the second scenario is an upstream moo river, whereby we are stuck in a tight triangle along the lowerbank, a full rise towards upperbank will take us up to 20000 maximum, but I would not bet on that to happen, unless the upper bollinger band is breached or even recent high is breached at 16053.

With such a tight triangle, we will have the answer in this coming week, whatever happens, don't ask for a reason, just follow the breakouts, though leave some safety margin, if broken high, then a bull would buy on pullbacks, if lower, then a bear would sell into rallies, quite straight forward, it seems. The end of the triangle should be ideal to trade, though you need to focused, determined and have your trading plan ready, because things could come fast and furious.

Daily

price: the four red para sar dots are warnings to the bulls, take your money and run and perhaps rebuy on breakouts.

The momentum indicators are all bearishly configured, though some are trying to bend up to confuse a few late bulls, but we do not know the patterns or waves for this downturn, if the triangle is broken to the downside. Monday, we should have the answer. Initially, the downside might be limited to 14500 to give bulls some hope and upside on breakout might be limited to 16500.

It will a triangle trading to start with for Hong Kong and then you may want to find and draw the upstream or downstream as appropriate. If you are a trader, Hong Kong is the best place to be for the coming week, though the triangle could squeeze in one more week of indecision in a small range between 15800 and 15200.


PS Keep an eye on Hong Kong. I think Hong Kong is the forerunner of the global indices. So Hong Kong will provide us with the answer what happens when the bear market ends in the West (all bear/bull parties come to an end, one day!), whether it is followed by a flat meandering zone or an upstream moo river, so the significance of the coming week can not be underestimated.
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Japan (Nikki 225)
(data: 30 year chart from IG advanced)

Japan is Western, though it is located in Asia and Japan is the opposite example of Hong Kong, it could tell us what it is like to have a prolonged recession and bear market for decades on drunken sake! But I think the Japanese are unique and the rest of the Western World will be different, as we can see the non-transferrability of Japanese management tools in the 1990's, the Japanese are unique!

Yearly: we are very much in a giant bear market, stating the obvious here. We need to break the upperbank of the downstream moo river for the past two decades at 15555 in order to finish this bear market, it looks like a tall order at the moment.

Momemtum indicators are drunken on pessimism and sake, so nothing to be alarmed about for the bears yet.

quarterly: This is where the real moo river watch starts. There are a few interesting things to note.

Price: we have hit the lowerbank in the downstream moo river and now we are meandering across to the upperbank, and this meandering could take quarters if not years.

RSI seems to have the lowerbank as well, macd is still waning, Momentum and Elder Ray are bending up, but nothing too bullish there at all, just a drunken Japanese bear market bounce. For Japan watchers, this is a worrying sign, deep depression/pessimism needs an outlet once in a while and this is a scary thought!

Monthly: this is where things get interesting for bulls and we have a pair of correlated W's on price and rsi, signalling strong near term bullish intentions. But you have to ask whether this is the end of bear market W up or the dead cat bounce W up, the judge is still not awake from a night out on sake in town yet!

We need to reach rsi 45 or break 10400 on price in order to be really bullish, though rsi 40 will be a formidable barrier to cross, as the upperbank of an ongoing downstream moo river.

Weekly: we are wavering here, momentum indicators are topping or tiring and price has not got out the flat bullbear zone, though para sar dots are still green. We really need to break 9400 to show a real bullish intent to go for 10k. It is not as easy as Hong Kong as we are going sideways.

Daily: we have had a good night in the town and we need a good liein here, momentum is waning and price is stuck and we look over to Hong Kong for further clues.

Good luck, bulls and bears, Hong Kong is preferred to Japan as a trading spot for a triangular breakout, up or down.