Week 19 (10th May-16th May): Asian Moo River Watch

Hong Kong (HS42)

Yearly

How does a para sar dot change colour and this one is still red so far.

Quarterly

We have penetrated the downstream moo river on price chart here and it has been a solid break, but somehow without breaking 17600, we are still stuck in the possibility of a flat battle zone between bulls and bears. A row of red para sar dots are hanging heavily upon the price chart. Can the bulls manage to break this key resistance, a symbolic level almost.

We have still got 1.5 months left in this quarter, on a close above 16300 will signal the end of the bear market for Hong Kong.

Monthly

This is where the momentum indicators come into play and all of them are bending upwards, no obvious W there, which leaves the possibility of a flat battle zone. We have already left that downstream moo river in April and this month we have consolidated well clear of the former upperbank. Bollinger midline is near 20395. I just wonder whether that magic number 20700 will play a part here in this battle. We are getting closer to challenge the red row of para sar dots, who are like Man Utd defenders like Rio et al, most hated in the premiership, but secretly you do want them to be in your team.

Weekly

This is the most bullish place on earth.

Price chart had a reversal candle, which refuted the pullback to go straight up last wee. It has now broken through my upstream moo river, upon the sixth green para sar dots.

Weekly rsi has almost broken the upstream moo river to the upside as well, valued at 61.4, which seems to offer more room for the upside, though the shape of the rsi does leave the potential for a powerful M to bring forth a useful pullback at at least. For the bears, it will be satisfactory if we do not break 17600 this week and just repeat last week's range for another week, 15454 and 17594. On the price chart, price has gone too far to shape up an immediate M reversal, so it might require at least a double top there.

All momentum indicators are bullish, and repulse has broken the upperbank of the upstream moo river as well. This is a very strong bull run indeed.

If we do break clean of 17600, we will reach 20700 in absolutely no time at all and I am not sure whether we will stop there, as I am yet to draw any key resistance lines there, though there may be a minor resistance there just under 18500.

A break of 17600 will be very significant for bulls and bears, as it will break the intertwining downstream moo rivers from 2007 and we could safely say that is the END OF THE BEAR MARKET!

A false dawn near 17900 and it comes straight back into the downstream moo river will further complicate the picture, e.g., are we in a new upstream moo river now or are we back into the old downstream moo river, which means the bear market continues intact despite the recent rally.

I think we all should watch Hong Kong very closely for further clues about what lies ahead of the global markets.

Daily

If we twist the Elliott Wave Theory a bit, we might count out five waves up on price chart already, so we are in this final wave, which seems to have a few more days at the top yet.

All momentum indicators are bullish, though rsi is hitting 73.22 there, still some headroom left in the upstream moo river and the other indicators are not entirely over the top yet, signalling some residue bullish momentum at least.

Significantly, there are no M's anywhere in sight. Watch out for them, if you are a determined bear.


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Japan (Nikkei 225)

(based on 30 year advanced charts)

Yearly

Japan is lagging behind Hong Kong so much and we have not moved much at all this year. I think it is reluctance of the Japanese to follow the Chinese, which is the cause of it--Japan is hurting in its pride! They'd rather be doom and gloom and uniquely Japanese rather than boom and boon like the Chinese.

Quarterly

We are still well stuck in the downstream moo rivers on price and momentum indicators, as if the Japanese are refusing to join in this rally, though rsi does bounce up against the lowerbank there, but not much. It looks like at any moment the Japanese might drop on their weak knees and sulk in their eternal bear market blues. But Japan is world's No.2 economy, how strange that is!

Monthly

This is where we see a beautifully shaped W on rsi against the lowerbank of the downstream moo river, and it bears similariities around the world, which is why it is a global rally, where Japan has no choice but to be pulled up and out of the doom and gloom. But we are still in bear market territory, and there is no need to ask whether the bear market has finished or not yet!

Weekly

This is where even the Japanese get a bit bullish, with all indicators pointing up an noticeably rsi has the potential to shape up a M against the upperbank of the upstream moo river, though rsi is only 56.6.

I can see a butterfly pattern on price chart as well and last week has just confirmed that it is possible that this butterfly's right wing might be formed over the coming weeks if not months, patiently and meticulously.

In a way, Nikkei 225 is very similar to FTSE100, both having a butterfly pattern there to be unravelled and Japan is slightly leading the UK in that sense. Without Japan hitting 10000, there is really no point of talking about a pullback there.

Still 9750 might be a significant lifeline for bears, as this is the former weekly superhammer lifeline, a rejection there will be fatal for some bulls.

Very soon, Japan need to make a key decision about it fate, a break of 10000, will take the Japanese out of the doom and gloom very quickly and a rejection there will add further pessimism. The whole world over will be watching Japan's 10000!

And you can say we are stuck in this tightest of all triangles between 10k and 8900 in the coming week and there are only 2-3 weeks left, when the triangle must be broken one way or another.

Daily

With such a rarity of M's these days, we have to take note of the potential M on the daily momentum indicators and an early fall on Monday will shape up that M all over the place. Are Japan going to shy away from 10000?

We will wait and see.

Good luck, bulls and bears. Asia is the one to be watched closely, even if you do not trade it with HS42=dow and Jap225=ftse100, in terms of their similiarity and momentums.