Hangseng 42-- Week 23 Moo River Watch (7th Jun to 13th June 09)

Hangseng 42 (cash futures)

I will start doing a Renko study and a Moo river Watch, so that we may be able to draw some correlated conclusions.

Renko study

Yearly: this bounce has been relentless with no hiccups at all so far, carving through key resistance levels with ease. It is rising at the healthy angle of +45 degrees, which seems to hint at a V shaped rally. We are getting closer to 38.2% Fib level at 19568, having overcome the 23.6% Fib level at 17647;

Quarterly: same here, the rally is continuing without a pause, carving through Fib level 23.6% at 16892 and is threatening Fib level 38.2% at 18957 and in the distance there is the Fib level 50% at 20625, this number rings a bell for another magic number at 20700!!!

Monthly: same here, no pause yet;

Weekly: this gives us more clues about this rally. We seem to be in a 5 wave impulsive bull run here and we are currently in Wave 3. There is no sign of topping yet. We are yet to find out the Wave 3 top and then there should be a healthy pull back to some Fib levels;

Daily: no signs of double M top yet, it seems renko likes doing M top pullbacks or collapses. Time to watch out for them.

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Moo river watch

Yearly

Price chart: We are still in the downstream moo river, which is a ginormous one. A maximum bounce off the lowerbank could take us up to 24000 and a more plausible target before a major pullback could be near 20400, which again rings the bell of the magic number of 20700. Somewhere there, we are done with this rally and a proper regurgitation will take place.

Quarterly

Price Chart: while the downstream moo river from yearly rumbles down here, we can draw a butterfly shape here, though in my simplistic EWT waves, we can clearly see that we are in Wave 3, pending a top and a pullback. What I am sensing here is while this Wave 3 has been fast and furious, the Wave 4 and Wave 5 could be slow burners, taking ages. So if you are a bull, you might have already had most of this year's bull fun, some scalping and range trading is to follow. I still see a Wave 3 target near 20700, somewhere there.

Monthly

Price chart: you can say the structure is complicated to see the future, but you can easily say it has been the easiest of all bull runs if you had set your heart in the bull camp since March. We have had four months in a row with green monthly candles. I always think 3 green candles in a row is enough to reverse the bear run. The upstreams here have turned parabolic, from a healthy rising angle of +45 degrees to the current +60 degrees. We are getting very near to a top now, in this Wave 3 run, 20700 beckons and winks in the not too distant future now, whether that is the ultimate Wave 3 and Wave 5 top target. One day, we will stare at the magic number of 20700 in amazement!

RSI: next time, you see a W or M on monthly RSI or any other time zones, sit up and take note. What a run we have had out of this W.

All other momentum indicators are supportively bullish with no signs of M or tiring or being overbought yet.

Weekly

Price chart: we are definitely in a very sharp upstream moo river, without the lowerbank being threatened or breached, we continue upwards and onwards. In terms of waves, as far as my simplistic EWT view is concerned, we seem to be in Wave 5 of the main Wave 3, so a top is very near. The next two main waves 4 and 5 will throw out some complicated minor waves ABC and 12345, to keep bulls and bears all richly entertained. I try to gaze into the future here and the month of September looms large and the date 20.09.2009 looms large as well. This is when things might go really pear-shaped! Before then, we live in hope and enjoy life with hope in our hearts and souls.

RSI: how does RSI represent or embody the end of Wave 3 in price? Would it actually reach into 70's top so that Wave 5 will be realised upon bearish divergence? We seem to have given the possibility of shaping up an M there a miss for now. Either we will try to shape up an oddly shaped W or we simply push for the top now. We are in an upstream moo river anyways.

Momentum: we have smashed the downstream moo river there in Week 17 in May, having broken the triangle there and then. We are in the upstream moo river and seem to be enjoying it.

Elder Ray: this one is actually in a downstream moo river and it is challenging the upperbank now, with potentially a mis-shaped W or M.

MCAD: this one is keeping mum by keeping on challenging the upperbank of an expanding triangle, bullishness seems to be gathering pace.

Repulse: it has broken the upperbank of the upstream moo river and has gone parabolic.

Stoch: this one has hit the top and is now floating in the sky, the only way is down, but the question is when!

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For a weekly range forecast: I would say an early week rise, but to tank down perhaps from 19000ish towards 18000ish.


Good luck.