Hangseng 42-- Week 27 Moo River Watch (5th Jul to 11th July 09)

Moo River Trading System--Futures trading Made Easy: Moo River watch is based on the correlated findings amongst moo rivers on price, rsi, macd, repulse, elder ray, momentum and stochastic. Moo river trading system is a trading system, taking advantage of trendtrading or scalptrading opportunities based on findings of the Moo River Watch.
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Hangseng 42 (cash futures)

Renko study

Yearly: the reversal of the bear trend so far has gone very well in a V shaped rally with no pullbacks at all;

Quarterly: ditto;

Monthly: We can see a five waves down from end of 2008 and now we are in a very strong Wave 1, pending a Wave 2 pullback;

Weekly: we are in an upstream moo river, where we have possibly had the full crossing now, and we are in the process of meandering across from the upperbank to the lowerbank.

Daily: we hit the upperbank with an M top and now we are meandering across. 16000 should be able to hold all downsides for now.

4 hourly: we have almost finished the meandering now and it is almost time to ask that big question, big up or big down. The time zone has a maximum duration till 8th July.

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Overall, the renkos seem to suggest that we are pending a major pullback or in the process of a major pullback in an uptrend this year.

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Moo River Watch

Yearly

Price chart: there is insufficient data there, as Hangseng was reshuffled recently and my data chart only went back to 2006. On what is available, I can see that we are stuck in a downstream moo river, at the moment, we are meandering across from lowerbank to upperbank, or if you like, we are enjoy some bear market rally here, which could potentially take us till 2010 and beyond, unless the upperbank near 24000 is broken, which does not seem to be very likely. I would say 20000ish might be the maximum top Hangseng could go up to this and next year.

quarterly

Price chart: this is incredibly bullish as we have managed to break the upperbank of the downstream moo river and has managed to stay above the lowerbank so far, which is near 14000. Last quarter was the first green quarterly candle after 5 consecutive red candles, which is a major change in the trend.

Monthly

price chart: so far, we are in a very healthy upstream moo river at a rising angle of +45 degrees, but if you look at it closely, you can see we are struggling to maintain this very healthy angle. For me, we need to reduce the angle and I see a meandering process taking shape here, with price being held up above 16000 for now, with occasional spikes to get closer to 20000. I think for bulls, you must know you have had most of the bull run for this year now. If you had bought at the bottom of the market and have held onto them so far, it is any time from here and at any level as you please that you might to come out with your profit and pat your pack for a job well done. I can see the shaping of a less sharp upstream moo river and we have had the full crossing from lowerbank to upperbank and now we have been firmly rejected by the upperbank.

Momentum indicators are mostly meandering without showing a firm hand either way, though it is more likely to be bullish than bearish, hence why I can't see a major collapse in the market just yet. The months are turning into bullbear months, where both parties can make good money on limited scalping ambitions, until one day we hit that key bear point where the market will turn into bear market mode again.

Weekly

Price chart: If you count the waves here, we have a little Wave 5 up here to finish off the whole straight bull run from March low. The triangle is getting tighter and the time scale is up to the end of July or beginning of August, where there might be a dramatic change.

On momentum indicators, we are waning in bullish momentums. Stoch has reached and is struggling bull entropy levels. RSI did not quite reach bull entropy levels, but got very close to it. RSI is still in an upstream moo river, but we are meandering from upperbank to lowerbank. Momentum has dropped out of its upstream moo river with an M top as well. All other momentum indicators are struggling a bit. Overall, the main impulsive bull run has finished, there is still some residue bull fun left. You have to decide whether you are those who enjoy anti-gravity rides to the top and those tend to cash in a good profit level and sit back and chill out along the moo rivers.

Daily

Price chart: we are stuck in a triangle, which could potentially take us till 14 September to break down massively or early. The longer it is delayed the more massive the drop when it comes to it; the earlier the drop comes, the more likely that we might bounce up quite strongly. So we are in a catch 22 situation here, stubborn and greedy bulls don't let it go yet, while bears are still fearful and not fully committed. Hangseng has been the world leader in this bear market rally and it is simply playing for time, for the others to catch up so that we can top down together.

Momentum indicators are confirming the same story that we have had the main bull run already, but we have this intricate business left to sort out a top and then the journey downwards.


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Overall, the main part of the bear market has already finished for 2009, now we are in a topping exercise which is going to take weeks if not months for the bears to build up their confidence and crash the market down again.

For a weekly forecast, it has to have two possibilities as we are sitting on the lowerbank of the triangle:

1. bullish: 18100 and 19100;
2. bearish (if triangle is broken): 18200-17000.

good luck.