I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Monday, December 7, 2009

NIKKel, I Deserve at Least $0.06 For This Analysis

Okay, I will settle for $0.055

My last chart on the Nikkei was from this post (If I had a NIKKel for ....) on Nov 29. Here is the relevant chart:

So indeed we got the bounce off the support line. So scenario 2 is likely to be playing out:

2) It respects the support and bounces up. However this would be a classic technical bounce to burn off oversold. The bearish implications in this scenario are much more severe. The indicators have already shown significant bearish divergence earlier this year and I am showing below a potential Head and Shoulders setup of massive proportions. This would be a very big deal

So right now there is a strong move up. But unless that move generates a higher high (which it has a bit more work to do before that can happen) I say we have a very bearish Head and Shoulders potential setup forming.

Too early to tell, of course, but worth keeping on your radar screen.

blog comments powered by Disqus