Tech Musings - Review

My call on yen has been almost prophetic. Yen has depreciated by 10% since my last post on 26^th October 2012, I think Yen has turned the corner and after two decades of continuous appreciation has started to depreciate.  In one year we may see Yen trading at 100 to USD although it will go through violent pull backs and long consolidation periods.

Yen

Similarly Nikkei has appreciated 15.5% from sub 9000 levels and had made a high of 10400 since my call on November 16^th 2012. Just like yen I think Nikkei has also turned the corner and will see robust appreciation in years to come.  

Nikkei

Tech Musings - Review

Gold fell by almost 4% from high of 1700 USD to 1635 USD in last one week. Readers may remember that I gave a tactical short call on gold on 14^th December 2012.  If we look at the daily chart of gold we can see that gold has taken support at the minor trend line. Since the larger pattern is bearish I expect gold to break below the trend line and fall to 1570 and 1520 which would be a crucial support for gold.  Any fall below 1500 will take gold to 1350 level.

Gold Daily chart

Similarly silver corrected by almost 8.5% and fell from a high of 32.53 to a low of 29.80. Since larger pattern in both commodities are bearish the fall may continue. Silver will find support at 26.20 – 27 levels and if silver goes below 27 it may slide further.

Silver Weekly Chart

Nifty has been trading around 5900 levels since last three weeks but have failed to convincingly break above it. If you see the given chart of Nifty you can see that Nifty has completed 76.4% retracement of the entire fall from high of 6350 to low of 4500. Long positions in market should only be created when Nifty convincingly breaks above 5950. As reader may remember I have mentioned about region between 5800 – 5900 being congestion zone in my post on 29^th September 2012.

Nifty - Weekly chart

I have time and again mentioned that market trend changes with change in time period. We are going to enter into a new calendar year in next 8 days. It is entirely possible that 2013 may not be as good for equity markets as 2012 was.

Readers may remember that on 21^st October  felt that S&P was trading at 1440 levels I wrote that “The most likely retracement form here should be towards 1360 levels.”

Again on 16^th November when S&P was trading at 1350 I wrote “S&P500 should have a pullback rally and a larger fall may come if S&P500 fails to stay above 1350 on monthly closing basis.”

If we look at chart of S&P500 inspite of an excellent pull back from the lows of 1350, it failed to move above the trend line and the current pattern indicates that S&P500 is in the process of making a large head and shoulder pattern.  If I extrapolate things It is not difficult to reach at the conclusion that next year may be very challenging and if DJIA index breaks below recent lows of 12500 next target can be as low as 11500. Therefore it will be better for investor to stay light and watch markets for the first two weeks of January.