Market Outlook 16/01/2016.

Another short term breakdown with further bearish developments overnight. The bearish daily impulse bar of SPI  (not shown) has a climatic  price action behaviour where further data over the coming days/weeks is required for it’s confirmation.What I am looking for is an impulse move to the downside followed by an above average reaction and a retest of the low made on the climactic day (or period in analysis). Below is the example of 2011 low climactic price action behaviour, which I have printed and look at every day at present. I use this as a guide going forward.

Weekly Chart of  XJO with Wyckoff Method Analysis showing 2011-2012 bottom formation. Climatic Action and Automatic Rally  is highlighted ( compare this reaction to the prior reaction around June July 2011 if you like) . Much greater stand out IMO ! It doesn’t mean that we will see it unfold in exactly the same fashion since there are other accumulation schematics. But all accumulations have the same phases regardless, if  Wyckoff Method is observed.

xjo20112012accumulationNext major support with XAO ( XJO shown above) since there are no intermediate and short term supports left, is the zone of 4650. Refer you to earlier posts. Will it be tested ? No one knows. If it is tested, will it hold ? Same answer again.

What may happen when we make a new low like the one overnight with SPI ? Further shorts are likely by new market participants in my opinion. How much extra fuel will they have to drive the market down further ? We will see over the coming weeks.

In the US, the Martin Luther King Jr. Day is on Monday the 18th where US Markets are closed. Following day the US Markets had been historically bearish. Then comes the US FOMC Meeting on 26-27th of Jan.. Until the FOMC meeting is out of the way, I personally expect extreme volatility not just in the US Markets but around the Globe.

Disclaimer

All the information and analysis provided on this website is general in nature and for educational purposes only and does not constitute financial advice. No content in any way implies a recommendation to buy, sell, hold or short sell any financial instrument, nor is it financial advice.

Investing and trading in financial markets carries considerable risk, and should always be done in consultation with a licensed financial adviser taking your personal circumstances, financial situation, objectives and needs into consideration.

Links to other websites are inserted for convenience only and do not constitute endorsement of any of the material on those sites, or any associated organisation, product or service. Kazim Agaoglu is not responsible for the content of any site owned by a third party that may be linked to this website and such links are provided as a courtesy with no judgment or warranty being made concerning the suitability, accuracy or otherwise of the content on any such site.

Kazim Agaoglu disclaims any undertakings, warranties or guarantees, express or implied and shall not be liable for any loss or damage whatsoever arising out of in connection with the use of or reliance upon any of the information on this website. The user accepts sole responsibility associated with the use of the material on this site, irrespective of the purpose for which such use or results are applied. The information on this website is no substitute for financial advice.

 

 

Comments are closed.