With Colin enjoying a well earned Canadian long weekend, I've changed the format for today and taken a longer term look at a few selected charts
Asia Pacific Index Charts
Australia 200 Chart Notes.
Last night’s recovery sees Australia 200 testing the resistance of Friday’s high at 5268.
Any push higher could see the 14 day RSI testing trend line resistance around 60. What happens at this trend line might be significant with a break above indicating more potential upside but rejection leaving the RSI medium term downtrend intact. Above Friday’s high, the late September peak at 5320 is the next resistance.
The 50 day moving average provides potential support around 5177 and below that the trend line dating back to August currently intersects around 5136.
US Index Charts
US SPX 500 Chart Notes
US SPX 500 continues a steep short term rally. RSI trending higher above 50 suggests ongoing positive momentum.
While the short term rally has been strong in recent days, the big picture of this chart suggests a low momentum uptrend within a wedge style formation that began with the May 2013 peak. Gradual flattening of 50 day moving average since that time is consistent with declining medium term momentum.
From a big picture point of view, the trend line across the top of this wedge pattern provides potential resistance around 1740/50.
FX Chart Notes
Aussie Dollar Chart Notes
The rally over the past few days sees Aussie arrive at an interesting level.
In mid-September it backed off the 38.2% retracement level but is now testing it again. In the meantime, the 20 day moving average has done a decent job of defining the uptrend. The 14 day RSI has also trended up but is now approaching the overbought zone above 70%.
How the Aussie treats the 38.2% retracement level now might be significant. A push higher might make the whole move up since the early August low at .8856 look like a 5 swing structure. In that case we could be in the 5th and final swing higher before a corrective decline. I've labelled this 5 swing view of life on the chart.
The alternative might be failure to get above the .9528 high and a break below the 20 day moving average. If that happens the dashed blue support line and 55 day moving average around .9233 might become important. A break below (or overlap through) that level would look like a sign of weakness suggesting potential for the major downtrend to resume with a move below .8856.