I have been concerned for a while about the strong performance of the NASDAQ with gains concentrated in a small number of large cap tech stocks. Technology is a late stage cycle and when technology hits peak performance it’s often a sign of broader trouble ahead. On Friday while the US 30 hit a new all-time high, the US NDAQ 100 went off a cliff, suggesting that the recent uptrend in the markets could be cracking. Japan 225 may also be starting to break down.
In currency action, GBP weakness is not a big surprise on the election news, but the inability of EUR to rally on what should have been good news for the EU looks troubling with the single currency turning down against both USD and JPY. CAD is showing signs of life with USDCAD back under $1.3500.
Asia Pacific indices
Australia 200 has bounced up off of its 200-day average near 5,620 toward 5,700. So far this looks like a trading bounce with next potential resistance near 5,745 then 5,800.
Hong Kong 50 remains in an uptrend, finishing last week near 26,135 close to a new high on trend, but RSI rolling under 70 suggests upward momentum may have peaked. . Support moves up toward 26,000 with next measured resistance near 25,200.
Japan 225 continues to roll over, dropping from near 20,090 back under 20,000 and on toward 19,900. RSI falling toward 50 indicates a downturn in momentum pending. Next potential support near 19,755 a 23% retracement of the recent rally.
North American and European Indices
US 30 is bouncing around between 21,190 and 21,220 just short of 21,230 resistance after a breakout attempt on Thursday failed. RSI suggests upward momentum levelling off into another consolidation phase with correction support near 21,110 the 21,060. Next measured resistance on a breakout possible near 21,350.
US SPX 500 is still consolidating recent gains between 2,424 and 2,438. Rising RSI indicates underlying accumulation intact. Next measured resistance on a breakout possible near 2,452.
US NDAQ 100 broke down in a big way Friday. The index failed to overcome 5,900 resistance, broke trend support near 5,845 then plunged down toward 5,660 before bouncing back toward 5,745. RSI breaking 70 and dropping to 50 signals upward momentum collapsing and a downturn pending.
UK 100 spiked up to 7,545 but then dropped back toward 7,500 with next support possible near 7,480 then 7,450 and 7,400. The failed rally appears to have carved out the right shoulder of a head and shoulders top with the head near 7,600.
Germany 30 remains under accumulation as higher lows below 12,900 from an ascending triangle and RSI holding 50 confirms continuing upward momentum. Support rises toward 12,675 with the index climbing into the 12,740 to 12,780 area.
Gold continues to turn back downward from a double top near $1,295, falling toward the $1,270-$1,275 area. RSI falling toward 50 confirms upward momentum fading and a downturn pending. Next potential support in the $1.256 to $1.258 area near the 50-day average and a Fibonacci level.
WTI crude oil is attracting support at the $45.00 round number once again, trading between $45.20 and $45.80. RSI suggests downward pressure levelling off for now. Next bounce resistance near $46.60 with next downside support on a breakdown near $43.50.
US Dollar Index has regained 97.00 and appears to be climbing out of a base. A positive RSI divergence not confirming the recent index low suggests that downward momentum is easing and a rebound possible. Next potential resistance near 97.65 then 98.00.
EURUSD continues to roll over, falling back under $1.1200 and on toward $1.1195. RSI falling toward 50 indicates a downturn in momentum pending. Next potential support appears near $1.1160 then $1.1115 a 23% Fibonacci retracement.
GBPUSD was slammed downward on the UK election news from $1.2920 but appears to be stabilizing in the $1.2715 to $1.2795 area between two Fibonacci levels after holding $1.2635 Fibonacci support. RSI breaking under 50 confirms momentum downturn.
NZDUSD has levelled of near $0.7200 and may be starting to consolidate recent gains and work off an overbought RSI between $0.7160 and $0.7220.
AUDUSD is sitting on $0.7535 a Fibonacci level, consolidating recent advances near its 200-day average. RSI rollover suggests upward momentum slowing. Next potential correction support near $0.7500 then $0.7485 the 50-day average with next resistance near $0.7570 and $0.7590.
USDSGD appears to be forming a rounded bottom between $1.3790 and $1.3880 recently climbing form $1.3800 toward $1.3845. RSI climbing toward 50 indicates downward pressure easing and an upturn pending. Next potential resistance near $1.3920 then $1.3940 on a breakout.
USDJPY is bouncing around between 109.20 and 110.60 recently testing the top of this range as support moves up toward 110.00. Next resistance on a breakout possible near 111.00 the 50-day average. RSI still needs to regain 50 to signal an upturn in momentum.
GBPJPY broke down Friday, diving from its 50-day average near 142.10 down toward 139.60 before regaining its footing and bouncing back above 140.00 toward 140.40. Next resistance possible near 141.85.
EURJPY continues to form a rounded top between 122.50 and 125.80. Resistance has dropped toward 124.00 while RSI dropping under 50 signals momentum turning downward as a descending triangle forms a sign of distribution.
USDCAD has turned back downward after failing to overcome resistance hear $1.3550. The index has dropped back under $1.3500 and it testing uptrend support near $1.3430. RSI still below 50 indicates continuing distribution.