Thursday, January 10, 2013

Morning Market Analysis

The Chinese market has been on a role, rising nearly 17% in December.  Notice the steepness of the rally and the 3-4 different consolidation areas during the rally.  Prices are now above the 200 day EMA with rising shorter EMAs.  At some point, I would expect prices to pull back, if only for traders to take some profits.

The weekly chart shows that prices have moved through resistance established in early 2012.  Prices are now about all the shorter weekly EMAs (the 10, 20 and 50 week), with a fair amount of room to run up to the 200 week EMA. 

Both the Singapore (top chart, daily time frame) and Malaysian market (bottom chart, daily time frame) have risen strongly over the last two months.  Both have moved through important resistance levels and are now consolidating their gains.  As they are tied into the Chinese economy in a big way, these markets should rise in concert with China's markets.

The Hong Kong market is in the middle of good, six month rally.  This one is far less steep than the Chinese rally, which is good as it tells us that traders have been allowing for more consolidation on the move up.  Also not the bullish orientation of the EMAs -- all are moving higher and the shorter are above the longer. 

The weekly Brazilian market shows that prices are still bear multi year lows.  While there was a small rally in December, prices are still contained by levels established in the fall of last year.  The MACD is still negative as well.  However, money is flowing into the market and prices are strengthening.  A move through the 50 week EMA could lead to a strong rally as there isn't much meaningful upside resistance (aside from Fibonacci levels, the meaningful resistance levels are over a year old).