20090225

The WIG Index opened high, but fell during day:



As per yesterday's post - not much can be said and we have to wait for market actions. The primary trend still favors south direction.

The Polish Monetary Policy Council lowered interest rates by 0.25% to 4% (here).

As per Holder portal, 56.5% of total polish mutual funds' transactions were selling shares (here).

The Northern Trust partied a little bit too much (here or here).

I'll be out for a week, therefore don't expect new updates during this time.

Sources:
[http://www.thedisciplinedinvestor.com/blog/2009/02/24/party-at-northern-trust-concert-and-drinks/]
[http://news.morningstar.com/newsnet/printNews.aspx?article=/dj/200902241803dowjonesdjonline000652_univ.xml]
[http://gielda.onet.pl/0,1923276,wiadomosci.html (via Google Language Tools)]
[http://www.holder.com.pl/fm.shtml?id=6727&fm=11154&c=37378025020 (via Google Language Tools)]

20090224

The WIG Index fell -0.79% today:



Negative divergences in RSI and CCI seem to confirm the downtrend. Also, lowering volume could give us some clues about timing.
Nevertheless, those are subjective interpretations and we simply have to wait for market actions as not much can be said right now.

Brian's video for today (here).

20090223

The WIG Index lost -0.80% today:



The volume was small. The gap from last week acted as a resistance, but really not much else can be said after today's session. The pattern of lower high and lower low is well visible and that favors the downtrend.

There is quite bearish interview with Peter Schiff (part one, part two, part three) about US economy.

The polish government is planning to enter ERM2 channel quite soon (here).

Brian's video for today (here).

Sources:
[http://news.money.pl/artykul/polska;wchodzi;do;erm2;negocjacje;rusza;wkrotce,227,0,429539.html (via Google Language Tools)]

20090221 - EURPLN, CHFPLN

As it was mentioned in this post, the polish government initiated a intervention in currency exchange market and converted amount of EUR to PLN (here). The effect is well visible on chart:



The situation on CHFPLN chart is similar:



The current situation can be tricky. The uptrend is still intact, but the currency market becomes more and more volatile now - the lows are closer to each other in terms of time. In current situation opening new positions can be risky, but there is not much we can tell right now.

Depending on trade style and risk management, some traders might want to move the stop loss to Thursday's low.

Update from 2009/02/22:
There is a interesting article from eGospodarka.pl portal; it gives good summary of PLN depreciation background (here).

Sources:
[http://www.money.pl/pieniadze/komentarze/artykul/konsolidacja;w;notowaniach;eur;pln,74,0,429130.html (via Google Language Tools)]
[http://www.finanse.egospodarka.pl/38146,Spekulacje-walutowe-skad-spadek-zlotego,1,48,1.html (via Google Language Tools)]

20090220

The WIG Index has lost -1.66% today:

The situation is not clear enough to give any reliable forecasts. The primary trend is down, therefore we shall expect further movements in this direction.

Gold seems to continue it uptrend and another long-term buy signal has been generated today:

20090219

Today's session was quite dynamic (+4.12%):



Regardless, today's gain, the pattern of lower lows & lower highs is well visible. There is not much to say - the WIG Index still looks bearish.

The Polish government will defend PLN (here or here). Also, the Goldman Sachs announced end of betting on depreciation of central European currencies (including PLN) (here). Nevertheless, from technical point of view, both EURPLN and CHFPLN are still in long-term uptrend.

Another Ponzi scheme has been found in US (here).

Brian's daily video here.

Sources:
[http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aP6gJ42Or17o]
[http://www.nytimes.com/2009/02/18/business/18stanford.html?_r=1&bl&ex=1235192400&en=1940fa97be5bac75&ei=5087%0A]
[http://biznes.onet.pl/5,1532975,prasa.html (via Google Language Tools)]
[http://www.dziennik.pl/gospodarka/article323196/Zloty_odrabia_straty.html (via Google Language Tools)]

20090218

The WIG Index continued its fall today:

The lower low has been made and it's long-term sell signal. The market shows great volatility and it's not the time for long-term traders.

Brian published not so optimistic analysis about US market (here).

The US government unveiled a plan, which should help US mortgage owners (here).

There is quite interesting article about how often the Internet portals are queried about polish real estates (here).

Sources:
[http://dom.money.pl/wiadomosci/artykul/drgnelo;na;rynku;nieruchomosci;na;razie;w;internecie,209,0,427729.html (via Google Language Tools)]
[http://www.marketwatch.com/news/story/Obama-foreclosure-plan-may-help/story.aspx?guid={23100FFE-C714-4352-B218-9DFC6D042960}]
[http://alphatrends.blogspot.com/2009/02/burden-of-proof.html]

20090217

The WIG Index lost huge -6.65%:

The long-term sell signal has been generated, however the fall exceed any expectations (table thanks to stooq.pl):

There is no reliable way to say if this swing will retrace or continue. I would also say the target of 21500 from triangle (this post) has been reached (it's safe to assume ca.90% of projected size will be meet).

The EURPLN has shown tremendous volatility (buy signal generated after crossing 4.70):

The EURPLN is near the high of 4.95 from 2004, crossing this level will generate strong long-term buy signal.

The CHFPLN also rallied (long-term buy signal has been generated after crossing 3.15):

Unfortunately, the CHFPLN has taken the high from 2004 and that are bad news for polish mortgage owners.

The Polish Government may initiate a currency intervention if EURPLN exchange rate crosses the level of 5PLN for 1EUR (here).

It's very subjective opinion, but this uptrend may be easily qualified as parabolic uptrend (here or here). There is no reliable way to say how long the uptrend will continue, but this formation often marks the end of a move with prices not returning to the ultimate highs again for a long time (here). The retracement can be very fast and I personally think it is risky to enter long positions now.

Sources:
[http://waluty.onet.pl/1918351,wiadomosci.html (via Google Language Tools)]
[http://www.thestockbandit.com/Parabolic.htm]
[http://www.forex-articles.net/article-24.html]
[http://www.marketoracle.co.uk/Article5478.html]

20090216

The WIG Index dropped -3.25% today:

As per chart - the WIG Index is again on the edge. The positive divergences (higher highs in RSI and CCI) did not worked out as supposed. Unfortunately, the primary downtrend favors the continuation of fall and very small volume can result in quite dynamic move.

Tomorrow's session can result in another long-term sell signal, but we should never take any forecast for granted.
Still, the best position on WSE is in the money.

20090214 - EURPLN, CHFPLN

During this week, the EURPLN has made daily low at 4.40:

Depending on your timeframe and size of position you might want to move trailing stop to this level. As per uptrend continuation, the odds favor breaking the 4.70; however we shall as always observe the market continuously.

The similar situation is in CHFPLN chart:

The CHFPLN is still below high from 2004 (3.13), therefore we have to wait for resolution:

The BigMac Index's basket consists of only one item - McDonald's Big Mac, which is produced in about 120 countries. The theory of purchasing-power parity state, that dollar should buy the same amount of identical items in all countries. The Big Mac PPP is the exchange rate that would mean hamburgers cost the same in America as abroad. Comparing actual exchange rates with PPPs indicates whether a currency is under- or overvalued (here).
Regardless how ridiculous and imperfect this may sound, the Big Mac Index is widely cited by economists around the world as a real world measurement of purchasing power parity.

As per the Big Mac Index, the USDPLN is overvalued ca.40% (here, as of 4th February 2009):

Sources:
[http://en.wikipedia.org/wiki/Big_Mac_Index]
[http://www.economist.com/markets/bigmac/index.cfm]
[http://www.economist.com/markets/indicators/displaystory.cfm?story_id=13055650]
[http://en.wikipedia.org/wiki/Purchasing_power_parity]

20090213

The WIG Index did not change today too much:

There is not much to say. The WIG Index is in primary downtrend. The positive divergences and rising volume suggest the short-term rally (subjective opinion); however it's not the reason to have any long positions now.

The cost of protecting investors from a potential default on Poland’s bonds (CDS instruments) has risen to ca.300 points today (here or here). This outlook is quite pessimistic and it's really hard to believe there is significant risk of Poland's bankruptcy, especially with positive (but reduced) GDP forecasts (here) and weak currency.

Sources:
[http://euro.bankier.pl/news/article.html?article_id=1905534 (via Google Language Tools)]
[http://www.investopedia.com/terms/c/creditdefaultswap.asp]
[http://www.bloomberg.com/apps/news?pid=20601009&sid=aKhpyKIDXm9w]
[http://www.gowarsaw.eu/en/news/ebrd-cuts-polands-gdp-growth-forecast-for-this-year-to-1-5]

20090212

The WIG Index registered significant lost -2.32% today:

Nevertheless, general situation has not been changed. We are still in primary downtrend with possibility of short term rally.

The gold has crossed the last high, therefore we have now buy signal:

The trader can easily get exposure to gold via RCGLDAOPEN certificate. Nevertheless, USDPLN has to be also closely observed (especially with latest volatility).

As per other gold news, the International Monetary Fund does intend to sell just over 400 tonnes of gold (here).

As per gold trading, an interesting video from Carolyn from Fibonacci Queen can be watched here.

Sources:
[http://money.ninemsn.com.au/article.aspx?id=750248]

20090211

The WIG Index has fallen -1.87%:

Today's session did not change the situation. We are still in primary downtrend, but we might generate medium-term (daily) buy signal quite soon. Also, the increasing volume and positive divergences in RSI and CCI suggest a rally in short term.

The odds are favoring the continuation of downtrend in long-term and we don't want to have any long positions now.

Gazeta Wyborcza has published an interesting interview with Zygmunt Bauman (here). Professor Zygmunt Bauman discusses few social impact the crisis can have.

Sources:
[http://wyborcza.pl/1,75248,6251875,Bauman__koniec_orgii.html?as=1&ias=10&startsz=x (via Google Language Tools)]

20090210

The WIG Index rally continues:

The WIG Index has crossed Fibo 61.8% from last daily peek on high volume; also the CCI and RSI indicators are making the higher highs. However we are still in primary downtrend and that has not been negated yet.

US market closed quite bad (-4.8% S&P500, -4.54% DJIA), that could trigger sell-off at tomorrow's session. Brian's video here.

Additionally, we should reconsider the triangle formation with target level ca.21500 (this post), as the rebounce seems to be quite dynamic. However, let's wait for daily buy signal at least (the high of 25550 shall be crossed) before we abandon this formation.

Polish currency options might be cancelled (here) - this topic is very interesting and can have big impact in polish stock market.

The Obama's economic-stimulus package has been accepted by the US Senate (here).

Russia seems to have some issues with its foreign debt (here).

Sources:
[http://www.marketwatch.com/news/story/Senate-approves-massive-economic-stimulus/story.aspx?guid={CCBC3CEB-7DE1-4C27-873F-DA3D3C343F2B}]
[http://www.money.pl/pieniadze/wiadomosci/artykul/ustawa;uniewazni;umowy;opcji;walutowych,205,0,426189.html (via Google Language Tools)]
[http://seekingalpha.com/article/119590-russia-about-to-default-on-sovereign-debt-again]

20090209

The WIG Index rallied to 61.8% Fibo level (daily swing):

The WIG Index rally continues. The long- and medium-term is still sell, but the  short term trend is obviously up. Nevertheless, situation is still risky.

The gold is in interesting situation:

The gold is near the level of 930, which is last high. Breaking this high will generate long-term (monthly) buy signal. The investment in gold can be made via RCGLDAOPEN certificates (for example), however note their price also depends of USDPLN rate, which add more risk to the transaction.

It seems the private capital might help the troubled banks in US (here).

Sources:
[http://www.marketwatch.com/news/story/Payrolls-plunge-598000-most-34/story.aspx?guid={A5FE8FAF-C299-4EB4-BDE6-BADB3C394840}]

20090207 - EURPLN, CHFPLN

This week has shown us the significant drop in EURPLN and CHFPLN exchange rates (charts thanks to ChartStation):

The EURPLN was traded as high as 4.70 during this week, currently the exchange rates are ca.4.50. Unfortunately, last weekly low is 3.87 and before crossing that level we won't be able generate long-term sell signal. Therefore, we might want to draw the Fibo levels (as per picture); as per Fibo theory, the price might well retract to 4.18 (plus some error margin) and it's still a correction.

The similar situation is on daily CHFPLN chart:

However, the CHFPLN is much more interesting now. The CHFPLN is near the highest high (3.14) since its inception in 1993 (weekly chart):

Crossing it and confirming it (it's still in error margin) will generate strong buy signal.

Unfortunately for polish mortgage owners, the uptrend in CHFPLN is well visible and situation is dangerous. It also seems few of Central Europe emerging countries have the same problem (here).

There is an interesting video from Bloomberg (here).

Sources:
[http://givanomics.blogspot.com/2009/01/swiss-clouds-hanging-over-central.html]

20090206

Today's session shown us quite a rally (+2.99%):

Nevertheless, situation still looks dangerous. Right now index just touched Fibo 38.2% retracement, thus there is a long way up before the long-term buy signal can be generated.

20090205

The WIG Index has gained some points today:

Nevertheless, current situation does not look optimistic. There is no trustable sign of downtrend reversal and generally speaking, the best position in on cash now.

The polish government considers postponing the entry into the ERM2 and thus PLN to EUR replacement (here via Google Language Tools).

The currency exchange options can force even more polish corporations to fill for bankruptcy (here via Google Language Tools).

Sources:
[http://en.wikipedia.org/wiki/European_Exchange_Rate_Mechanism]
[http://www.money.pl/gospodarka/wiadomosci/artykul/do;erm2;pozniej;rzad;nie;chce;ryzykowac,249,0,424953.html (via Google Language Tools)]
[http://firma.onet.pl/1910827,wiadomosci.html (via Google Language Tools)]

20090204

The WIG Index closed 0.98% higher than yesterday, however the lower low has been made:



The WIG Index did not make any dynamic moves today (in comparison to yesterday). There is still downtrend, confirmed by RSI and CCI divergences.

As of today there is no sign of trend reversal and we should not have any long positions.

Brian's video for today here.

20090203

Today's session confirmed the sell signal from yesterday:



The WIG Index made lower low (another long-term sell signal) with huge drop -3.76%. From triangle formation, we can draw target price at ca.21500.

The polish market was very unusual one among mostly-green Europe (chart thanks to stooq.pl):



The WIG Index does not look like it is in sync with rest of the markets. Also, this selloff was not accompanied by increase in volume. That's leaves us some doubts about current market situation.

Nevertheless, only the price pays, not opinions. There is no reason to buy and it's the best to wait for clarification now.

The EURPLN and CHFPLN shown some volatility:



The long-term buy signal was also generated on CHFPLN:



Both currencies' uptrends stay intact, which is not good idea for polish mortgage owners.

20090202

The WIG Index crossed the 24100 level:



Situation is quite dangerous. Target from triangle and Fibo 168% are ca.21500. Sell signal has been given; however, I would prefer to wait for tomorrow's session close as there is possibility of bear trap. Obviously, there is no reason to buy and the odds are in favor of downtrend continuation.

Today's session is quite well summarized in this article (via Google Language Tools).

More general approach to problems in polish economy is presented here (via Google Language Tools).

The January Barometer has been mentioned in this post. The S&P500 ended with -8.57% loss, therefore we shall expect 2009 to be bad as well. However, note this is just one indicator and shall not expect anything.

There is an interesting article about Asia situation on US crisis (here).

Sources:
[http://www.investopedia.com/terms/b/beartrap.asp]
[http://www.investopedia.com/terms/j/januarybarometer.asp]
[http://gielda.onet.pl/0,1530331,komentarze.html (via Google Language Tools]
[http://msp.money.pl/wiadomosci/zarzadzanie/artykul/przedsiebiorcy;alarmuja;rosna;zatory;platnicze,122,0,424058.html (via Google Language Tools)]
[http://gospodarka.gazeta.pl/Gielda/1,85951,6210942,Czy_Azjaci_doprowadza_do_bankructwa_USA_.html (via Google Language Tools)]