20081122

Holidays were too short (as always), but it's time to get in touch with the market again.

WIG index has realized the intraday head-and-shoulders formation from this post and definitely lost its momentum, generating sell signal and medium-term (daily):



Ith WIG Index is currently near the yearly low (24125) - crossing it will generate clear sell signal. However, note the positive divergences in RSI and CCI charts. All alternatives are always possible (double bottom for example), thus don't stick to any forecast - price will tell us eventually. Crossing 29600 (weekly high from 4th Nov) will generate long-term buy signal.

Situation in EURPLN didn't change to much in weekly timeframe since last entry. We are still in uptrend with extreme volatility:



CHFPLN has similar situation, but the two week's peaks has been formed:



Crossing 2.5659 will give us medium-term (weekly) buy signal and crossing 2.3084 will give us sell signal (and potential reversal in medium-term uptrend). Nevertheless, we shall be considering monthly peeks here to have a clear trend reversals.

The LIBOR CHF has drastically dropped after interest rate cut (here), which is good news for polish mortgages:



The S&P500 shows us very disturbing picture:



Technically speaking, double tops formation has just 17% failure rate after breakout (Encyclopedia of Chart Patterns, T.N.Bulkowski) and that's scary. However, I don't think we can say there is clear breakout now (3% margin rule). Crossing the low (768) from 2002 is strong sell signal. I would rather wait for stronger breakout - there is no rush, this formation has over 10 years and huge potential move, we can wait for clear confirmation before shorting this index. See video from Brian Shannon (here).

JP Morgan has been catched on manipulating the polish market (here via Google Language Tools). It seems that 108000000 PLN is enough to alter the WIG20 Index by 4.17%. Let's take a look at future contracts then:



I just wonder how this issue will progress..

Sources:
[http://www.bankier.pl/wiadomosc/KNF-zawiadomila-prokurature-przestepstwo-na-fixingu-Za-zleceniem-stalo-JP-Morgan-Securities-1867125.html (via Goolge Language Tools)]
[http://www.knf.gov.pl/Images/KNF fixing 21.11.2008_tcm20-9403.pdf (polish)]
[http://www.fxstreet.com/fundamental/market-view/daily-market-report/2008-11-20.html]