20090429

The WIG Index rallied +3.5%:



Today's rally was impressive (and also covered open gap from Monday), but we are still below the important level of 29000. Descending volume and contrary signals from oscillators are saying nothing about the future direction of the market.

We might also note a pennant or symmetrical triangle pattern on 15 minute chart:



The main difference between those patterns is usually the duration (here: pattern less than 3 weeks is usually considered as pennant; the symmetrical triangle's duration is typically about 3 months).
Nevertheless, both are continuation patterns.

Not much else can be said right now and we have to remember the market can always go both ways.

Sources:
[http://www.investopedia.com/university/charts/charts6.asp]
[http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:symmetrical_triangle]
[http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:flag_pennant_continu]

20090428

The WIG Index opened with a gap lower and eventually fell -2.45%:



The general situation has not changed and we are still in daily and weekly uptrend. The lower high on daily chart can worry, however it's pointless to make any forecasts now. The market still looks undecided and we basically have to wait for its actions.

As per weekly uptrend we have better chances going upward. Nevertheless, making any trades now can be risky and proper stop-loss orders have to be deployed, regardless of our beliefs. As small capital traders we can enter and exit our positions very fast and we should use this advantage.

20090427

The WIG Index fell -1.11%:



The general situation is still not clear. Contrary signs from oscillators and descending volume don't clarify the picture either. In those situation is the best to just wait for market action.
Also, note the potential (only potential as so far) inverse-head-and-shoulders pattern with neckline ca.29000 and left shoulder height ca.26700.

Interesting view on US debt allocation (here).

Some articles about US housing market (here and here).

Sources:
[http://seekingalpha.com/article/132960-more-cold-water-for-u-s-housing-market]
[http://seekingalpha.com/article/133152-mixed-housing-report]
[http://www.thedisciplinedinvestor.com/blog/2009/04/24/foreign-holders-of-us-treasury-debt/]
[http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:head_and_shoulders_b]
[http://www.investopedia.com/terms/i/inverseheadandshoulders.asp]

20090425 - EURPLN, CHFPLN

The EURPLN rallied over last couple of days (charts thanks to ChartStation):



The CHFPLN looks alike:



The currencies' swings are surprising as usual. The daily buy signals were generated; however, the weekly downtrend remains intact and we should not bet against the higher level trend.

As for head-and-shoulders patterns (previous post) - they are still intact (negation after crossing the shoulder's height).
The Fibo projections were altered as per charts.

Another four US banks defaulted this Friday (here). That gives 51 bank failures total since the credit crisis.

Sources:
[http://www.marketwatch.com/news/story/Four-banks-shuttered-credit-crunch/story.aspx?guid={982438DE-54E6-4F2E-84FF-FA3F1556A589}]

20090424

The WIG Index gain +2.17%:



The volume has broken from its trend, but it's still decreasing. The oscillators are giving contrary signs.

The WIG Index is in quite interesting situation, breaking the level of 29000 will generate very strong signal. Not much else can be said and we have to wait for proper market action.

The Federal Reserve on Friday evaluated the situation of the 19 largest US banks (here). However, detailed results will be published 4th May (here).

Sources:
[http://www.marketwatch.com/news/story/US-releases-bank-stress-test/story.aspx?guid={A0F3B386-D75B-4301-96DB-5315B135CB98}]
[http://www.bloomberg.com/apps/news?pid=20601103&sid=a9q8lrHiNrg4]

20090423

The WIG Index continued its rally:



We are still below last high. Oscillators are giving contrary signals and the descending volume does not confirm the rally.
However, the price is the only thing that matters at the end and the current HL & HH pattern still looks very promising. Nevertheless, we have to wait for proper market action now.

20090422

The WIG Index gain +2.22%:



Current situation is not clear: the oscillators are giving contrary clues, volume seems to be descending. Nevertheless, there is still buy signal on daily and weekly term.

There is nice summarizing of US stock earnings. Alternatively, reported earnings can be tracked be EarningsWatch.

Sources:
[http://seekingalpha.com/article/132379-most-positive-and-negative-reactions-to-earnings]
[http://www.marketwatch.com/news/markets/earningswatch.asp]

20090421

It was quite a session today, however the WIG Index gained +0.5% eventually:



The WIG Index continued its fall, however it's still well within correction limits.
Not much can be said - there is no reliable way to tell how deep we can go; however the weekly trend favor the upward moves.

For interesting US market analysis, check here.

Sources:
[http://www.marketwatch.com/news/story/Technical-cross-currents-greet-recovery/story.aspx?guid={198FEFE8-8AA8-40D8-81E5-A6B94E71CDB0}]

20090420 - 200th entry

The WIG Index fell -2.52%:



The weekly and daily uptrends remain intact.
Last several weeks have shown tremendous market strength and it is reasonable to have a pullback now. However, we have to wait for proper market action.

Welcome to 200th entry!
The blog has started 14th July (this post) as continuation from Money.pl forum "Analiza WIG20" thread (polish, occasionally updated). Totally ca.350 charts were published - mainly WIG, discontinued WIG20, EURPLN and CHFPLN.

Upon blog start, the financial crisis was well under way and the WIG Index was already in a downtrend; hopefully the market started to recover, but this is only my subjective opinion.

Current economic situation was unheard of. Economy is very global now, the fast capital changes markets very quickly and current hedge fund industry is very speculative one.
Warsaw Stock Exchange is still very young market (it finished 18 years few days ago, note in this post) and still tends to overreact on economic news; however this is something only maturity can fix. Nevertheless, Poland as a emerging market have pretty strong economy and there is large development potential. Poland is 19th country by the size of country's gross domestic product as per 2007 statistics (here).

Poland's finance sector is healthy and the house sector was not hurt so badly  in comparison to the more developed countries. Mortgage payments were hit pretty bad as per CHFPLN uptrend and this is still ongoing issue, but polish mortgage owners are rather paying their debts and there aren't many defaults.
Poland has lost many professionals due to immigration, however they tend to going back now. The immigrants are also transferring a great amount of foreign money to Poland and convert it to PLN.

Of course, there are many  internal and external issues, the average polish income is pretty low in comparison to EU standard and that does not encourage Polens to invest in stock market.
However, the living standard has been continuously increasing on fast pace; therefore, I believe Poland will eventually join the most developed countries and hopefully Warsaw Stock Market will reflect that.

As for Brian Shannon's video - unfortunately, Brian decided not to publish his video freely anymore. His blog has been shutdown (there is a link to new page, where you can order premium membership).
I would like to thank him, as viewing his videos were great way of learning.
Here is his final video from Sunday.

What we learned is not too rely on oscillators and volume too much; the Brian Shannon's saying "only price pays" is very actual. Nevertheless, the Fibo levels and patterns can sometimes provide valuable tool for target level estimation.
Another hard learned lesson was not to rely on feelings and forecasts and always have proper money management.

Sources:
[http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)]

20090418 - EURPLN, CHFPLN

The EURPLN is continuing downtrend:



The CHFPLN  generated another weekly sell signal:



Not much else can be said right now. Both currencies are in downtrend and we shall expect constant drop in price.

We also might want to draw head-and-shoulders pattern (examples) on both charts:
EURPLN: neckline ca.4.40 , target price ca.3.90
CHFPLN: neckline: ca.2.87, target price ca.2.40 (neckline here might be sloping on a slight downward angle)

However, both Fibo levels and patterns are rather guessing game in case of currencies. We should not rely on them too much.

Sources:
[http://www.chartpatterns.com/headandshoulders.htm]

20090417

The WIG Index fell -2.65%:



The general situation hasn't changed and there are no new signals. The daily sell signal will be after crossing the level of 25850.

Polish mutual funds are increasing their exposure to stock market (here).

Sources:
[http://www.holder.com.pl/fm.shtml?id=6968&fm=11154&c=34105625020 (via Google Language Tools)]

20090416

The WIG Index fell -0.5%:



It's hard to interpret market right now - RSI and CCI oscillators are giving contrary signals, volume direction is very subjective. We are near the important level of 29000 and market has to decide the direction.

As per weekly signals there is still uptrend and we might use this pullback to enter some positions. However, proper money management is very important - especially at this moment we don't want any positions without defence.

Warsaw Stock Exchange celebrates 18th birthday today (here). According to polish law that is the threshold for adulthood.
It all started in 1991 in Centrum Bankowo-Finansowe:

(Image shamelessly stolen from here)

Sources:
[http://www.gpw.pl/gpw.asp?cel=ogieldzie&ktore=014615_2 (via Google Language Tools)]
[http://www.cbf.com.pl/index.php/en/]

20090415

The WIG Index gained +0.73%:



There was no higher high (as we used to), however the general situation did not change. We are still just below important level of 29000 and we are waiting for proper market action.

US government officials are likely to release results of several financial institutions' tests (here).

Brian's video for today (here).

Sources:
[http://www.marketwatch.com/news/story/White-House-US-release-some/story.aspx?guid={2165C9C7-DE0E-4F6A-B0AA-0A61EBC2421F}]

20090414

The WIG Index gain +0.19%:



Another higher high and new weekly buy signal has been generated.

The WIG Index is near the important level of 29000, where the primary trend can be acknowledged as reversed (preferably after rebounce and strong confirmation):



S&P500 analysis from Fibonacci Queen (here) and Brian's daily video (here).
Both videos are suggesting to be defensive now.

The Baltic Dry Index seems to be recovering (here).

And some encouraging words from Ben Bernanke (here).

Sources:
[http://www.marketwatch.com/news/story/Decline-could-slowing-Bernanke-says/story.aspx?guid={0C3D6921-B2F3-4D0B-8EE8-4F8B3078D26D}]
[http://www.thedisciplinedinvestor.com/blog/2009/04/13/baltic-dry-index-moving/]

20090411 - EURPLN, CHFPLN

The EURPLN has broken the level of 4.40 (this post) and weekly sell signal has been generated:



The CHFPLN is still on support:



We have weekly downtrend on both currencies. Target prices are as per Fibo 168% level, however there is no reliable way to forecast currencies and we should not stick to those levels.

More complex EURPLN analysis (as per Elliott's Wave Theory) can be found on Lem's blog (here, chart here).

Sources:
[http://lemansa.wordpress.com/2009/04/05/fusy-na-tydzien-1509/ (via Google Language Tools)]
[http://en.wikipedia.org/wiki/Elliott_wave_principle]

20090409

The WIG Index gain +2.39%:



As we made higher high, another weekly buy signal has been generated.

Obviously, last few days are amazing; the rallies are faster and the correction seems inevitable (only subjective opinion), but yet the market is making higher highs. That just confirms saying we should trade what we see, not what we think.

Brian's video for today.

An interesting presentation about bear markets (here).

The EURPLN generated weekly sell signal:



There is no session on Friday and Monday. Happy Easter!

(image shamelessly stolen from here)

Sources:
[http://dshort.com/charts/bear-recoveries.html]

20090408

The WIG Index gain +4.56% today:



I'm not sure if we can say there was a correction yesterday. The today's breakout of 27000 has generated long- and medium-term buy signal.
The volume is decreasing and still high, but well below the volume from few days ago. RSI is neutral, however CCI shows negative divergence.

It's hard not to be bullish now, but there is nothing like everlasting rally and we always need to remember about proper money management.

The fundamentals remain weak (here) and there is a danger of coming inflation (here).

Ireland greatly increased taxes (here) - that are not good news for all polish immigrants working there.

Interesting strategy from Investopedia - Dividend Arbitrage.

Sources:
[http://seekingalpha.com/article/130080-sustainable-bull-market-unlikely]
[http://seekingalpha.com/article/130115-bail-out-for-dummies-part-i]
[http://www.rte.ie/money/budget2009/stories/2009/0407/budgetmeasures.html]
[http://www.investopedia.com/terms/d/dividend-arbitrage.asp]

20090407

The WIG Index fell -0.90%:



The Fibo 168% acted as a resistance. CCI seems to confirm the south direction and RSI is neutral as of now.
We might also want to open positions on this downward swing, but remember about proper money management and stop-loss orders.
We have to see how deep this correction will be (if any). Not much else can be said right now.

There is quite interesting analysis of year US market returns (here).

Toxic debts could total to ca.4 trillion USD (here).

The DJIA video analysis from Fibonacci Queen (here).

Sources:
[http://seekingalpha.com/article/129884-u-s-market-returns-by-year]
[http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6047929.ece]

20090406

The WIG Index gain +0.99%:



As we made higher high, the weekly buy signal has been generated. Descending volume (but still very high) and Fibo 168% might suggest retracement, oscillators are rather neutral.
Neverthless, we are still in weekly uptrend and we need proper market action to make any forecasts.
Not much else can be said before we confirm or negate current uptrend.

High-tech jobs in US suffered its deepest layoffs in seven years (here).

Sources:
[http://www.marketwatch.com/news/story/High-tech-layoffs-climb-first/story.aspx?guid={33AFAB9C-0276-4883-8F8B-E5F5009BA0B4}]

20090404 - EURPLN, CHFPLN

This week showed some volatility in EURPLN:



The rally bounced from Fibo 61.8% level and crossed the weekly low of 4.40. Daily sell signal has been generated at 4.47. Nevertheless, the breakout is still in error margin and the weekly sell signal has not been generated yet.

The CHFPLN looks alike:



Daily sell signal has been generated at 2,92. The current price is near the level 2.84, but, similarly to EURPLN, weekly sell signal has been not generated yet.

Both currencies remain in downtrend. The charts are showing the projected 168% retracement from last swing, however, note that it's just the guessing game and we really should focus on trend following.

The European Central Bank, reduced Thursday its key interest rate to 1.25% (here).

Sources:
[http://www.marketwatch.com/news/story/european-central-bank-cuts-rate/story.aspx?guid={A4E741C0-0EDA-47DE-A69F-2814DDDF4FE2}]

20090403

Another rally today (+2.21%):



As the market broken last weekly high, another long-term buy signal has been generated. Big volume and rising oscillators (but note the lower low in RSI) are confirming the rally.

The WSE is amazing for last few days. After such a rallies it's rather likely to retrace at least part of this swing, however nothing suggest correction now.

20090402

Today's rally was more than impressive:



Record high volume (second only to 16th Jan) and big price gain (+5.97%) are encouraging.

Nevertheless, from technical point of view, not much have changed in general situation - the medium-term (daily) buy signal would be generated above 25700.

Nevertheless, today's results look impressive:



Today's term of day from Investopedia - sucker rally. Hopefully not, but always mind to follow proper money management principles.

Brian's video for today.

There are some initial news from G20 economic summit in London (here or here).

Sources:
[http://www.marketwatch.com/news/story/Sarkozy-Merkel-praise-Obamas-G20/story.aspx?guid={F16448A6-C6EC-473E-B94E-35574FFE18C0}]
[http://online.wsj.com/article/SB123868021679482457.html]
[http://www.investopedia.com/terms/s/sucker-rally.asp]

20090401

The WIG Index gained +0.46% today:



Not much can be added to yesterday's post - we just need for proper market action. Long-term and medium-term system's signals suggest uptrend continuation.
However, note the long-term has been reversed by system, but in my subjective opinion we should cross 29000 before we can say the main trend has been reversed.

General Motors can fill for bankruptcy (here or here).

Brian's video for today.

Sources:
[http://www.marketwatch.com/news/story/Ford-GM-March-sales-drop/story.aspx?guid={BF094BE8-768D-46E7-8F23-7C105B521DA8}]
[http://www.marketwatch.com/news/story/obama-views-bankruptcy-likely-gm/story.aspx?guid={2219C807-D793-4C61-A001-3E7095472C8F}]