Looking at the current level, it coincides with the downward sloping trend line from the previous 2 tops. Also is approximately the 61.8% level from the highs to the lows in 1995. The price action is sandwiched between the 20 + 200 monthly MA and the 1150 level. This month would have to end above 1150 level this month before it runs into another major level at the 50 MA which is approximately the 50 monthly MA. The price will have a massive break up or down over the next few months. We are currently down 0.80% for the month however, that is basically flat on this time frame and since there is still 15+ trading days left.
This is another example that shows that technical analysis creates a compelling picture of trend lines and moving averages that simply seem to align very well.
One more scenario to look at.
This is a possible triangle that is forming that could last until mid - 2014, it would imply that we are going to have a struggling economy at least for the next 3-4 years. The reason is that there is a definitive cap on upside potential as that top cyan line should not break. It would also implies that there is a definitive bottom that has formed until this triangle is broken.
It could be a stretch however, I will continue to look at this scenario and hopefully I remember to post updates if the triangle has been broken, which could be this month if the markets continue to the upside.
Lastly.....A little Japanese Market Intervention to start the day
Literally 100 points in 3 minutes.
It is my continued belief that a currency war / crisis may breakout as lower currency = greater exports and that is what everyone is banking on as their way out of the global recession. However, high unemployment in the US will continue to squeeze import demand.
Needless to say with where we are with the markets and where we are with the fundamentals of the global economy, an interesting time lies ahead over the next few months and years.
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