Posts Tagged ‘Fibonacci Correction’
MAN Frankfurt, a Long-Haul Upwards Rolling Convoy
MAN, the famous Trucking Industry manufacturer, has been on a roll since the end of February. It has gone up over 25% already and all valves are still in motion. I say this because the Monthly Chart indicates a “Three Wooden Soldiers” Japanese Candlestick pattern that is very bullish and shows usually as an indicator for more upwards movement.
Check out the Daily Chart below. It shows the current trend, intact and inside an almost perfect upwards tunnel. It also shows that MAN has passed an s/r line recently and retested it successfully. The Monthly Chart shows the candlestick pattern I spoke of and the height of the soldiers themselves speaks volumes about the strength of the signal the soldiers are making. It also shows that the 38.2% Fibonacci correction level has been passed and there is clear sailing, more or less, on a monthly level.
This is the way the Daily Chart looks:
This is the way the Monthly Chart looks:
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The World Dollar Index
The way the technical smell of the US Dollar is, one may not want to take a bite of it–not appetizing at all. Even though there has been a strong recovery in the dollar worldwide, as seen by the Dollar Index, which measures the US Dollar against all foreign currency, there are signs of a change back to the downwards days of the last 2 years. The price has yet to conclusively prove itself above the 80-81 level and see-saws on or below it. It has reached but is not successfully passing the Fibonacci 38.2% mark and it is leaning hard on its trend line.
In addition, the MOM indicator and Volume indicator show a negative divergence the last 3 weeks, a sure sign of trouble. When the MOM and Volumes drop while the price continues to rise, that is a strong sign that the continuation of the rising prices may be a false hope.
I do not say that the Dollar is in danger, I just warn of some kind of correction is most probably coming its way.
This is the way the Chart looks:
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Recent Developments in the World Scene
As one looks around the global scene, as reflected by the world market indices, with a learned eye one can see that the major markets — S&P 500, CAC 40, DAX, FTSE, and the Nordic and Far-Eastern, also the Brazillian are, mostly on the monthly charts, starting to somewhat hug their upward trend lines. This, to me, shows somewhat of a weakness in the world markets. Most analysts fundamentally say that there might be a cretain pullback in 2010 and that is what I’m driving at with this analysis. Maybe not in the close future, but in the few months ahead we may see a world-wide correction for all the enormous and tremendous unrelentlessly upwardly lifting thrust of the current recovery phase. I have not mentioned it in previous articles, but it now somehow seems appropriate.
Check the S&P 500 at a major monthly resistance:
