The Market Technician

  Hang Seng Index (HSI) Facing Downtrend Pressure What are we expecting? Hang Seng Index (HSI) fell below its key support level at 28,000. This break is more significant than usual as HSI has just experience index being halted at 31,000 level, and mounting Supply as indicated by our proprietary FFI (Fund Flow Index) indicator.  These actions suggest the index is in a Distribution Phase, entering Mark Down phase. First level of support for HSI will be at 26,000 area cushioned by high volume area and 1.618% Fibonacci level. Who should be concerned? Investors: Investing in the Hong Kong Market may reduce position at this point but also keep a lookout for stocks that show signs of bottoming during the Mark Down process. Traders: Taking short positions is preferred till 26,000 target reach or character of accumulation phase is observed.  Why the Mark Down? Stock market is always forward priced, we will not be able to clearly define the reason till 3-6months later. One marco trend that

 Expecting Further Upside for Tencent (700:HK) Expecting further upside after Tencent leaves Re-accumulation Phase (Trading Range) possibility entering in Mark Up Phase. Over the Re-accumulation range, stock showed the transition from supply dominated action to weakening of supply to demand dominated action. Stock is trading relatively stronger than the broad market ( RS above zero), indicating strength in demand for the stock. Price trading below $550 level will falsify the Mark Up Phase analysis and stock will reenter trading range. Disclaimers apply

This coming Tuesday, 13 Oct 20, we will sharing with the trading community how we apply Wyckoff Methodology trading the markets and how this hundred years old technique continues apply in our current market conditions.

  Gold is expected to see further upside with 1st resistance at 1955, also a key resistance for gold, as the level being a previous consolidation area.   We can expect further upside when gold breaks above 1955 with first resistance at 2000, next at 2089, previous high.   The breakout is favored by Wyckoff traders as supply eased with demand building up , which lead to our FFI reading improving and turning positive .   On the macro end, probable new stimulus and a dovish US FED policy favors gold trading higher. Price trading below 1875 will falsify our analysis *Blog Disclaimers apply.

Bullish Expectations Continues for BTC There are many techniques written on price action (price and volume analysis). Wyckoff Method is one of techniques that relates price action with demand and supply.  New to TA trades may be shaken out of the trade after observing the wide red sell off candle (or bar), bearish engulfing pattern. However, Wyckoff principles denotes the action as bullish. Compared to the previous wide green candle, where he volume is large but the red wide sell off volume is about just half which translate to weak supply. Thus, despite BTC is currently trading in range, demand and supply continue to suggest Demand > Supply. Expectations remains on the upside. But as Wyckoff traders, we are always on the alert for any incoming supply. 10,500 is our downside pivot. Cheers.

Richard Wyckoff Method is a comprehensive market analysis technique that consist of laws, market structure (cycle) principles and trading approach.  There are many technique and strategies that track and analyse trends but few analyse the range itself that produce the trend.  Coupled with the core Law of Supply and Demand from Wyckoff Methodology,  BTC showed that Supply has weaken and Demand gaining strength , in line with our Fund Flow indicator (FFI) observations.  After testing supply in phase C, we expect demand to continue building up from here and enter in Phase D, where we are likely to see a breakout of the range, 10,000 as breakout level (Creek).  Despite strength in demand, we continue to be open-minded and watch for any sign of supply.