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Saturday, May 12, 2012

The BSE 30 - Ichimoku Study - Week: 07 May to 11 May 2012 - Kijun Sen Folds..



.....Regulars can skip below and go straight to the chart......


Introduction:

We do a weekly Ichimoku study, to complement our 'Triple Screen Technical Analysis', of the markets that we track, in our quest to master Technical Analysis.

When taking the 'weekly' time frame, to use the Ichimoku Cloud, we need to consider the following..

The standard settings for an Ichimoku Kinko Hyo chart are 9, 26, 52 and are used on EOD charts.  
When Ichimoku was created back in the 1930s, a trading week was 6 days long.  So we have one and a half week(9), one month(26) and two months(52). 
Now that the trading week is 5 days, we should actually use 7,  22 and 44 instead. 
However, the majority of systems, worldwide, still use the old settings 9, 26, 52. 

We need to study markets, on a weekly basis on this Blog.  
How do we fit 52, 26 and 9 into that need?  With one candle being one week?
There are 52 weeks in a year, 26 weeks form two quarters (or a half year) and 9 weeks equal about 2 months.  Fits the old logic - albeit differently.
Presto, we have a longer term view with the same settings!

So, if you like to move off the beaten track, for a change... do read on...


Quick Reference : 
Chikou Span - purple line,
Kijun Sen - blue line, 
Senkou Span A - black line, 
Senkou Span B - grey line, 
Kumo - grey shaded area,
Tenkan Sen - red line.


Useful resources (free) from the Web:



BSE 30: Medium Term View (or) Week Chart (or) EOW with the Ichimoku Cloud:  
The BSE Sensex 30 - End of Week Chart - 11 May, 2012.  

Last 7 Signals seen on BSE 30 - Week Chart (EOW) marked on chart above:
1. Senkou Span Cross: Strong Bearish Signal (S)
2. Chikou Span Cross: Weak Bullish Signal (C)
3. The Kijun sen cross: Weak Bullish Signal (K)
4. The Flat Kumo: Bullish Signal (Ko)
5. The Tenkan Sen/Kijun Sen Cross: Weak Bullish Signal (T)
6. The Kumo Breakout: Bearish Signal (B)
7. Chikou Span Cross: Strong Bearish Signal (C)



From the Chart as marked...
3. After Supporting the Price for 7 odd weeks the Kijun Sen gives way - setting up last week's fall.
4. Tenkan Sen is fast approacing the Kijun Sen, for a cross that could be a Strong Bearish Signal.
5. The MVWAP 34 which was broken last week, acted as the resistance this week.
6. The Chikou Span is close enough to the price to cross it anytime, to give a Weak Bullish Signal.
Incidentally the Flat Kumo (Ko) effect is absent from last week on..




Conclusion: 
Bears have taken over this screen totally.



The Dow 30 - Ichimoku Study - Week: 07 May to 11 May, 2012 - Yo Yo at the Tenkan Sen.



.....Regulars can skip below and go straight to the chart......


Introduction:

We do a weekly Ichimoku study, to complement our 'Triple Screen Technical Analysis', of the markets that we track, in our quest to master Technical Analysis.

When taking the 'weekly' time frame, to use the Ichimoku Cloud, we need to consider the following..

The standard settings for an Ichimoku Kinko Hyo chart are 9, 26, 52 and are used on EOD charts.  
When Ichimoku was created back in the 1930s, a trading week was 6 days long.  So we have one and a half week(9), one month(26) and two months(52). 
Now that the trading week is 5 days, we should actually use 7,  22 and 44 instead. 
However, the majority of systems, worldwide, still use the old settings 9, 26, 52. 

We need to study markets, on a weekly basis on this Blog.  
How do we fit 52, 26 and 9 into that need?  With one candle being one week?
There are 52 weeks in a year, 26 weeks form two quarters (or a half year) and 9 weeks equal about 2 months.  Fits the old logic - albeit differently.
Presto, we have a longer term view with the same settings!

So, if you like to move off the beaten track, for a change... do read on...


Quick Reference : 
Chikou Span - purple line,
Kijun Sen - blue line, 
Senkou Span A - black line, 
Senkou Span B - grey line, 
Kumo - grey shaded area,
Tenkan Sen - red line.


Useful resources (free) from the Web:



DJI 30: Medium Term View (or) Week Chart (or) EOW with the Ichimoku Cloud: 
DJI 30 - End of Week Chart - 11 May 2012  
Last 6 Signals seen on DJI 30 - Week Chart (EOW) marked on chart above:

1. Senkou Span Cross: Neutral Bullish Signal (S)
2. Chikou Span Cross: Strong Bullish Signal (C)
3. Tenkan Sen/Kijun Sen Cross: Neutral Bullish Signal (T)
4. Kumo Breakout: Bullish Signal (B)
5. The Flat Kumo: Bearish Signal (Ko)
6Tenkan Sen Cross: Weak Bearish Signal (minor signal - see arrow)


From the Chart as marked...
1. We notice that for the last half dozen odd weeks, the Weeks candle has played yo yo with the Tenkan Sen. The gravitational pull of the Flat Kumo, is therefore evident. 
2. EW Oscillator is ticking towards minus regardless of the Yo Yo played above.





Conclusion: 
Bulls continue to dominate this screen. 
Bears need to Keep Index below the Tenkan Sen, to have a chance of taking this one over. 
Playing Yo Yo perpetually, will not help the Bull Cause. 



S&P 500 - Triple Screen 'Technical Analysis' - Week: 07 May to 11 May, 2012 - One for the Bull & One for the Bear !



Learnings from the Past Week:
Our view 'Looking Forward' into the past week, was that the EOD channel (yellow), should hold the price action (click).
We had an Intra week EOD analysis (click) which confirmed this.
The EOD channel (yellow) held the price line...that was One for the Bulls.
The Bears however did break the White Week Channel -so One for the Bears.
Is it 'come back' time for Bulls? or would the Bears press the Down Button next week ?
Lets weigh the options...





S&P 500: Long Term View (or) Month Chart  each candle is 1 month's price action  (or) EOM Chart:
S&P 500 - End of  Month Chart (EOM) - 11 May, 2012. 
We start with the EOM - Almost 4 years Data is held in the channel shown above.
We have moved to candle chart - to see this month's evolving pattern better.
The highlighted candles show the 'Three Inside Down" in progress - first discussed, end April 2012 (click). 
Price has slipped below the 5 EMA.
Bulls are on top on this long term chart - but its a shaky existence below the 5 EMA. 
We zoom in for a closer look, with the EOW charts as below.....




S&P 500: Medium Term View (or) Week Chart, each candle is 1 week's price action (or) EOW Chart:  
S&P 500 - End of  Week Chart (EOW) - 11 May, 2012.
We look at the EOW - which houses 3 Quarter's data in the white channel, shown cutting across the RBG Month Channel.
The medium term screen, screams Bear - for now.
The White Week Channel gets broken, most short term MAs are crossed bearishly.
The last three candles almost make a 'Three Outside Down'
To close back inside this channel, would be what the Bulls would want here.
To see if that would happen - lets zoom in closer with the EOD charts below...





S&P 500: Short Term View (or) Day Chart where each candle is 1 day's price action (or) EOD Chart:  
S&P 500 - End of  Day Chart (EOD) - 11 May, 2012.  
Data from Mid March 2012, is captured for analysis, in the yellow EOD channel above.
As anticipated last weekend - this channel held the price action.
Price is still below all short term MAs we watch, and they are all bearishly crossed.
The histogram has started ticking towards the plus.
This screen just about makes it into the Neutral zone.





Looking Forward into next Week:
Holding the yellow channel on the EOD, the Bulls should attempt the MVWAP 34.
Keeping the Bulls away from a retake of the Week Channel, would keep the Bears in Business.
The positive divergence on the EOD - MACD histogram (yellow arrow)- gives the Bull some hope.
Intra Week Updates as warranted - shall be up.