Was Friday’s world-market rally serious and sustainable, or simply a knee-jerk reaction to Japan’s surprise NIRP (negative interest rate policy) announcement (including some shorter-term short-covering action) and “end-of-month window dressing” by fund managers?
Perhaps the following update to my last post will provide some further insight into that question, as I review a variety of markets.
YM, ES, NQ, TF and NKD E-Mini Futures Indices:
The following Daily Heikin Ashi candle chartgrid of these E-mini futures indices shows a potential bullish reversal pattern as of today’s close. We’ll need to see a higher closing candle on Monday to confirm that a continued rally is possible.
The following Weekly Heikin Ashi candle chartgrid of these E-mini futures indices does not yet show a bullish reversal pattern. However, the NKD (Nikkei E-mini Futures Index) has paused in its downtrend, so it’s hinting of a possible turnaround. We’ll need to see how next week closes before rendering a position on a weekly timeframe.
The following Monthly Heikin Ashi candle chartgrid of these E-mini futures indices shows that bears retreated by approximately one-half during January’s drop. From this point, anything’s possible for February…this timeframe doesn’t indicate in whose favor price may travel.
Dow 30, S&P 500, Nasdaq 100, Russell 2000, Nikkei & Shanghai Indices:
The following Year-to-date percentage gained/lost graph of these indices shows that all of them are in the red, so far, this year. The S&P 500 has lost the least, while the Shanghai has been the weakest, followed by the Russell 2000, Nasdaq 100 and Nikkei.
These four weakest indices, especially China, will need to show leadership in making gains next week, if we’re going to see a meaningful rally by equities, in general.
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