This week I am writing my report from Q1 on the Gold Coast (Australia) … enjoying the ‘beautiful one day, sunshine the next’ Queensland rain!!!! We are here for our 4th Platinum Super Traders conference for 2007.
Another week of declines in stock markets around the world. Last week I wrote about the Australian Stock Index: “if it trades below 5914 expect the market to continue its decline into longer term cycle lows” … and that Tuesday, August 14 was a reversal day!
Here is an overview of what has happened in the world markets:
CAC High 6168, dropped 930 points (15.4%). Support is at 4565, resistance is at 5693.
DAX High 8152, dropped 961 points (11.8%). Has a double top March 2000 and July 2007. Support at 6661, 6437 and 5170, resistance is at 7723 and 8152.
DOW High 14022, dropped 1504 points (10.7%). Support at 11940, 11750 and 10445.
FTSE High 6724, dropped 932 points (13.8%). Major support at 5576 and 5016.
Nikkei High 18300, dropped 3035 points (16.6%). Major support at 14046.
S&P High 1556, dropped 185 points (11.9%). Double top March 2000 and July 2007. Bounced off major support at 1381 (low at 1371).
XAO High 6469, dropped 987 points (15.1%).
My bias is still that most markets are moving into their longer term cycle declines and lows. People will start to buy stocks at what appears to be low prices (compared to the recent highs) only to see a short rally before continued declines. This is a time in the markets to be smart and to analyse the individual stocks to decide whether to buy or not. As I have said many times in my stock market workshops, any mug can make money when markets are rising; few keep it in the declines. These next few months will be a test to see how many people can keep their profits.
I have noticed that many world indices have fallen below their primary cycle commencement price; this is a strong indication of a bear market in play. The next signal we need to watch is if these markets can recover their falls and take out the previous cycle high – if they can’t then the following declines will be greater than what we have just experienced (that is my expectation).
As far as the Australian All Ordinaries Index goes, our huge ranges and volatile swings are not over yet. When the fall took out the previous 22-week Primary Cycle low at 5627 it gave us further confirmation that we are entering a full on bear market and setting up for further decline into the 18-year cycle trough.
August 21/22 (Tuesday/Wednesday) is a very strong reversal date and if the market fell into this period then it could give a strong short term rise. However my bias this week is a short rise Monday and Tuesday and reverse again Wednesday.
Resistance levels for a rise this week are 6013, 6188 and 6250, major support is at 5043, 4568, 4092. and ... Minor reversal dates are August 21/22, August 31 & September 4.
Next report out on Monday, August 27. If you have missed my past reports you can read them on my blog http://davidschirmerxao.blogspot.com/
UPCOMING SEMINARS:
- 2-day Born Rich … a MUST attend for every single person … teaches exactly how The Law of Attraction Works and how to use in every part of your life (including money!) September 22-23, 2007 www.YouWereBornRich.com.au
- 2½-day Profession Traders Workshop … learn how to leverage successfully, trade CFD’s and short the market to make money from these declines! November 22-24, 2007. Call Darren on 0438-887-094 or Paddy on 0413-844-321.
Yours in abundance,
David Schirmer
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Terminology
CAC The CAC 40 index is the main benchmark for Euronext Paris (France).
DAX DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange.
DOW The Dow Jones Industrial Average (The Dow) is the main stock market index for the New York Stock Exchange (USA).
FTSE The FTSE 100 Index (or just the FTSE, pronounced footsie) is a share index of the 100 most highly capitalised companies listed on the London Stock Exchange. FTSE is an abbreviation of 'Financial Times Stock Exchange'.
Nikkei Nikkei 225 is a stock market index for the Tokyo Stock Exchange (Japan).
S&P The S&P 500 is an index containing the stocks of 500 Large-Cap corporations, most of which are American, from both the NYSE and NASDAQ Stock Exchanges (USA).
XAO The All Ordinaries (colloquially, the "All Ords"; also known as the All Ordinaries Index, AOI) is the main index of shares for the Australian Stock Exchange.
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