General Indices

By, James A. Hyerczyk After straddling the Autochartist Key Levels support level at 4134.00 for several 30-minute time periods, it looks as if the Australia200 (AUS200) index CFD has finally succumbed to selling pressure and is poised to break sharply. If downside momentum can continue then this index CFD will likely reach the Autochartist forecast price zone at 4111.19 to 4079.84 over the near-term. When using the Autochartist Key Levels trading tool to gauge the sentiment of a market, traders should be aware that although the signal is based on a simple trading premise, it is suggested that other conventional forms of technical analysis be applied so that one can gain clarity and trade with more conviction. It helps if one knows the dominate trend of the market, for example. In addition, traders should be aware of the position of one or more overbought/oversold oscillators. Applying other price indicators also helps as they sometimes form clusters with the identified key level. Finally,...

By, James A. Hyerczyk A successful test of slightly below 8378.04 by the Japanese 225 (JP225) index CFD led to the formation of a short-term support base. This helped finish an emerging channel down chart pattern on the 60-minute chart. Autochartist is projecting a possible rally from this low level, but since the initial trend was down, traders should watch for a possible reversal signal rather than the usual continuation move. The quality of the chart pattern is rated a slightly above average 6-bars. The initial trend rating, which measures the strength of the trend prior to the chart pattern’s formation is a below average 3-bars. The 7-bar uniformity rating means that the chart pattern contains a greater than average amount of equidistant tops and bottoms. The quality indicator looks for trading “spikes” and “gaps”. The solid 8-bar rating indicates the absence of such disruptive pattern phenomena. The channel down chart pattern is a trending pattern. The wide parallel lines created by the...

By, James A. Hyerczyk When the FTSE opened, all eyes were probably on a pair of potential support levels at 5353.55 and 5287.86. Tuesday’s weak close put the market in a position to test these two levels early, but it was going to be up to follow-through momentum to actually fuel a break down to these levels. Short-term oversold conditions probably led to the choppy two-sided trade early in the session, but that eventually gave way to a series of lower-highs and lower-lows which eventually drove the market to the low of the day at 5366.80. Based on the short-term range of 5075.20 to 5631.90, bearish traders were most likely trying to drive the index into 50% of this range at 5353.55. A failure to hold this level would have meant further downside action. The premature bottom indicates that selling pressure dried up, giving short traders an excuse to cover their positions while the crowd was waiting inside of the retracement zone. Combined...

By, James A. Hyerczyk Following a prolonged move to the downside in terms of price and time, the United Kingdom 100 (UK100) index CFD reached an oversold level, triggering a quick turnaround. The channel down chart pattern that formed on the 30-minute chart with a top at the resistance level at 5470.24 became an emerging pattern when the market made its final bottom on the support level at 5366.80. The quality of the chart pattern is 6-bars. The 8-bar initial trend rating is a solid indication that the market could move higher especially since Autochartist has identified this as a continuation move. The purpose of the initial trend is to measure the strength of the trend prior to the formation of the pattern. The uniformity indicator looks for equidistant tops and bottoms as well as measuring the strength of the touches of the support and resistance levels. This indicator is rated an average 5-bars. The clarity indicator is also rated 5-bars. This...

By, James A. Hyerczyk A late session sell-off thrust the Australian 200 (AUS200) through the support level of an almost perfectly drawn descending triangle chart pattern, setting up the index CFD for a potential break into the Autochartist forecast price zone at 4133.22 to 4085.22. The quality of the chart pattern is an above average 6-bars. The initial trend which measures the strength of the market prior to the formation of the chart pattern is rated a slightly below average 4-bars. The uniformity indicator is the highest rated quality indicator. It looks for equidistant tops and bottoms as well as measuring the number of touches of support and resistance. Its 9-bar rating suggested that support was a key area to watch so the breakdown through it carries some weight. The descending triangle chart pattern is a non-trending pattern. Its support line is usually relatively flat, but when combined with a down-sloping resistance line, creates an apex that almost pinpoints the next breakout. It...

By, James A. Hyerczyk A gap-lower opening led to renewed selling pressure which forced the Germany 30 (DE30) through the support line of a triangle chart pattern on the 240-minute chart. Based on the Autochartist projection the index CFD is likely to reach a forecast price zone identified as 5615.97 to 5345.02 over the near-term. The overall quality of the chart pattern is an average 5-bars. The initial trend which measures the strength of the trend prior to the pattern’s formation is rated 7-bars. The uniformity indicator looks for equidistant tops and bottoms as well as measuring the number of touches of support and resistance. The triangle chart pattern is a non-trending pattern. The compression of the support and resistance lines typically pinpoints the start of a breakout. In this case, it is a continuation move to the downside. The Autochartist breakout rating is an average 5-bars which means it is going to take additional momentum to drive this market lower. There may...

By, James A. Hyerczyk The Australian 200 (AUS200) index CFD formed a rare Gartley Fibonacci pattern on the 240-minute chart. The Gartley Fibonacci pattern is a reversal pattern that can appear in all time frames. This pattern is usually formed near important support or resistance levels such the 50 percent level of a major range. Once this pattern is confirmed, it typically reverses into a series of Fibonacci retracement levels. The pattern that has set up is known as a bullish Gartley. It may not look bullish because of the lower-bottoms and the lower-top. However, this scenario actually helps form the reversal point at D. From this point, the market is expected to trade higher. The pattern may look complicated but actually is created by precise measurements of price and time. Once Point D was identified at 4164.00, Autochartist was able to forecast a potential retracement of the break from the Point C top at 4324.50. These forecast price levels range from the...

By, James A. Hyerczyk The US2000 index CFD broke through the Autochartist Key Levels support level, triggering the start of a potential break into the forecast price zone at 697.52 to 659.22. Traders should note that on the way up, the market accelerated through this same price level at 725.10 on the 60-minute chart. The lack of follow-through to the upside and the subsequent sideways action indicates a distributive pattern may have been taking place. This is a particularly bearish pattern and it often leads to an acceleration to the downside as traders scramble to liquidate their long positions. When trading a breakout pattern like the one suggested by Autochartist Key Levels, a trader has to always be aware of momentum and volatility. Both of these indicators are necessary to drive the market lower when the market breaks through support. This usually means that tight stop loss protection will be necessary. Without volatility to push prices lower, a market will often linger...

By, James A. Hyerczyk After a short-period of sideways trading action buyers took over, driving the GBP/USD through the downtrending resistance line of a triangle chart pattern on the 240-minute chart. The size of the candlestick on the breakout was relatively large enough to suggest the presence of a strong buyer. The overall quality rating is an average 5-bars. The initial trend which measures the strength of the trend prior to the chart formation is a low 2-bars. The uniformity indicator measures the number of successful tests of support and resistance as well as the presence of equidistant tops and bottoms. This indicator is rated average. The clarity rating is a solid 6-bars. It looks for “market spikes” and “trading gaps” which can disrupt the flow of the chart pattern. A rating greater than 5 puts it in the above average category. The triangle chart pattern is a non-trending pattern. The key characteristic is the gradual narrowing of the support and resistance lines....

By, James A. Hyerczyk When the Swiss 20 (SWI20) index CFD formed Point C at 5819.00 on the 240-minute chart, it completed a 3-Point Extension Fibonacci pattern. On this chart this is a topping formation that may lead to a retracement of the rally from Point B at 5305.00 to Point C at 5819.00. The 3-Point Extension Fibonacci pattern contains parts of the basic ABCD Fibonacci Pattern. It is often described as a countertrend pattern since the forecast projects a move in the opposite direction of the main trend. It is also often confused with the 3-Point Retracement Fibonacci pattern. This pattern forms the same ABC market swings except Point C is lower than Point A so that the formation creates a lower-bottom and a lower-top. The 3-Point Extension Fibonacci pattern shows a strong trending market since Point C is higher than Point A. With the formation of Point C and the subsequent minor sell-off, Autochartist is forecasting a correction into a series...