Happy New Year 2014!
My Market Wrap-Up for 2012 can be found here.
Although I stopped trading in July of 2013, I was curious to see how the year ended and thought I’d share the results of my review.
The following graphs and charts show the gains and losses made in a number of world markets for 2013. They will be shown without individual comment, as you can see at a glance where the outliers are (which ones made the most losses or gains) and where support and resistance are.
Because the Nikkei made an astounding 56.72% gain for the year, I’ve shown the following Weekly chart of the NKD. You can see that price hit a major Fibonacci confluence resistance zone last week and has stalled just below around 16000.
Furthermore, the USD/JPY forex pair is approaching a major downtrending resistance line, as shown on the following Weekly chart. Price is currently caught up in a previous level of support around 104.00.
I’d suggest that a close watch be kept on 15000 on the NKD (where there are thin volumes on the Volume Profile shown on the right side of the chart) and 101.00 on the USD/JPY pair, as a drop below could spark a major sell-off that may affect some large foreign investors in the Japanese markets. As a consequence, those investors may have to dump any US-held stocks to cover potential major losses. We’ll see how long the Japanese government and Central Bank can continue to buy into their stock market and who gets left holding the bag when they decide to take profits. In the meantime, we may see choppy movement in between 15000 and 16000 on the NKD and 101.00 and 104.00 on USD/JPY…whether that choppiness affects the US markets remains to be seen.
No doubt the usual “Sell in May” will be on traders’ minds as the markets progress through the year, as the Nasdaq 100 either continues its trek toward it’s all-time high of 4816.35 or chops around its current major resistance level of 3600 (5132.52 and 4200 for the Nasdaq Composite) as shown on the following two Weekly charts.
This year may be the Year-of-the-Bubble for the Nikkei, the Yen, and the Nasdaq…time will tell whether this happens, and we’ll see the extent of any damage.
I wish you all much peace and prosperity in 2014.