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Tuesday, 20 December 2016

DOW: Next it's Down!

Patterns repeat. Share prices have hit a zenith and the next movement will be down.

Wednesday, 14 December 2016

ALIBABA to break out of down-swing

 This week ALIBABA must break through either the Resistance Line of the downswing or the Support Line of the uptrend. I guess the Support Line will hold and the next swing is upwards. It could be an upswing of 20%, if the green trend arrow is followed.

Thursday, 8 December 2016

EIRL ETF basket of Irish shares shaken by BREXIT

While many of the leading Irish companies in the EIRL basket have an international footprint, the upward slope of the ETF from 2012 to June 2016 (if we leave out the excessive exuberance of 2014) closely matches the growth of the Irish economy in that period.

Anxiety over the BREXIT referendum flattened the top of the chart in the months leading up to the referendum, and the shock of the result caused a severe slump in prices, which have been recovering since.

The Irish economy continues to grow strongly. Official estimates for the growth of the economy over the next five years at three per cent per annum, in line with with the projected growth in population, somewhat restrained because of fears of the effect of Great Britain leaving the EU, indicate that the tentative upward slope of the share prices will continue and we will soon see a break-out from the BREXIT inspired downtrend.

Monday, 14 November 2016

Dow Jones over 5 presedential terms

The chart maps the progress of DOWI   (The Dow Jones Industrial Average Index , blue) against US GDP (green) and National Debt (red) over the last 5 presedential terms. (Click on the chart to enlarge it).

Economic growth was steady under Reagan and the first Bush and accelerated under Clinton, but with "irrational exuberance" in the stock market .

The second Bush saw the collapse of the Dot-Com boom and the later banking crash. Obama's QE (Quantative Easing)  and ZIRP (Zero Interest Rate Policy) saw a recovery in the market, resumed economic growth, but spiralling of the National Debt. GDP and DOWI  seem back on track, but taxation is needed to reduce the National Debt.

 DOWI has risen far enough for the moment and should ease back towards the blue dotted support line.

Friday, 14 October 2016

GBP/EUR sunk too low

At the end of 2015, GBP soared to €1.42, on the back of better economic performance than Europe. This was too high for Britain's terms of trade, and Bank of England welcomed the fall in value of Sterling as the date of the Brexit Referendum approached.
Of course, it was thought that Britain would vote to remain and that the pound would bounce back.
Now sterling has fallen so low that British trade is adversely affected. Certainly, its exports are competitive, but its costs are too high and consumers' spending power has been squeesed dry.
No changes have yet been made to the treaties. Politicians are behaving badly: saying bad things, threatening disaster. However, in the heel of the hunt, both Britain and Europe will want to optimise trade between the two zones, and he eventual paperwork will be benign. In the meantime, Bank of England will have to defend the pound, including increase sterling interest rates.

Thursday, 1 September 2016

NASDAQ may have hit a peak

The top of the NASDAQ curve has flattened off, making it doubtful if it is going to rise any further. Perhaps share prices will ease back in anticipation of a FED rate rise later in the year. I expect a downswing now and wait to see if it will be big enough to drag the index into a down-trend.

Tuesday, 23 August 2016

EUR/USD wedged

The Euro is wedged in between a flat Resistance Line and a mildly rising Support Line. It is likely to dip back to the Support Line now, but what will happen next? It must break through either the Support or the Resistance in the not too distant future. Perhaps the imminent rise in FED interest rate (which punters apparently expect by December) will be enough to push the graph down through the Support.

NASDAQ in steady uptrend now

Nasdaq strikes a stable uptrend, only mildly threatened by a FED rate hike. Expect a flat top till it hits the bottom of the green Current Range.

Wednesday, 17 August 2016

GBP/USD: Is this the Bottom? EUR/USD continues up

Great Britain has not left the EU.
No changes have been made to the treaties, and when the changes are eventually negotiated, very little in the way of trading arrangements will be altered.
However, after the referendum went the wrong way, British and European leaders hopped around like headless chickens, and capitalists pulled massive amounts out of the British economy. So the GBP (blue graph), instead of bouncing back as I had expected, continued to fall until now. There are signs that it has hit a bottom at last. It remains to be seen if it will make a recovery of any significance.
Meanwhile, the Euro  (amber graph) continues is upward trend.

Monday, 4 July 2016

GBP/USD to rise from this bottom

There's the bottom! The Great British Pound (following its BREXIT plunge) rises from here. However, for the next few months, the old bottom becomes the new top, perhaps.

Ryanair shares recovery: profit opportunity

The severe drop in the price of Ryanair shares on Thursday 23 June 2015 was undoubtedly due to the LEAVE result in the BREXIT referendum.
What are the chances that this result will have an immediate negative result in the company's fortunes? I would say: practically none.
I, therefore, expect a continuance of the recovery that occurred from 23 Jun to 1 Jul.

Friday, 24 June 2016

GBP/USD: BREXIT down-spike to recover partially

Amazingly, Britain has voted to leave the EU, bringing the anticipated down-spike in the security (and the world-wide markets).

What happens next? Answer: Nothing.

All the trade agreements and border controls remain the same for at least the next two years.

Nothing - except the uncertainty as to the future.

As the British Pound was already undervalued, there should, in the next few days, be a partial recovery from the down-spike, followed by a crawl back into my yellow box.

Wednesday, 22 June 2016

GBP/USD: Betting on BREXIT Referendum

GBP/USD: Betting on Brexit Referundum

Pollsters say it is too close to call. Punters favour a Remain result. If the Brits vote to stay in the EU, we should see a considerable spike tomorrow evening into Friday (green triangle), followed by resumption of the upwards slope from a higher spot than present value. A vote to exit will bring a down-spike (red triangle), but this should be followed by a return to present levels, as the pound is under-value. My bet is on Remain..

Tuesday, 21 June 2016

GBP/USD: Now for some profit-taking

After spectacular gains yesterday, continued into this morning, we will undoubtedly see some profit-taking, resulting in a fall-back, and resumption of the up-swing on Thursday or Friday.

Sunday, 19 June 2016

GBP/USD to rise now

Five days to the BREXIT referendum, and the polls have moved back in favour of REMAIN. On Friday last, the pound sterling  began its comeback, and now is the time to place the bet.

Wednesday, 15 June 2016

NASDAQ: Wait and See

At present bouncing off the short-term Support Line, we can't be sure whether it will rise or fall.

The green box is the range (pointing upwards) within which the price is moving; but the red line is a long-term Resistance Curve.

The price may rise as far as the Resistance Curve, but no further, given the threat of an eventual rise in FED interest rate this year.

If the price turns downwards tomorrow and breaks through the short-term Resistance Line, it should drop rapidly towards the 5-year Support Line.

Monday, 13 June 2016

GBP/USD hits bottom

Anticipating a possible British exit from the EU, Great British Pound (red graph) has declined sharply for two years, not having recovered from its plunge in 2007/ 08. It now hits an all-time bottom.

Referendum day (23 June) is shown by the vertical bar. The pound fell sharply on Friday 10 June, as opinion polls show the Exit camp moving ahead of the Remains.

The economics all stack up against Exit, but the immigration issue is the factor bolstering the Exit camp. In 2015, net immigration into the UK was 333,000. Continue that trend for 20 years, with consequent increase due to births, would increase the population of Britain by over 7 million. Already there are 8 million of foreign birth in the country, out of a total population of 64 M.

Would leaving the EU solve the immigration crisis? As the polling date nears, the economic argument will become more persuasive and the actual referendum will be governed more by the head than the heart.

I think a bet on the GBP just before referendum day is warranted. Even if the vote is to leave, the pound has probably already fallen enough. The chart shows the EUR/USD  in blue.

Monday, 6 June 2016

EUR/USD to continue uptrend for next year unless BREXIT

The all-time chart (showing the history of the Euro from its origins, against the US Dollar) will be upwards for the next year, unless the Brits vote to leave the EU, which could see a down-spike on or following 23 Jun 2016 (down-spike not indicated). The march up the hill is unlikely to be straight all the way, but have occasional regressions to the underlying slope-line.

Friday, 3 June 2016

NASDAQ hits a local peak and wobbles

Nasdaq is easing back today after hitting its predicted local peak. In the absence of any imminent move on the Interest front, I guess that the movement over the next three weeks or so will be along the path of my green arrow: Down a little, then Up a little, ultimately controlled by the 5-year Support Line and the brown Resistance Curve.

EUR/USD: Todays Spike

I predicted that the Euro  would rise in advance of the BREXIT referendum and have a spike, up or down depending on the outcome, afterwards.

Today's spike tells me that the market is growing more confident of a positive outcome (i.e., the Brits voting to stay in the EU). There will be some profit-taking at this point, so the price should, in the next few days, ease or flop back to the shaft of my blue arrow.

Monday, 30 May 2016

EUR/USD to peak one way or the other on BREXIT day

The vertical line marks the date of the BREXIT referendum.
Anticipating a positive result (i.e., STAY), the security will rise from its present bottom.
A positive result in the referendum will bring a peak in the value of both Euro and GBP against the US Dollar, settling back to the current Resistance Line or thereabouts.
A negative result will bring a down-spike, settling back to a lower position in the present range.
(Click on the charge for a larger image).

NASDAQ to hit a peak

I reckon the 5-year Support Line is our main guide to where the NASDAQ 100 is heading. The trend is upwards, but we are about to hit a peak

Wednesday, 25 May 2016

NASDAQ 100: Is the down-trend now over?

So, the graph has now hit the Trend (Resistance) Line. If it breaks through this line, I will conclude that the down-trend is over, and for the next while down-swings will bounce off the 5-year Support Line. The former height of 4710 could be achieved by July.

EUR/USD: Is this the bottom of the Down-swing?

Early in the year I drew a projected up-slope for 2016, following the historical uptrend norm.
The rise in the Euro  against the US Dollar  soon accelerated to a faster slope, but recent weeks have seen a down-swing, bringing us back to the projected line.
The BREXIT referendum (scheduled for 23 June 2016) is obviously making investors nervous about betting on the Euro  (and GBP) for fear of the currency plunging in the event of a "Leave" decision.
Judging by the chart alone, one would guess that the down-swing has now reached its bottom point, but the nervousness about BREXIT could drive it further down.
The most likely (or sensible) result of the referendum would be to Remain in the EU, in which case we will see a spike.
The next few days will show whether the down-swing is over or will continue until close to referendum day.

Tuesday, 24 May 2016

NASDAQ 100: Is the downtrend over?

In my last post on the NASDAQ, I suggested that a revival of price before the graph met Support Line S1 would indicate that the downtrend is over. It is not certain whether the current rise is a revival or just a pause in the down-swing. I wait and observe now.

Monday, 23 May 2016

EUR/USD shows Brexit nerves

Four weeks to go to the BREXIT referendum. The Euro  and Sterling are feeling nervous.

For Britain to leave the EU would be madness.

If the Brits vote to stay, both currencies will have a spike immediately after.

In the unlikely event that they vote to leave, the immediate effect might be a down-spike. However, the actual changes in the treaties will take time and both sides will strive to optimise the results.

Ultimately, EUR/USD  will continue upwards.

Monday, 9 May 2016

EUR/USD My projection is holding firm

Click on the image to enlarge it.

It looks like the golden arrow I drew a month ago is holding firm and the uptrend continues inside the green channel. Nervousness about the Brexit referendum could cause jitters over the next six weeks. A vote for British exit from the EU would cause a down-spike, but would be followed by protracted negotiations in which actual trading changes would be gradual rather than sudden. Brexit sounds unlikely, but predicting the outcome of a referendum is fraught.

Friday, 6 May 2016

NASDAQ downtrend slope

If the graph bounces off Support Line S1, then the current downslope is likely to continue. If it revives before it meets S1, the indications are that the downtrend will continue no further. If it drops to S2, a sharper downslope is indicated.

Tuesday, 12 April 2016

NASDAQ Trending Down

NASDAQ 100 Index is trending downward with a gradual slope. Expectation is that American interest rates will rise, but only gradually, provoking a movement out of shares into cash.

Friday, 8 April 2016

EUR/USD Downswing may be half-fearted

If the present down-swing takes a gentle down-slope, then the indications are that it will be half-hearted and that a break through the "Wall of Resistance" is imminent in the next upswing.

Wednesday, 30 March 2016

EUR/USD assaults Wall of Resistance

In my last post, I drew attention to a Wall of Resistance that has yet to be breached by the Euro  in its attempt to rise in value versus the US Dollar . It is now heading towards the Wall once more. Will it breach the Wall? Probably not in this assault; It will, I think, swing down as soon as it touches the wall, to launch a stronger assault next time.

Tuesday, 22 March 2016

EUR/USD Quandary

This time last year, many punters were expecting the Euro  to keep falling until it reached parity with the US Dollar. Then on the Ides of March 2015 the trend reversed. Since then EUR/USD  has met a wall of resistance at $1.146. Now on a downswing, we wait to see if its next rebound (from around $1.10) will take it crashing through this wall.

DOW to down-swing now

I expect a downswing now.Question is: where will this downswing bottom? If at the purple Support Line, we are now in an uptrend. Otherwise, the downtrend continues, and why not?

Friday, 18 March 2016


In January, I drew the dotted-green "Projected Upslope 2016," based on the long-term pattern. The Euro  has trended upwards against the US Dollar  since then, keeping just clear of the projected upslope. The Support Zone (green triangle) was breached, indicating a modification of the Channel: the purple box. Taking this as a guide, I would say that the graph is back in the Resistance Zone now, ready for a downswing soon.

DOW appears to pull out of downtrend, perhaps temporarily

Click to enlarge.

Paradoxically, it is bad economic news that caused the markets to rebound, and, apparently, right out of the downtrend. Poor figures led to the FED announcing that the interest rate hikes will be slowed for the rest of the year, and this led to the rise in share prices as money headed back to shares rather than bonds. We may, however, now be at a peak, from which prices will drop again. I will watch and see which of the purple trend lines give way: the Resistance Line to indicate a reversal of the downtrend, or the Support Line to indicate its continuance.

Wednesday, 24 February 2016

EUR/USD in the Support Zone

The Euro is in the Support Zone I drew in a previous post.

I expect it to swing up from here. However, there is a possibility that the forthcoming British referendum on leaving or staying in the EU may cast a shadow and tempt the market into pushing the Euro down against the US Dollar.

Caution is warranted: watch for the beginning of the rebound before betting on the upswing.

Tuesday, 23 February 2016

DOW downswing to resume

Over the last 6 weeks the downtrend of the Dow has stalled. There is still quite a distance of downward movement to go before the correction is complete. Another downswing is imminent.

Monday, 22 February 2016

NASDAQ downtrend may be at an End

Having broken decisively through Resistance Line A, this phase of the NASDAQ 100 downtrend is at an end.

Resistance Line B has also to be breached before the overall downtrend can be seen to have ended.

Even then, it does not seem likely that the recovery will go as far as Line C. I am guessing (if the index does not plummet through the 5-year Support Line, creating a greater correction) that the corrected NASDAQ will stay within the purple range I have drawn, based on the 5-year trend.

Thursday, 18 February 2016

NASDAQ: Nothing is sure except the swing.

Bouncing off my red curve, (as I predicted), NASDAQ swings downward.

Since a change in trend-direction may be imminent, we are uncertain how far the downswing will go. It may not reach the green curve, but, then again, it might crash right through it. If it does, it has a long way to go. If it does not, we see that a bottom is forming to the downtrend.

Nothing is sure except one thing:
That stocks and shares will always swing.
Whether the trend is up or down,
The swing is always to be found.

Swinging high and swinging low,
Who can tell how far 'twill go?
Guided by what has gone before,
We guess old patterns will repeat once more.

Sometimes we're right; sometimes wrong:
One principle will guide us all along -
To limit the amount we risk,
So that profitable trades are larger hits.

We limit the risk by one device:
Quit quickly when we've not guessed right.
But hold on when it goes our way,
So that the trade will truly pay.

Watching out so we will surely spy
When the darn punt has gone awry.

Wednesday, 17 February 2016

NASDAQ and DOW soften their downtrends

The plunge I predicted in my last post on the NASDAQ did not materialise. Instead the graph broke through Resistance Line A. We can't say that the downtrend is finally over until the graph breaks through Resistance Line B. In the meantime, the downtrend has softened. I will not bet on the current upswing breaking through the red curved line, nor the ensuing downswing breaking through the green curved line.

EUR/USD stays within its channel

The EUR/USD  continues to swing up and down within its channel. The downswings tend to be gentler than the upswings. The current downswing is likely to continue at a gentle pace until the graph touches or enters the Support Zone. I remain neutral for the moment.

Tuesday, 16 February 2016

NASDAQ rebound is over

The ten-day rebound of the Nasdaq is over. The green arrow indicates how the graph will plunge over the next few days.

Monday, 15 February 2016

DOW sticks to downward path

Repeating the chart I drew 9 days ago on shows DOW INDUSTRIALS INDEX sticking closely to the downward path I laid down with very little wandering off-track. The green curved line shows that there is considerable scope for varying from the path while still continuing downwards. At present the graph is half-way between the predictive curve leading to the expected bottom and the one leading to the worst scenario. Though there will probably be half-hearted rebounds along the way, the chart is on line to hit a bottom below 15000 by year-end.

QE and ZIRP (Quantative Easing and Zero Interest Rate Policy) brought the Dow to its 2015 height. Now is Payback time for QE loans, and the ending of ZIRP. These changes are sufficient to bring about a correction to the "expected bottom." A serious deteriation in world economics might cause a further plunge back to the "historic slope," which I guess would be the worst scenario.

Wednesday, 10 February 2016

EUR/USD slope rises

The Euro's peak hit a new height, forcing us to review our current channel. I have drawn Resistance and Support Zones instead of lines, to articulate the ambiguity. The trend, of course, remains upwards; downswings probably remain gradual.

Saturday, 6 February 2016

DOW overview

Chart show summary of Dow Industrials  since 1980. Click to enlarge.

Thursday, 4 February 2016

EUR/USD Spike: Where will it find Resistance?

In my last Euro  post I displayed a 23 year chart and justified my 2016 Projected Upslope.
Today I zoom in on the current spike. I draw a speculative Resistance Line parrallel to the Current Support Line. If the graph repeats the pattern of December's spike, there may be a gradual rather than a sudden drop back to, and no further than, the Current Support Line.

Wednesday, 3 February 2016

DOW pattern for 2016

The graph shows the performance of DOW INDUSTRIALS since 1995.
Human institutions, like nature, are creatures of pattern. Expecting this graph to repeat the patterns of the past, I draw two S shaped curved lines linking the expected bottoms and tops for the coming period.
I expect the downtrend to continue for the entire of 2016. A further 7% will be lost in this Bear Market, bringing this  index below 15.000.

EURO On a Spike

The Euro  jumped 2% today against the US Dollar. I reckon this is a spike and it will now fall back, though perhaps not by the entire 2%.

The chart shows the entire history of the Euro  against the Dollar, going right back to 1993. The uptrends have been consistently more or less at the slope I projected for 2016. Coming down off today's spike may bring the graph back in line. There is, however, plenty of precedent for the spike to be continued for a day or two longer! before coming back in line.

Monday, 1 February 2016

DOW and NASDAQ continue downtrend despite upswing

While the US Markets rebounded last week, they are still within the parameters of a Bear Market.
DOW Industrials  shown by orange coloured graph and trend lines, and NASDAQ 100 shown by blue graph and trend lines.
Neither appears near the end of the current correction; so the Bear Market is likely to continue for most of 2016.
Click on Image to enlarge.

Tuesday, 26 January 2016

DOW and NASDAQ correction to continue

Click on chart to enlarge.

Last week's rebound in the markets was short-lived and both Dow and Nasdaq are again losing ground.
Reviewing the long-term patterns, there is considerable scope for further correction, and few hopeful headlines in world economics.
The Bear Market is likely to continue for the rest of 2016.
The chart shows the Dow in red (both graph and trend lines) and the Nasdaq in blue. Both have already fallen by 12% since November. The Dow will probably have fallen by about 25% in all by the end of 2016 and the Nasdaq by 32%%, as indicated by my curved arrows.