Dow Makes a Doji

Dow Makes a Doji

With the US ‘armada’ and nuclear powered USS Carl Vinson stationed at South Korea, the message to North Korea is loud and clear: “Don’t mess up with USA”.

North Korea has so far very recently had two failed missile tests. Was it an act of sabotage or the result of the US deployed THAAD (Terminal High Altitude Area Defence) System in South Korea that disabled the missiles at the launch stage itself?

With the presence of the fleet of US Navy in the peninsular region, quietening of North Korea, who has been testing missiles and conducting nuclear tests for past two decades and who has been openly challenging its neighbours including USA and Japan, will lead to a tacit acceptance of intimidation, but the fact that two missile tests were conducted (whether successful or failed) despite the repeated warnings from the US indicates that North Korea goes undeterred.

US in turn has imposed sanctions and has asked its allies to cooperate.

My concern is that if these two missile tests would have been successful, what would have been the results. Would it have provoked the US naval fleet to intercept? Could this have led to a conflict and a subsequent war?

Meanwhile there have been reports and news about the mystic named Horacio Villegas who has prophesied about breaking of nuclear war on May 13, 2017. This prophecy is dated April 17, 2017.

On the front of the financial markets, all stock indices have made higher highs during the last week totally defying and going undeterred by the abovementioned geopolitical developments. None of the indices except Dow has made any candlestick pattern indicating bearishness, though all the technical indicators have shown divergence, indicating bearishness.

There have also been reports that Nifty is going to touch/ cross 10000 by December and that is just 7% away from the current level. Interesting enough!

Given below is the two monthly candlestick chart of Dow which has made a Doji in the form similar to a ‘Hanging Man.’ A Doji or a Hanging Man (slightly different from a Doji because it has a real body which is atleast half the size of its lower shadow) is formed at the top of the market. These patterns indicate trend reversal. While a confirmation is required on the candlestick charts to confirm bearishness, this time around a confirmation will perhaps be too expensive for the stock markets.

On the other hand, despite whatever the US influential bigwigs of the financial markets may have indicated about bullion, gold and silver are geared up for a long term bull run.

The author can be contacted at: riskadvisory@outlook.com.

DISCLAIMER:

These extracts from my trading files are for the purpose of education only. Any advice contained therein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs and must not be construed as an advice to buy, hold and sell or otherwise deal in commodities, currencies, indices, securities or other forms of investments. Accordingly, no reader should act on the basis of any information contained therein without consulting a suitably qualified financial advisor in the first place.