Dark Cloud is Gone?

The Dow is portraying an interesting picture now! The resistance at 11450 level was broken thanks to the supercharge fuel added on 1 Dec and 2 Dec. Look at the Marubozu candles and volume on these two days. it is sufficient to pull the market out of its gravity zone. so whats next? The Year End holiday season and Christmas holiday are just around the corner. Expect retreating in volume in coming weeks. Window dressing activities will also heat-up during this period. Hence, the upward trajectory in Dow should be discounted. Still, risk seems to be lesser now as the shooting star fear on 7 Dec is conquered by the advancement these couple of days.

Now lets examine Shanghai market. The down trend resistance at 2900 level was also broken thanks to super charged fuel on last two days. Look at the confident marubozus and volume on 10 Dec and 13 Dec. Volume raised by easily 30% from the previous week. This signifies the window dressing activities. Hence, any upward movement should be discounted. Nevertheless, the movement should be monitored as it poses great opportunity upward continuation trend after the temporary correction since early November. The correction, I would believe was part of the profit taking activity by investment communities to realise paper gain wherever possible for distribution and lock in performance. These activities subsided toward end of Nov 2010 with volume retreating.
However, the sky in Hong Kong is still gloomy. the formation of H&S is still in the making. Although the profit taking is subsided as index stabilised with volume retreating, fresh buying is still pending unlike US and China Market shown above.

Conclusion, out of 3 markets we have 2 positives and 1 negative, i would suggest nibbling activities should commence now.