The market is rallying now… off what we can only pray tell, but the Shanghai Composite rallied into the day close closing about 1.8% above its’ day lows made in the afternoon session. The Hang Seng Index is retracing its earlier day gains and lagging the SH-Comp by 1% tick-for-tick, but leaves an extra 1 hour open. The Nikkei followed suit and finishes strongly thanks to its current extreme volatility.
HSI volatility has been below yesterday’s close, allowing the ADX/DMI outlined before to catch trend, meaning a continued move lower for the volatility, indicating one up for the HSI. Although volume is great, we are still working on an inside candle here, so some caution is warranted, although it is proving to be a massive pinbar at the moment, and perhaps even a hammer later on today, as the wick is just very very long following the Greek announcement debacle. Bullish index signals on every chart study I track.
This is confusing, and although my technical prior analysis of the HSI action was totally off in terms of timing, it wasn’t in terms of general view. It does still appear as if the world wide risk market is willing to move heavily one way or the other on nearly any news, but it’s difficult to guess at the moment which way that will end up being. I maintain the thesis that options are undervalued, and they will likely increase in value temporarily as the stakes just increased for Germany in its negotiations about bailing out
Gree Deutsche / Commerzbank just as US traders return after Thanksgiving. Will they have anything to thank after that weekend? Doubtful.