Charting around Asia

Rice!... The New Gold

by John Needham, The Daniel Code Report | April 9, 2008

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As the staple food of billions the demand chain for Rice is known and established. As a speculative commodity it has outperformed Gold but garnered quite different headlines. From its closing low of 360.0 in October 2001 Rice has climbed almost 500% to its April high of 2155.0. Rough Rice futures is near a primary Danielcode target at 2142 so that could be the high for a while. Other targets on the monthly chart are shown if there is a further squeeze. 

From Business Report: Upheaval from rice crisis parallels turmoil in credit markets April 8, 2008 Cairo - From Cairo to New Delhi to Shanghai, the run on rice is threatening to disrupt worldwide food supplies as much as the scarcity of confidence on Wall Street earlier this year roiled credit markets. China, Egypt, Vietnam and India, representing more than a third of global rice exports, curbed sales this year; Indonesia said it might do the same. The World Bank said 33 nations from Mexico to Yemen might face "social unrest" after food and energy costs increased for six straight years.

The disconnect between impaired credit and property markets and world stock markets continues. The International Market Index remains in a strong position having fallen since its peak in October 2007 only to its first Daniel number sequence. The first Daniel price level at 853.90 held this index in January to less than 1 point and after a retest in March, the IMI has retraced almost 50% of its first leg down. Traders at the Danielcode Online were looking for the rally to 973.97 and got a nice run to 968.40 which is close enough off a monthly chart.

Financial Sense readers have had a trading windfall as most Asian markets turned near their Danielcode targets which are posted free for FSO readers at my website.

The all important US Dollar is holding above the 70.40 Daniel sequence target which was published in my February articles and has been continually featured in these articles. On 18 February I called for at least an intermediate low in DX at 70.40. The low in March was 70.70! 

I expect the two degrees of Daniel sequence support at 70.40 to provide at least a multi month rally but if this level doesn’t hold, 66c beckons.

The intermediate bottom in DX gave Gold and Silver owners a heart attack as traders ripped $150 off Gold’s top tick which was made just 2 ticks from its weekly Daniel number. Gold has become just another international commodity for traders and the linkage to DX through the carry trade is obvious. DX made its low on 17 March; Gold made its high on 17 March; Silver made its high on 17 March. See the linkage?

Asian Markets

Financial Sense readers have had massive trades in most of the Asian and Pacific indices by taking their cue from the free charts posted for readers at the Danielcode website.

The Hang Seng bounced off its Daniel number at 20544 and is now up almost 4000 points near the DC retracement at 24463. 

The Korean Kospi which has been relatively stronger than other Asian markets is up 240 points from its 1538 turn just 2 points from its Daniel sequence target. 

Japan’s Nikkei made a nice turn for DC traders at 11691 about 23 points from its expected turn at 11714 but has been weak on the rally. We expect normal markets to correct to at least the first Daniel retracement in red at 13865 which is a minor correction of the major leg down in the Nikkei marked with the thick red line. So far the Nikkei has been unable to do this. In fact it has barely retraced 29.7%, the 2nd Daniel iteration. Fast markets correct 29.7% then 37.5% so this market remains at risk unless it can at least summon the strength for a normal retracement. 

China’s Shanghai Composite Index grudgingly turned just 19 points through its DC target at 3290. The rally so far has been less than impressive and this market remains at the same risk as the Nikkei. With the Beijing Olympics approaching, the question is how much support will remain after the usual pantomime and its attendant euphoria have passed. 

The Australian SPI 200 made its turn just 17 points from its Daniel support number at 5056 and rallied almost 700 points to its minor 50% retracement. Its next turn was 7 points from the black DC number at 5725. This market loves doing 50% retracements of major and minor ranges so always have that level on your charts. 

International Markets

Corn gapped on the weekly chart right into its next Daniel sequence number at 566^20. Additional potential targets not yet reached have been deleted in deference to subscribers. This market is a marvelous example of the unintended consequences of legislative action but despite the new pressures bearing on Corn as competition for its artificially induced biomass qualities competes with its traditional demand, it still follows the Danielcode with precision! 

Crude Oil took a breather just 50c above its Daniel number target at 111.26 and after a classic 50% retracement of its operating range to the black DC number at 98.61, is now making another assault on its old highs. There are more DC targets above 114.76. 

Wheat topped 7 points through its weekly Daniel number in February and then had another dash for the highs only to be turned back by the DC number at 1307. It then made an uninterrupted dive to its Daniel support at 900^6 tearing almost 450 points off the top tick in just 5 weeks. Other Daniel levels on this chart have been deleted in the interests of my subscribers but you can get all the Daniel numbers by subscribing at my website. The “Services” page outlines the many markets I cover ranging from S&P and Dow Jones Index and futures to Forex and commodities. 

The Asia/Pacific charts featured in this article are available free to Financial Sense readers at the Danielcode Online website. They are usually updated weekly so I invite you to visit my website often. They certainly have provided you with an unsurpassed guide to market turns recently.

 

Copyright © 2008 John Needham
Asia Editorial Archive

I invite you to visit the Danielcode Online where all the Asia/Pacific index charts in this column are free. Due to the interest these charts are generating, they will now be updated for you on a weekly basis. 

Forex charts on 15 of the major crosses with weekly, daily and 4 hour Daniel number sequences are available to subscribers as are the Daniel number charts for gold, silver, corn and more. Our 4 hour charts on selected forex crosses continue the pursuit of health, wealth and happiness for traders with over 2500 ticks (pips) of trading profits identified in our current charts this week.

John Needham is a Sydney Lawyer and Financial Consultant. He publishes The Danielcode Report and writes occasionally on other markets. He lives with his family in Australia and New Zealand.

“The fox knows many things, but the hedgehog knows one big thing. A Hedgehog Concept is not a goal, intention or strategy to be the best. It is an understanding of what you can be best at. The distinction is absolutely crucial”. ~ Isaiah Berlin, The Hedgehog and the Fox

contact information

John Needham | The Danielcode Report | Taupo, New Zealand | Email | Website

The opinions of FSU contributors do not necessarily reflect those of Financial Sense.