History of Korea Composite Price Index
1999

20th December: A little short term ambiguity, with a possible fall to 830. But more likely, the index will rebound at the current level and proceed to resistance around 1,100 - 1,150.

Current Prediction

Short term: 2 double bottoms point to 1,090 and 1,130

Medium term: none

Long term: A weekly pattern gives a target of 1,300. But the long term weekly resistance at 1,200 should provide a major obstacle.

Currency: could strengthened to 1,150

22nd November: The index pulled back after testing resistance at 1,000. A break above 1,020 would pass the next resistance and confirm our two short term targets.

Current Prediction

Short term: 2 double bottoms point to 1,090 and 1,130

Medium term: none

Long term: A weekly pattern gives a target of 1,300. But the long term weekly resistance at 1,200 should provide a major obstacle.

Currency: could strengthened to 1,150

15th November: Record volume last Friday gives the market a very good chance of breaking the 1,000 barrier in the short term. Long term prospects could see the index confirm a target of 1,750 if 1,050 is broken on good volume.

Current Prediction

Short term: 2 double bottoms point to 1,090 and 1,130

Medium term: none

Long term: A weekly pattern gives a target of 1,300. But the long term weekly resistance at 1,200 should provide a major obstacle.

Currency: none

8th November: The bull returned with a vengeance last week, rallying above the neckline of our bearish triple top with a double bottom breakout. Volume on breakout was good. This is a very bullish interruption to the target of 675. It suggests that chances of a fall below the neckline at 850 is very unlikely. However, there is a channel resistance at the current level that must first break in order to dispel all bearish omens.

Current Prediction

Short term: double bottom points to 970

Medium term: none

Long term: A reverse head and shoulders gives a target of 1,250 (cancelled); a weekly pattern gives a target of 1,300. But the long term weekly resistance at 1,200 should provide a major obstacle.

Currency: none

25th October: The daily index chart still points unambiguously down. However, the short term weekly chart indicates a mere pullback to the neckline of a pattern that points up. We therefore have conflicting signals. Some weight must be given to the bullish noises in other parts of Asia. There are good supports for the index and the fund. These might interrupt the bearish trend, especially if the rest of Asia looks positive.

850 and 880 are the crucial resistances this week. Support is at around 775.

Current Prediction

Short term: none

Medium term: double top points to 675.

Long term: A reverse head and shoulders gives a target of 1,250 (cancelled); a weekly pattern gives a target of 1,300. But the long term weekly resistance at 1,200 should provide a major obstacle.

Currency: none

11th October: The index and the fund hit good supports last week. But the outlook is still bearish, unless there is a rally above 870. Some comfort might be taken for the bullish activity elsewhere in the region that occurred last week. But there is no other reason to suppose that the index will not fall below 700.

Current Prediction

Short term: none

Medium term: double top points to 675.

Long term: A reverse head and shoulders gives a target of 1,250 (cancelled); a weekly pattern gives a target of 1,300. But the long term weekly resistance at 1,200 should provide a major obstacle.

Currency: none

4th October: The index has broken out of a medium term double top pointing to 675. There is a chance that the index will find support at the current level and that the top will be cancelled. (This might occur if the region is moving in tandem and other markets are currently bottoming. Read my introduction.)

But the greater probability is that the index is now in a medium term bearish mode. A double top such as the current one cannot be ignored.

Current Prediction

Short term: none

Medium term: double top points to 675.

Long term: A reverse head and shoulders gives a target of 1,250 (cancelled); a weekly pattern gives a target of 1,300. But the long term weekly resistance at 1,200 should provide a major obstacle.

Currency: could fall to 1,270 in the short term.

27th September: The index is still safe. But a double top is in danger of breaking. If that happens, we would have a target of 680. Currency is weakening.

20th September: Our target of 1,250 is still the most likely scenario and will remain so unless the index falls below 850. However, the market has not been as strong as I would have hoped. We had a rally to 980 recently on falling volume. We must therefore consider a possible topping scenario. Currency also, is in danger of topping.

Current Prediction

Short term: wedge target is around 1,050; but it's not reliable.

Medium term: none

Long term: A reverse head and shoulders gives a target of 1,250; a weekly pattern gives a target of 1,300. But the long term weekly resistance at 1,200 should provide a major obstacle.

Currency: topping danger.

13th September: The long term target of 1,250 is valid. Volume is still good. It's now a matter of time before something happens to set the market rolling. A little breakout last Friday could set a rally in motion. But we've had a few false starts over the last few weeks. So let's wait and see.

Current Prediction

Short term: wedge target is around 1,050; but it's not reliable.

Medium term: none

Long term: A reverse head and shoulders gives a target of 1,250; a weekly pattern gives a target of 1,300. But the long term weekly resistance at 1,200 should provide a major obstacle.

Currency: strengthening

30th August: The index has turned on the neckline of the pattern pointing to 1,250. It has broken out of a falling wedge on good volume. It now appears to be heading for target. The only danger would be if the index reached the previous high on falling volume. However, there is no sign of failure at present.

Current Prediction

Short term: wedge target is around 1,025

Medium term: none

Long term: A reverse head and shoulders gives a target of 1,250; a second pattern gives a target of 1,350. But the long term weekly resistance at 1,200 reduces the chances that the index will see 1,350 before substantial correction.

Currency: strengthening

23rd August: The greater probability is that the index has found a short term bottom at 870 and will now rally to target at 1,250. However, in the less likely event that the current level fails, we should be prepared to cancel our higher targets and expect a fall below 700.

Current Prediction

Short term: none

Medium term: none

Long term: A reverse head and shoulders gives a target of 1,250; a second pattern gives a target of 1,350. But the long term weekly resistance at 1,200 reduces the chances that the index will see 1,350 before substantial correction.

Currency: top danger

16th August: No excitement last week. The index is still safely above the neckline of the pattern pointing to 1,250. However there is a double top danger forming in the short term.

Current Prediction

Short term: double top points to 840; but support at 890 must first break

Medium term: none

Long term: A reverse head and shoulders gives a target of 1,250; a second pattern gives a target of 1,350. But the long term weekly resistance at 1,200 reduces the chances that the index will see 1,350 before substantial correction.

Currency: support at the current level. But if it fails, 1,225 is likely.

9th August: A double top could take the index below 700. But the greater probability is that the index will not fall below 890, and that the index will soon reach 1,250.

2nd August: The index appears to be back in bull mode after having made a healthy correction. A new target of 1,250 is confirmed. But the weekly chart suggests resistance at 1,200.

Current Prediction

Short term: none

Medium term: none

Long term: A reverse head and shoulders gives a target of 1,250; a second pattern gives a target of 1,350. But the long term weekly resistance at 1,200 reduces the chances that the index will see 1,350 before susbtantial correction.

Currency: support at the current level. But if it fails, 1,225 is likely.

19th July: The index has confirmed a short term target of 1,080; and the long term daily chart shows potential for the index to rally to 1,200 or 1,250 in the next month or six weeks. But the weekly chart suggests a bit of resistance at the current level. We could therefore see a quick rally to 1,080, then a consolidation or a correction for a week or two before anything more dramatic occurs.

Current Prediction

Short term: a reverse head and shoulders with target just under 1,080

Medium term: none

Long term: A reverse head and shoulders with neckline at 800 gives a target of 1,350. Volume is good. Chances are good.

Currency: stable; possibly strengthening to as high as 1,100.

12th July: The index has passed target of 1,000 on record volume. It is now facing resistance. But it has yet to turn. No short term direction. Look at the long term weekly chart, that shows next major resistance between 1,150 and 1,200.

Current Prediction

Short term: none

Medium term: none

Long term: 1. reverse head and shoulders points to 980 or thereabouts. Volume is high, giving a very high probability of reaching target, probably in July or early August.  Target reached 7th July 1999.
2. A reverse head and shoulders with neckline at 800 gives a target of 1,350. Volume is good. Chances are good.

Currency: stable; possibly strengthening to as high as 1,100.

28th June: Most of the charts show resistance this week, suggesting short term consolidation. But the shortest term chart allows a rally to as high as 975, which is close to our first target. Other charts are not as generous. And there's no telling which will prevail. Let's see whether volume gets the index over the resistance, or whether the index will take more time to consolidate.

Current Prediction

Short term: none

Medium term: none

Long term: 1. reverse head and shoulders points to 980 or thereabouts. Volume is high, giving a very high probability of reaching target, probably in July or early August.
2. A reverse head and shoulders with neckline at 800 gives a target of 1,350. Volume is good. Chances are good.

Currency: stable; possibly strengthening to as high as 1,100.

21st June:  The index moved sideways last week, giving no clear indication of short term direction. Long term targets are still valid.

Current Prediction

Medium term: none

Long term: 1. reverse head and shoulders points to 980 or thereabouts. Volume is high, giving a very high probability of reaching target, probably in July or early August.
2. A reverse head and shoulders with neckline at 800 gives a target of 1,350. Volume is good. Chances are good.

Currency: stable; possibly strengthening to as high as 1,100.

14th June: Short term direction is unclear. We could see a sharp rally to to target or a few weeks of consolidation before any further gains may be expected. 880 is a critical resistance. If this level is passed we could see 920 in a few days. Otherwise, a pullback to 800 will slow the process. A new target of 1,350 is confirmed.

Current Prediction

Medium term: none

Long term: 1. reverse head and shoulders points to 980 or thereabouts. Volume is high, giving a very high probability of reaching target, probably in July or early August.
2. A reverse head and shoulders with neckline at 800 gives a target of 1,350. Volume is good. Chances are good.

Currency: stable; possibly strengthening to as high as 1,100.

7th June: Two scenarios now face the market: first, a rise to 870 where after the index moves in a range of 870 to 800 for a few weeks, with target of 1,000 being reached in late July or early August. The other scenario is a rapid rise to 960 by the middle of next month with a fall back to 800 preventing target from being reached until as late as November, but giving hope for a new high for the index next year.

Current Prediction

Medium term: none

Long term: reverse head and shoulders points to 980 or thereabouts. Volume is high, giving a very high probability of reaching target, probably in July or early August.

Currency: stable; possibly strengthening to as high as 1,100.

31st May: The index has turned on the neckline of our long term reverse head and shoulders. Note that the market resisted the regional bearish trend towards the end of last week. This supports our scenario of a turn on neckline support. With luck, the index will now rally to target at around 1,000. However, there is still room for a fall to 680, without jeopardizing this scenario, given the width of the neckline in question.

Weekly support is at 650. (Even a fall to this level would not cancel the target of 980.)

Current Prediction

Medium term: none.

Long term: reverse head and shoulders points to 980 or thereabouts. Volume is high, giving a very high probability of reaching target, probably in July or early August.

Currency: stable; possibly strengthening to as high as 1,100.

24th May: The index is now close to the neckline of the long term reverse head and shoulders that points to 1000. With luck, the index will turn on the neckline and proceed to 1,000. If the index falls through the neckline, support is around 600. This unfortunate event would cancel the higher pattern. History is with us. We have had a recent example of a turn on neckline in February this year. Let us hope that history will be repeated this week.

Current Prediction

Medium term: none.

Long term: reverse head and shoulders points to 1,000 or thereabouts. Volume is high, giving a very high probability of reaching target, perhaps next month, June, or August.

Currency: stable; possibly strengthening to as high as 1,100.

10th May: As expected, the index did not correct last week. High volume suggested that the double top that had formed would not break. Indeed it did not. The index kept on rising.

The index is heading for target around 1,000. If there is no substantial correction, we could see target as early as next month. If there is a substantial correction - say to 700 - we might have to wait for August. But volume could not be better; and although there is no certainty in this game, we could not have a surer thing than the current prediction.
 

Current Prediction

Medium term: none.

Long term: reverse head and shoulders points to 1,000 or thereabouts. Volume is high, giving a very high probability of reaching target, perhaps next month, June, or August.

Currency: stable; possibly strengthening to as high as 1,100.

3rd May: The index is consolidating at a strong resistance. But volume is rising. Thus chances are low that a double top will take the index to 700 or 670. However low chance does not mean no chance. If the index falls below 730 we may expect a pullback to around 685. Otherwise, a rally to 825 short term is quite likely. After that point, resistance this week is at around 900.

26th April: The index could be in for a correction to 700 or even 670. A larger reversal pattern might be building, which could keep the index around the current level for a few months. But the prospects for 1,000 are good.

Current Prediction

Medium term: none.

Long term: reverse head and shoulders points to 1,000 or thereabouts

Currency: stable

19th April: The market saw turnover of a record 4.8 billion won. The chances of a rapid surge to 1,000 are therefore very high. However, our target of 1,000 will be valid until the middle of next year. We could see consolidation along the way. The long term weekly chart shows resistance at 750 and 850. And the double bottom target of around 780 could be a point of consolidation.

Current Prediction

Medium term: double bottom points to 780

Long term: reverse head and shoulders points to 1,000 or thereabouts

Currency: stable

14th April: A long term reversal pattern broke out, confirming a target of 1,000. Volume looks good. But there is a resistance to cross at the current level.

Current Prediction

Short term to medium: reverse head and shoulders points to 750

Long term: reverse head and shoulders points to 1,000 or thereabouts

Currency: stable

26th March: The index is testing a long term resistance at 610. If it breaks upside, we could expect a target of 1,000. But the index could pull back to 500 or below before turning up and breaking through the resistance.

Current Prediction

Short term to medium: none

Long term: double bottom points to 780 - 800 on the daily and weekly charts. Volume, however, is not persuasive and considerations of symmetry suggest that a larger pattern could require a few more months of consolidation in the range of 500 to 630 (just a hunch).

Currency: turned on resistance. Support at around 1,300.

22nd March: All signs are bullish. Volume is increasing. However, volume is still no match for the impressive performance of December and January. (One wonders whether such a surge could ever be equalled - but it can).

Current volume might be sufficient to move the index higher. But the more likely scenario is a trading range for a few more months as the index consolidates and builds symmetry to the long term reversal picture. The double top scenario of 330 in the medium term is still possible.

Current Prediction

Short term to medium: reverse head and shoulders points to 660. Volume is reasonably good.

Long term: double bottom points to 780 - 800 on the daily and weekly charts. Volume, however, is not persuasive and considerations of symmetry suggest that a larger pattern could require a few more months of consolidation in the range of 500 to 630 (just a hunch).

Currency: turned on resistance. Support at around 1,300

15th March: The index could rise to 650. But volume, although rising, is not as high as that of January and February. Unless we see volume approaching those levels, there is the danger of a double top.

Current Prediction

Short term to medium: wedge pointing to 630.

Long term: double bottom points to 800 on the daily and weekly charts. Volume, however, is not persuasive and considerations of symmetry suggest that a larger pattern could require a few more months of consolidation in the range of 500 to 630 (just a hunch).

Currency: turned on resistance. Support at around 1,300.

1st March: The index is still giving mixed signals. On one hand, a head and shoulders top pattern points down to around 400. On the other hand, the long term double bottom, pointing to 800, is still valid. We shall have to wait and see which is to prevail.

Current Prediction

Short term to medium: head and shoulders points to 400. But the neckline of the long term double bottom has not yet been broken.

Long term: double bottom points to 800 on the daily and weekly charts. Volume, however, is falling off.

Currency: stuck on resistance.

15th February: The index broke out of a head and shoulders top during the week. But it was cancelled by the strong rebound last Friday. The rebound, however, was attended by low volume, suggesting that the neckline of our double bottom might yet break, and the market could still fall.

Current Prediction

Short term to medium: 670 looks less probable as the index rallies on lesser volume.

Long term: double bottom points to 800 on the daily and weekly charts. Volume, however, is falling off.

Currency: stuck on resistance.

8th February: On one hand, we have good long term weekly support and medium term daily support for the market. These supports are echoed by the fund charts. However, the short term picture suggests a head and shoulders top forming. If it breaks, we could expect a correction to who knows where?

Current Prediction

Short term to medium: 670 looks less probable as the index rallies on lesser volume.

Long term: double bottom points to 800 on the daily and weekly charts. Volume is falling off.

Currency: stuck on resistance.

1st February: A short term head and shoulders top pattern could be forming. Volume has fallen off since 22nd January. In the context of regional weakening, a correction to the level of 450 could be expected.

On the other hand, the short term trend in the weekly chart is still positive, the fund is well supported and the market has not fallen below recently re-drawn necklines. 800 is still a valid target. The trouble is that this target would not be cancelled until the index fell another 15%. That's quite a big drop to wait for before getting confirmation of further falls. Weakening volume on rallies is therefore the best indicator of increasing risk of failure.

Current Prediction

Short term to medium: 670 looks less probable as the index rallies on lesser volume.

Long term: double bottom points to 800 on the daily and weekly charts. Volume is falling off.

Currency: stuck on resistance.

25th January: The target of 670 is still valid despite the severe correction last Thursday and Friday. The long term target of 900 requires a bit of adjustment. But it is still valid, albeit with a lower target of 825.

Current Prediction

Short term to medium: 670 looks highly probable.

Long term: double bottom points to 825 on the daily and 850 on the weekly charts. Volume is persuasive.

Currency: stuck on resistance.

18th January: The index pulled back to the neckline of our long term double bottom. All supports are in tact. Volume could not be better. Prospects are still good.

Current Prediction

Short term to medium: 670 looks highly probable.

Long term: double bottom points to 900 on the daily and 850 on the weekly charts. Volume is persuasive.

Currency: stuck on resistance.

11th January: The index has made a long term reversal pattern. If it holds, we can now assume that the market is in a long term bull market. All bearish targets have been cancelled.

Current Prediction

Short term to medium: 670 looks highly probable.

Long term: double bottom points to 900 on the daily and 850 on the weekly charts. Volume is persuasive.

Currency: stuck on resistance.



1998

21st December: The index turned on a long term daily resistance. There are now two scenarios: first, we could see the index take a breather, pull back to 490 or even 465 before proceeding to target. Secondly, the rally could end here and we could see a new bear phase emerge. Volume could not be better.

Current Prediction

Short term to medium: 670 looks highly probable.

Long term: double top still points to 245 log, so beware and the long term trend is still down. This shadow will not disappear until the market hits the 670 target.

Currency: rising medium term trend.

14th December: Now, if you want a good example of  good volume, check out the charts below. The index has soared over the past weeks on record volume. But it still needs to get past 600 for the long term spectre of 250 to be removed. And the index closed on a long term resistance last week. So a bit of correction is quite likely, perhaps as low as 470.

With such huge volume, it would be hard to imagine the market failing. But the long term trend is still down until we get a good long term reversal. This might occur soon. The fund has broken out of a long term double bottom and the index could follow suit, or make a reverse head and shoulders at the current level.

Current Prediction

Short term to medium: 670 looks highly probable.

Long term: double top still points to 245 log, so beware and the long term trend is still down. This shadow will not disappear until the market hits the 670 target.

Currency: rising medium term trend.

7th December: The index has made a new medium term pattern pointing up to 640. But there are numerous long term obstacles facing the ascent. Volume for the index is good and should assist the rally.

Current Prediction

Short term to medium: 640 looks highly probable.

Long term: double top still points to 245 log, so beware and the long term trend is still down. This shadow will not disappear until the market hits the 640 target.

Currency: rising medium term trend.

4th November: The index could well hit 500. Volume is good. But the long term target of 245 is still valid.

Current Prediction

Short term to medium: triangle pointing to 450; double bottom points to 460; 500 for the double headed reverse head and shoulder (with a twist of lemon).

Long term: double top still points to 245 log, so beware!!

Currency: 1,230 is possible.

23rd October: The index is holding above the neckline of our double bottom. Volume is still good. Chances for the rally are still good. Currency looks good.

Current Prediction

Short term to medium: triangle pointing to 420; double bottom points to 470

Long term: double top still points to 245 log, so beware.

Currency: 1,230 is possible.

19th October: The index broke out of a double bottom. Volume is good. The breakout is not decisive. We need a bit of consolidation above the neckline, maybe a pullback and a turn. But it is looking hopeful - at least in the short term.

The long term logarithmic double top target of 245 is still valid. So don't get too hopeful. The target won't be cancelled or questioned unless we get a good pattern pointing above 600.

Current Prediction

Short term to medium: triangle pointing to 420; double bottom points to 470

Long term: double top still points to 245 log, so beware.

Currency: none.

12th October: The index has broken out of a triangle pointing to 420 but the breakout is marginal, due to the lack of clear definition of the pattern. There is a chance that the index can get to 460 via a double bottom.

Current Prediction

Short term: triangle pointing to 420

Medium term: none

Long term: head and shoulders pointing to 150

Currency: none.

5th October: The index is still in consolidation mode. It has meandered for too long within our triangle such that the pattern will not give us a clear indication of direction when it breaks.

28th September: The direction of the index is still uncertain. We have a nice triangle forming, but the index is getting to close to the apex of the triangle to have predictive value. If we don't see a breakout this week, we will have nothing to go on.

21st September: A nice triangle will soon give a clear indication of the direction of the index. But it hasn't broken yet.

7th September: The medium term is ambiguous. The market could go up. Or it could go down. Sadly, the long term target of 150 is still valid, suggesting that the market will not make a long term reversal. But I could be wrong.

21st August: The index turned on resistance last week. The index is more likely to fall than break the resistance.

24th August: There is a small chance of a reversal pattern brewing. But the index would have to break 380 on strong volume. The greater chance is that index will fall to 150 perhaps by the end of this year.

12th August: The short term reversal pattern that I was hoping for has failed. The index is now likely to test support at 300 and then, if that support fails, 280.

3rd August: The market is making a reverse head and shoulders pattern with good volume build up. But the market needs to keep up the good volume and break 372.

Current Prediction

Short term: none

Medium term: none

Long term: none; the head and shoulders pointing to 150 has a corresponding arithmetic target of 360, which has been passed.

Currency: 1,220 passed.

14th  July: Don't you hate these inconsistencies: the currency is strengthening but the stock market is weakening. Wouldn't it be nice if they moved in the same predictable direction? No such luck. The stock market is heading towards the medium term target. We now have a short term prediction of 250. It's valid. But the currency is strengthening and could even go to 1,220.

Current Prediction

Short term: triangle points to 250.

Medium term: A head and shoulders pointing to 100 on the arithmetic scale and 205 on a logarithmic scale.

Long term: The head and shoulders pointing to 150 has a corresponding arithmetic target of 360, which has been passed.

Currency: no clear direction beyond short term weakening. 1,280 prediction is cancelled.

6th  July: A little triangle is forming that will soon give short term direction. Chances are that the index will fall lower. The head and shoulders in the medium term prediction below is still valid.

29th  June: The index looks set to fall to 205 if the current supports fail. The worst case is 100. Currency appears to be stable for now.

Current Prediction

Short term: a head and shoulders pointing to 280: reached.

Medium term: A head and shoulders pointing to 100 on the arithmetic scale and 205 on a logarithmic scale.

Long term: The head and shoulders pointing to 150 has a corresponding arithmetic target of 360, which has been passed.

Currency: no clear direction beyond short term weakening. 1,280 prediction is cancelled.

22nd  June: The good news is that the long term target of 150 has a corresponding logarithmic target of 360, which has passed. The bad news is that there is a new target of 100 arithmetic and 222 logarithmic.

Current Prediction

Short term: a head and shoulders pointing to 280: reached.

Medium term: A head and shoulders pointing to 100 on the arithmetic scale and 222 on a logarithmic scale.

Long term: The head and shoulders pointing to 150 has a corresponding arithmetic target of 360, which has been passed.

Currency: no clear direction beyond short term weakening. 1,280 prediction is cancelled

1st June: If no rally occurs within a week or two, there is a danger that the index might fall to 150. This could happen by August.

Hope for reversal lies at the current level by reason of the long term support. But a valid pattern points down below the support to 280.

25th May: Double bottom hope at the current level increased last week as volume increased. The target of 280 is still valid and will remain so unless the index breaks 410 on strong volume.

Current Prediction

Short term: a head and shoulders pointing to 280, which might be forestalled by a double bottom turn at 350.

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

Currency: no clear direction beyond short term weakening. 1,280 prediction is cancelled.

18th May: The index is consolidating at the 350 level. The long term chart has hit support. But the fund and the currency suggest further weakness. Uncertainty for a week or so.

Current Prediction

Short term: a head and shoulders pointing to 280, which might be forestalled by a double bottom turn at 350.

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

Currency: no clear direction beyond short term weakening. 1,280 prediction is cancelled.

11th May: The best case scenario is that the index turns at 350 and makes a double bottom. However, if that fails, there is a chance that the index falls to 280.

Current Prediction

Short term: a head and shoulders pointing to 280, which might be forestalled by a double bottom turn at 350.

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

Currency: descending triangle pointing to 1,280

4th May: The head and shoulders of last week, pointing to 270, appears to be cancelled. But the index might still fall gradually to the previous low of 350. The currency appears to be heading for 1,280.

Current Prediction

Short term: none

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

Currency: descending triangle pointing to 1,280

20th April: The double top  pointing to 350 is cancelled. But a new threat pointing to 270 is developing. Currency is moving according to expectations.

Current Prediction

Short term: none

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

Currency: descending triangle pointing to 1,280

11th April The market appears to be weakening. Only the long term support can prevent the index returning to 350. But the currency appears to be strengthening to 1,280 and possibly further.

Current Prediction

Short term: double top points to 350

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

Currency: descending triangle pointing to 1,280

20th March: The index is weakening in the short term, but the medium term prospects still look good. The currency is moving on course.

Current Prediction

Short term: none, but possible reverse head and shoulders pointing to 790.

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

Currency: descending triangle pointing to 1,280

16th March: The index turned on support last week. But the volume is decreasing, giving cause for caution.

Current Prediction

Short term: none, but possible reverse head and shoulders pointing to 790.

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

Currency: descending triangle pointing to 1,280

9th March: A reversal still looks good. But there are danger signals to keep in mind. A  possible double top in the short could send the index back to the 350 level. The currency is giving no clear direction.

Current Prediction

Short term: triangle points to 670

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

2nd March: The index is on the verge of breaking out of a reverse head and shoulders pattern that points to 800. The currency appreciated today. The fund chart also looks good.

Current Prediction

Short term: triangle points to 670

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

23rd February: A break above 570 on strong volume will give us a target of 800.

Current Prediction

Short term: none yet, but could be soon.

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

16th February: There is still a chance that the index will reverse and hit 800 in the not to distant future. We'll have to wait and see.

Current Prediction

Short term: none. Our reverse head and shoulders pointing to 740 is cancelled.

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.
10th February: There is a good chance that the index will soon hit 800. All depends on the 570 resistance point. This might take a while to break.

Current Prediction

Short term: reverse head and shoulders with target of 740.

Long term: none, but keep an eye on the long term pattern pointing to 150. This is not valid due to volume patterns. See below.

31st January: A breakout from a new reversal pattern occurred last Friday, albeit on low volume. The target is 740.

The currency is dangerous. It could fall to 2,400, unless it breaks the 17,000 level in a day or two.

Current Prediction

Short term: reverse head and shoulders with target of 740.

Long term: supports at 280 and 200

26th January: The index pulled back from the neckline of a new, possible, reverse head and shoulders. This is well within expectations of making a new reversal pattern pointing to 730. It would be surprising if Korea, the last to succumb to crisis, should be the first to break out the bear mode. But I suppose it's possible.

The currency is dangerous. It could fall to 2,400, unless it breaks the 17,000 level in a day or two.

Current Prediction

Short term: none: double bottom has been met. New pattern could be forming.

Long term: supports at 280 and 200

12th January: The index shot up a few percent on opening this morning. If the market closes on strong volume at these opening levels, we will have a confirmed double bottom pointing to 550 as a minimum target.

For those intrepid enough to trade this market, note that the currency volatility adds another risk. Note also that the target of 550 is a minimum target. There is no guarantee of a long term durable reversal. I urge caution in the medium term. But the short term is clear.

Current Prediction

Short term: Double bottom reversal with minimum target of 550. But currency has not reversed. At best it has stabilized. But not with any sign of durability.

Medium term: regional failure in Japan and Hong Kong could depress the market in the medium term. Rally might fizzle.

Long term: supports at 280 and 200

5th January: The market slept last week. No update.



1997

29th December: The short term rally happened. Now the danger of a fall to 330, 280 and then 200. Possible double bottom at the current level. But the long term chart doesn't show support. Currency has hit resistance at current level.

Current Prediction

Short term: resistance at 400.

Long term: supports at 280 and 200

8th December: A nice turn last week on the long term support. The fund has broken out of a down channel, but it still has another channel to break.

Current Prediction

Short term: resistance at 445 and 460

Long term: possible support at current level. Nice turn.

1st December: So much for 450. That came and went too easily. Now the index is drifting. There is a good long term support but it is nothing without a turn or a reversal pattern.

17th November: A valid target of 450 on the medium term chart is yet to be fulfilled. But the long term support at 460 might intervene.

Current Prediction

Short term: a head and shoulders points to 450.

Long term: possible support at current level.

27th October: The long term support failed by a dash last week. The index could keep falling to 460, the next support.

Current Prediction

Short term: a head and shoulders points to 560. This target was reached last week. 540 is still possible mid week. But I doubt that the market is going much lower.

Long term: possible fall to 460 on the weekly chart.

20th October: That might be the bottom: last week the weekly index closed on the long term support. There might be a little weakness in the middle of the week. But don't be surprised if the index turns at this point. Get a few pennies ready.

Current Prediction

Short term: a head and shoulders points to 560. This target was reached last week. 540 is still possible mid week. But I doubt that the market is going much lower.

Long term: support at current level on the weekly chart.

26th September: Those of you who took my advice last week and dozed off will have a rude shock to find the index closed at 640. The good news is that at this level, the index is right on the five year support. The bad news: if it falls any further this week, it will probably keep falling to 560, and possibly 460.

Current Prediction

Short term: none: resistance at 750, support at 670.

Long term: none. The reverse head and shoulders is cancelled.

15th September: Not much happened last week. The turn on the green neckline of our reverse head and shoulders held. But nothing exciting to report.

8th September: The index turned last week on the neckline of our reverse head and shoulders. No clear indication of what is happening. Triangles in this market are unreliable. Accordingly, our triangle targets are of little value.

1st September: More misery: the index fell through both of my supports last week. It now appears that the neckline of the reverse head and shoulders at 660 will be tested. If it fails, so too will our bullish scenario.

Current Prediction

Short term: 650 or 660 is the long term support. If the index turns here, the current bearishness will be a short-term phenomenon. If it fails, 500 is the next support.

25th August: A bit of meandering. 705 is the key support this week. Below that figure its back to 680. The long term trend is still positive.

18th August: Our symmetrical triangle has metamorphosed into a falling wedge. The latter pattern is a bullish sign. It looks as though the right shoulder of a reverse head and shoulders is forming. 790 would have to break. It is worth waiting for.

Current Prediction

Short term: rising wedge, pointing up to 790 at least.

Medium term: Reverse head and shoulders or double bottom with target at 850 (830 on the weekly chart). Short term target and resistance at 800.

Long term, a break above 790 will give us a reverse head and shoulders with a target of 1,040. This is expected, according to the long term chart, which is currently on course for a target of 850.

11th August: The medium term supports cast doubt on our prediction of 680. The index has turned on a good support and volume is increasing as the index slowly rises. There are still a few obstacles to overcome, as the charts below reveal.

28th July: The index is holding quite resiliently in its ascending channel. If the channel doesn't break, we may have an end-run, cancelling our prediction of 680. Note that the long term is bullish. The current downtrend should be temporary.

Current Prediction: Small symmetrical triangle with target of 680, making a pullback to the neckline of our reverse head and shoulders.

Reverse head and shoulders or double bottom with target at 850 (830 on the weekly chart). Short term target and resistance at 800.

Long term, a break above 790 will give us a reverse head and shoulders with a target of 1,040. This is expected, according to the long term chart, which is currently on course for a target of 850.

20th July: A bit weaker than expected. But nothing to cast doubt over our long term bullish prediction.

Current Prediction: Small symmetrical triangle with target of 680, making a pullback to the neckline of our reverse head and shoulders.

Reverse head and shoulders or double bottom with target at 850 (830 on the weekly chart). Short term target and resistance at 800.

Long term, a break above 790 will give us a reverse head and shoulders with a target of 1,040. This is expected, according to the long term chart, which is currently on course for a target of 850.

14th July: Not much to write home about this week. Volume is picking up.

8th July: The index completed its pullback to the 740 level and turned up nicely, giving fuel to our prediction. See the medium term chart below for the significance of 790.

Current Prediction: Reverse head and shoulders or double bottom with target at 850 (830 on the weekly chart). Short term target and resistance at 800.

Long term, a break above 790 will give us a reverse head and shoulders with a target of 1,040. This is expected, according to the long term chart, which is currently on course for a target of 850.

29th June: Still reasonably safe, although the index is testing our nerves. It may even fall to 725, as the rising channel shows.

Current Prediction: Reverse head and shoulders or double bottom with target at 850 (830 on the weekly chart). Short term target and resistance at 800.

Long term, we can expect soon to have (but not reach) a target of 1,040. As the index approaches its current target of 850, it will break through the neckline shown in pink and make a new reverse head and shoulders, giving us the higher target.

23rd June: The index turned as expected and pulled back to a good support (blue line). It could now pull back to 742, making a new right shoulder for yet another reverse head and shoulders that will give a new target of 1,040. The pattern will break if the index reaches its current target of 850.

Current Prediction: Reverse head and shoulders or double bottom with target at 850 (830 on the weekly chart). Short term target and resistance at 800.

Long term, we can expect soon a target of 1,040. As the index approaches its current target of 850, it will break through the neckline shown in pink and make a new reverse head and shoulders..

16th June: Last week the index continued in its red channel up towards the first target of 800; the fund chart broke out of a persistently restraining resistance point, but the long term chart show imminent danger of correction. Volume is increasing felicitously.

9th June: The index was up to 775 today. The short term target of 800 could be reached within the red channel shown in the chart below; i.e., quite likely this week or next. But there is strong resistance on the weekly chart at this point.

2nd June: The index is moving as expected. It reached 760 today, passing through short term resistance.

26th May: Some confusion and dithering last week could be nothing more than a pullback. It's not surprising that there's confusion, given the number of false signals that the market has given recently. But volume last week was most encouraging. And the general volume increase since the beginning of this year gives cause for hope. Also, the long term chart shows a breakout from a symmetrical triangle. All very encouraging. But past disappointments give cause for caution.

20th May: At last, the equivocal KCPI has shown its face, breaking above all of our resistance points and indicating a short term target of 850. Oh happy days all of you bottom fishers who took the plunge when the index was still in limbo. But there's plenty of time for us Johnny-cum-latelys. The current reversal may herald a primary reversal, with the possibility of 50% gains over the next year.

12th May: This is a very undecided market. The market fell through the neckline of our reverse head and shoulders, (grey line) cancelling that pattern. Note that the same thing happened in February. Very tricky. The pattern looks like a symmetrical triangle. But volume is steadily increasing, while, for a valid symmetrical triangle, it should be decreasing throughout the pattern.

We can therefore only wait for one of the red lines to break, (call it a collection of reverse head and shoulders or a symmetrical triangle or whatever).

5th May: The index appears to have made another sloping reverse head and shoulders that could take it up to 830, cancelling our prediction of 590, yet again. I say "appears" because we were disappointed by a perfect pattern in early February and we wouldn't like to get caught with that sort of mistake again.

But looking squarely at the pattern, we see, albeit unsymmetrical, a left shoulder, a head (which is itself a head and shoulders) and a right shoulder (which itself could be construed as a head and shoulders). All of these heads and shoulders are attended by rising volume, since October (or November) last year, which supports the prediction.

Finally, we had a breakout last week with tremendous volume of 1.3 trillion won, double the usual daily turnover. What more do we need? A little angel to come down and wave a wand? That would be nice. But in the absence of something fantastical, a little skepticism would be in order.

Note that the weekly chart appears to have reversed with a triangle.

The only cloud in this rosy picture is the fund chart, which suggests a downtrend is still current.

28th April: No direction yet revealed. However, the fund chart shows a rather negative phenomenon. Despite the rises in the index, the fund chart, see below, has not managed to recover above the neckline. It is a mere pullback. It portends weakness in the market.

8th April: Nice break out of the channel that has been trending down since May last year. We have a rectangle that could be a double bottom. A break above 725 on strong volume would be the buy signal.

28th March: Another pullback to our neckline at around 660. So now it looks as though a double bottom might be forming. But we would need a break above 730, on high volume, to confirm this pattern. At the moment, all we have is a pullback. 590 is still the current prediction.

17th March: The 590 picture becomes clearer. We now have a double top with the same target as the long term objectives. Volume is clearly higher on the first head, which is sharp compared with the round second head. This conforms with classic double top theory.

10th March: Getting a little too weak for comfort. Danger of a double top at 720 is looming. Average volume is rising, but the first peak has higher volume than the second, more rounded peak. This spells danger. A fall below 660 would confirm this prediction.

3rd March: The KCPI fell a little too far for bullish comfort last week. Not to worry. Volume hasn't fallen off too drastically. We might be seeing the formation of another little shoulder on the ascending (pink) line, or the formation of a shoulder on the violet line.

On the other hand, a fall below 660 would be fatal, spelling a double top that would take us back to that almost forgotten target of 590 (Oh my God! Not the 590 target again! I thought we had finally got that out of our system). Average volume is increasing (this detracts from the double top scenario) but volume is higher on the first top than it is on the second top. This is bearish. Let's see what this week brings.

14th February: The index broke out of another of our reverse head and shoulder patterns this week. The new neckline is shown in orange line. The target is 835. Our next hurdle is the pink line at around 740. Once broken, this will give us a new, higher target.

10th February: I still have half a bet on the sloping reverse head and shoulders that I first mentioned last week. The pink line shows the neckline of an upward sloping pattern. But the downward sloping pattern would be just as effective. Thus a break above 685 (green line ignoring premature breakout), or 715 to be safe (orange line as neckline), on high volume, would confirm the pattern. That would put to bed my prediction of 590, (which I have been harping about for the past month or two).

Increasing volume supports the reverse head and shoulders scenario, as does the history of the market.

27th January: It's too early to say for sure, but it looks as though an upward-sloping reverse head and shoulders is forming. Korea habitually reverses on sloping head and shoulders patterns and so we may expect this phenomenon to reappear.

All of the indications are present. Volume is picking up nicely on the right side of the shoulder and we have a potential neckline shown by the violet line. But let's not get too excited by it until the index breaks 740 on strong volume.

The other scenario, of course, is that our old target of 590 will yet be touched.

20th January: Well it looks as though we missed that one. The index appears to have turned on the 600 mark, not 590 as we predicted. It would have been a good time to apply the principle "near enough is good enough". The index may yet plunge again and hit our target, but we must still confess to having missed an opportunity of a 15% rise in two weeks for the sake of an extra 1.5% fall.

Note that Korea has previously pulled back above the neckline before falling again. Thus a fall to our target may yet occur.

But we need a little more time to determine where the index is heading now. If we get a reversal pattern, such as a reverse head and shoulders, we may have missed the bottom. But for long and medium term investors, there is still good opportunity for strong upside.

Note that volume is picking up nicely. This suggests a possible reverse head and shoulders in the making. But we have to be patient and see.

13th January: Did we miss out on the opportunity to pick up Korea at the bottom, by a mere 10 point error of forecast? Last week the index shot up by 10% after touching 600 point briefly, intraday. Was this the bottom or is it merely an initial test of the 600 level? Difficult to say. The index is still in its downward channel. And our charts are usually reliable for Korea. We might therefore hope for a further fall, with the index moving below 600. The fund chart still has a way to go.

4th January: The index was closed for most of last week. But our prediction is clear. 590 is our next target. At that point the index will be a very attractive buy.



1996

30th December: The index made a slightly lower low last week.

23rd December: A pretty penny would have been made by those who fished for the bottom at our prediction of 660. (Sadly we were not amongst the group). After hitting our target, the index promptly soared about 7% in two days.

We, nonetheless, prefer caution. The index merely pulled back to the neckline at 700, shown in the chart below. 590 is our next target. Let's all pile in then.

See the big picture below. It confirms our new target of 590 with two patterns.

16th December: The index closed last week at 689, only 23 points above our target minimum of 660. Patience will bring a good buying opportunity. When the index reaches 660, it will have fallen 32% from its high in May

10th December: The index is continuing its fall to our target of 660.

25th November: The index fell quite sharply last week, as expected. Our target is still 660 - at least.

16th November: The KCPI rebounded a little last week but has stalled on the neckline of our head and shoulders pattern. The target of 660 is still on the cards.

November 9th: Although not symmetrical, we could be in the grip of a head and shoulders that would take the index down to 660. Volume does not fall off convincingly on the right shoulder. But I think it would be wise to wait and see.

Note that the fund chart has reached the minimum that I predicted two weeks ago.


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