12 July: Forecast: Stock Indices, Commodities

By | July 12, 2017


  • Commodities:
  • WTI rose on Tuesday as oversupply jitters eased somewhat after the Energy information Agency cut its forecast for 2018 U.S. oil production and a report revealed a dip in European crude stockpiles.
  • The metals squeezed up after Fed board member Lael Brainard sparked doubts about a rate hike later this year, warning that further rate increases could stifle inflation. Further gains were limited ahead of Janet Yellen, who will begin her testimony to Congress later in the coming session
  • Stocks:
  • US stocks closed pretty much unchanged on Tuesday after a volatile session, amid concerns about the impact of the email chain released by Donald Trump Jr during the session that hinted that he had met with a Russian lawyer with ties to the Kremlin.
S&P: 2425
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy: Neutral

The choppy, sideways action continues into the new week, and a similar session today would not surprise while traders stand aside ahead of Janet Yellen’s testimony to Congress. As before, the longer term charts tend to point a little lower so selling into rallies, with a SL placed tight above the all-time high still remains mildly favoured for those who wish to be involved.

Resistance Support
2460 Minor 2410 Session low
2450 20 June high  –All-time high 2407/05 7 July low/6 July low
2447 26 June high 2402 31 May low /30 June low
2436 3 July high 2397 (50% of 2344/2450)
2430 6 July high /10 July high 2384 (61.8% of 2344/2450)

DJI: 21377
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy: Neutral

Ditto S+P

Resistance Support
21600 Minor 21255 (23.6% of 20474/21504) / Rising trend support
21550 Minor 21224 Session low
21504 3 July high  – all-time high 21110 (38.2% of 20474/21504)
21439 6 July high 20985 (50% of 20474/21504)
21399 10 July high 20905 100 DMA

ASX SPI: 5670
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy:  Neutral

As before, the 100 DMA/200 DMA resistance/support levels continue to largely contain the price action. More choppy trade looks likely today, although the 4 hour charts actually point a little higher, possibly to retest the recent highs of 5695/98 although I doubt we head much above here. If wrong, look for a run towards 57110/20. The longer term charts look a little doubtful on the topside, and back below Tuesday’s low of 5647 could see another run towards 5635 and possibly back to 5620. Sidelined.

Resistance Support
5745 4 July high 5647 Session low
5725 Minor 5635 200 DMA
5710 Minor 5622 7 July low
5695/98 Session high/10 July high 5598 21 June low/(38.2% of 5029/5944)
5685 Minor 5575 Minor

XAUUSD: 1217
24 Hour Outlook: Mildly Bullish – Prefer to sell rallies Medium Term: Prefer to sell rallies
Preferred 24-hour Strategy:  The short term momentum indicators look a little more positive again today, buying dips above 1205, looking for a run towards 1225/30 may be a plan, but still prefer to sell rallies for the longer term downtrend to eventually continue.

Gold fell to a low of 1208 before closing at 1217 on Tuesday and a near term squeeze towards 1220/30 would not really surprise given the mildly constructive look of the short term momentum indicators.  On the downside, below the 1205, 10 July low will find bids at 1195/97 and then again in the 1180/90 area although this looks to be delayed.

As before, good resistance lies at 1217 (100 WMA). This may act as a near-term magnate, so leave a little room above here, but looking to sell into rallies towards 1220/25 does seem to be the plan, looking for a stronger test of 1200. I would keep the SL above 1230.

Resistance Support
1241 (38.2% of 1295/1208) 1205/08 Session low/10 July low /(50% pivot of 1122/1295)
1232 200 DMA /200 WMA 1195 10 March low
1229 (23.6% of 1295/1208) 1188 (61.8% pivot of 1122/1295)
1225 Minor 1180 27 Jan low
1217 100 WMA /Session high 1164/65 (76.4% pivot of 1122/1295)/ Major Rising trend support.

XAGUSD: 15.86
24 Hour Outlook: Mildly Bullish Medium Term: Neutral
Preferred 24-hour Strategy:  As with Gold, the short term momentum indicators continue to look mildly positive and Silver looks as though it can give 16.00 a nudge, above which could see a run back towards 16.20.

The downside 15.50 looks fairly solid support right now, but below which could revisit 15.15.

Resistance Support
16.35 Minor 15.65 Minor
16.22 5 July high 15.46 Session low
16.17 7 July high 15.35 Minor
15.95 (38.2% of 18.65/14.29) 15.18 10 July low
15.85 Session high 15.00 Minor

WTI: 45.74
24 Hour Outlook: Prefer to buy dips Medium Term: Neutral
Preferred 24-hour Strategy:  Prefer to buy dips. The EIA 2018 outlook helped WTI on Tuesday and this may continue to underpin the price today. Given the look of the short term momentum indicators trading from the long side is preferred although the price action looks set to remain volatile.

WTI rose from early lows of 43.81 and reached a high 45.86, pretty much where it closed and with the short term charts now suggesting a run towards 46.50 and even 47.20 is possible.

On the downside, support will be seen at 45.00, 44.30 (minor) and at 43.60/80, although this looks unlikely to be seen again on Wednesday. If wrong, a break of 43.25 would then open the way back to 42.00/10. Alongside Yellen, the EIA Crude Oil Stocks Weekly Change, due late today, will be a key driver and until then it is likely to be fairly quiet.

Resistance Support
47.21 5 July high 44.35 Minor
46.70 Minor 43.81 Session low
46.50 6 July high 43.63 10 July low
46.00 Minor 43.25 (76.4% of 42.02/47.29)
45.73 Session high 42.51 23 June low