13 Nov: Forecast: Stocks/ Commodities.

By | November 13, 2017

 

S&P: 2578
Preferred Strategy: The S+P continued to recover from last Thursday’s selloff  and ended the week back at familiar territory, right on the 200 HMA at 2580.

As we said last week, while a test of 2600 should not be ruled out, the longer-term indicators also look a bit toppish, so I am rather wary of being long at these levels although if US bond yields head lower, then the upside will again prevail. Much will depend on the outcome of Trump’s tax reforms, and there are going to be plenty of headlines regarding that in the coming week. As before, I prefer not to be involved at these lofty levels although at this stage there is little sign of a significant turnaround.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
2595 Minor 2571 Friday low
2590 Minor 2563/62 9 Nov low/2 Nov low
2594 9 Nov high  – all-time high 2557 27 Oct low
2585 Friday high 2550 Minor
2580 200 HMA 2545 Minor

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DJI: 23381
Preferred Strategy: Ditto S+P.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
23700 Minor 23336 Friday low
23650 Minor 23258 9 Nov low
23600 Minor 23201 25 Oct low
23555 7 Nov high – all-time high 23198 25 Oct low
23445 Friday high 23150 Minor


ASX SPI: 6034
Preferred Strategy: The ASX SPI200 headed a little lower on Friday but is still close to its highest level since 2008 and seems to have the potential to carry on to even brighter levels. If we do carry on, there seems to be little to stop the SPI reaching 6102, which would close a major chart gap from Dec 2007. I cannot remember what happened then and I am assuming the charts are correct – see below.

The short term momentum indicators are rather more neutral and a choppy session near current level would not surprise while waiting on the lead from the US indices.

Overall, while the daily/weekly momentum indicators remain positive, the shorter term charts are showing a degree of bearish divergence so buying dips is preferred.

24 Hour: Prefer to buy dips Medium Term: Mildly Bullish
Resistance Support
6100 Minor 5998/96 Friday low/9 Nov low
6080 Minor 5968 8 Nov low
6060 Minor 5945 (23.6% of 5626/6046)
6046 9 Nov high 5925 6 Nov low
6035 Friday high 5907 2 Nov low


XAUUSD: 1275
Preferred Strategy: Gold fell by 10oz on Friday after a mysterious trade that moved about 4 million ounces of gold in a matter of minutes and awakened traders as it fell by around 1%.

Overall though, Gold remains well within the recent range of 1265/85 and with the momentum indicators looking neutral we might expect more of the same today, with direction dependent on the dollar/US yields.

Gold is currently at 1275, right in the middle of the range, sitting right on the 100 DMA and is holding above the recent lows, as well as the 200 DMA. As long as we stay above 1260, then we could see another minor squeeze back towards 1280/85 and possibly higher, although more likely it looks set to remain choppy near current levels on Monday.  If we see further gains in the dollar, we should then look for a run towards the 200 DMA, below which would open up 1250, where the rising trend support will provide decent support, but below which could see a quick move towards 1240.For now I remain neutral but prefer to sell rallies.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
1309 (50% of 1357/1261) 1276 100 DMA
1300 Minor 1273 Friday low
1296 17 Oct high 1266 6 Nov low
1291 20 Oct high 1261 6 Oct low/(61.8% of 1205/1358)/200 DMA
1287/88 Friday high/9 Nov high 1251 8 Aug low/Rising trend support


XAGUSD: 16.88
Preferred Strategy: Silver spiked lower on the back of the Gold move on Friday although overall it remains within its recent range, once again straddling 17.00oz and not finishing too far away.

The daily momentum indicators remain neutral, so more of the same could be in store although with the 4 hour momentum indicators leaning mildly lower, we could see a move back towards Friday’s low of 16.80 and eventually to the recent lows at around 16.60.

On the topside, resistance will be seen at 17.00/10 and again at 17.25 although probably not today.

With the daily and weekly indicators running flat, the likely scenario would seem to be further trade at close to the 100 WMA.I remain sidelined, but as before, I would sell 17.25 with a 17.60 SL, but looking for another run towards 16.60.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
17.75 (76.4% of 18.21/16.33) 16.90 100 WMA
17.50 (61.8% of 18.21/16.33) 16.80/78 Friday low/6 Nov low/3 Nov low
17.27 20 Oct high/19 Oct high /200 WMA 16.66/63 1 Nov low/31 Oct low
17.25 8 Nov high 16.60 27 Oct low/(76.4% of 16.32/17.41)
17.10 Friday high 16.50 Minor


WTI: 56.88
Preferred Strategy: WTI settled lower on Friday, as traders continued to eye the rise in U.S. production although the losses were limited given the expectations grew that OPEC will extend its agreement on output cuts. The Baker Hughes report on Friday indicated that the number of oil rigs operating in the US rose to the highest in almost a month, by 9 to 738 and helped to weigh on the price into the weekend.

The short-term momentum indicators are looking a little toppish from here, so further consolidation may be in store, but I would be looking to buy dips towards 56.00/55.50, with a SL placed under 54.40.

In the bigger picture, major Fibo resistance lies at 57.15 (38.2% of 107.65/26.03) but having briefly moved up to 57.89 last week, this will act as strong resistance ahead of the chance of a test of equally strong resistance, the 200 WMA at 59.00. Above here 60.00 would seem a short step away although that is well over the horizon right now.

Buy WTI @ 56.25. SL @ 54.40, TP @ 59.00

24 Hour: Prefer to buy dips Medium Term: Mildly Bullish
Resistance Support
59.00 200 WMA 56.52 Friday low
58.50 Minor 56.39 8 Nov low
57.89 8 Nov high 55.63 6 Nov low
57.50 9 Nov high 54.75 (23.6% of 45.56/57.58)
57.32 Friday high 54.38 3 Nov low