15 Nov: Forecast: Stocks/ Commodities.

By | November 15, 2017


S&P: 2577
Preferred Strategy: US. Stock indexes ended a little lower on Tuesday but recovered from their lows after General Electric plunged for a second straight day and a drop in the oil price hit energy stocks.

Overall though, the 2560/65 support continues to hold and the current consolidation could be a healthy sign for the eventual continuation of the long term uptrend. As we said last week though, while a test of 2600 should not be ruled out, the longer-term indicators do 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 today’s CPI and also on Trump’s tax reforms and as before, I prefer not to be involved at these lofty levels although at this stage there is little sign of a significant turnaround to the longer term uptrend.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
2595 Minor 2570 Minor
2590 Minor 2564/63/62 Session low/9 Nov low/2 Nov low
2594 9 Nov high  – all-time high 2557 27 Oct low
2584/85 13 Nov high/10 Nov high 2550 Minor
2581 Session high 2545 Minor

DJI: 23363
Preferred Strategy: Ditto S+P.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
23650 Minor 23230 Session low
23600 Minor 23201 25 Oct low
23555 7 Nov high – all-time high 23198 25 Oct low
23445 10 Nov high 23150 Minor
23427 13 Nov high 23085 (23.6% of 21578/23555)

ASX SPI: 5951
Preferred Strategy: The ASX SPI200 continues to correct lower as traders take profit after the recent run higher.

The 4 hour momentum indicators are negative although the hourlies have become oversold and are attempting to turn higher, so a choppy session near current level would not surprise while waiting on the lead from the US CPI. Ahead of that, the domestic Wage Price Index may create some waves. On the downside, support will arrive at 5925/35 and again at 5900/10 and 5885.

The weeklies s till point higher though and If we do carry on above the recent  6044 high, there seems to be little to stop the SPI reaching 6102, which would close a major chart gap from Dec 2007.  Ahead of that, today will find offers at 5970, 5885 and 6000 although I would be surprised to see it back up here in the short term.

Overall, while the weekly momentum indicators remain positive, the shorter term charts are showing a degree of bearish divergence so buying dips is preferred and I suspect we could see 5900 before we see 6000.

24 Hour: Mildly Bearish – Prefer to buy dips Medium Term: Mildly Bullish
Resistance Support
6043/46 13 Nov high/9 Nov high 5945 (23.6% of 5626/6046)
6025 Minor 5936 Session low
6000 Minor 5925 6 Nov low
5980 200 HMA 5907 2 Nov low
5965 Minor 5885 (38.2% of 5626/6046)

XAUUSD: 1281
Preferred Strategy: Gold had a choppy session in falling sharply to 1270 before reversing higher equally quickly to a high of 1283. Overall, the 1265/85 range remains intact, and with the momentum indicators looking neutral we might expect more of the same today, with direction dependent on the dollar/US yields/CPI outcome.

A weaker US$ would potentially see gold head back towards 1300/10, which that dailies are now suggesting could be on the cards.  If we see the dollar regain its losses, we could then see a return to 1260/70., where strong support lies but below which would open up 1250, where the rising trend support will provide decent support.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
1309 (50% of 1357/1261) 1276 100 DMA
1296 17 Oct high 1269 Session low
1291 20 Oct high 1266 6 Nov low
1287/88 10 Nov high/9 Nov high 1261 6 Oct low/(61.8% of 1205/1358)/200 DMA
1283 Session high 1251 8 Aug low/Rising trend support

XAGUSD: 17.02
Preferred Strategy: Silver remains choppy, within its recent range and seems set to continue to be so.

Both the short term and the daily momentum indicators are neutral, so more of the same could be in store  and the 16.80/17.25 area seems to still have it covered.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
17.75 (76.4% of 18.21/16.33) 16.90/87 100 WMA /Session low
17.50 (61.8% of 18.21/16.33) 16.80/78 10 Nov 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)
17.09/10 Session high/ /10 Nov high 16.50 Minor

WTI: 55.10
Preferred Strategy: WTI settled 2% lower on Tuesday due to worries over increased US production and with the short-term momentum indicators looking negative and the dailies looking toppish, further downside momentum seems likely. as long as we stay above the rising trend support at 52.50, I prefer to look for areas to buy dips.

Near term (minor) resistance seems set to arrive at 55.75 ahead of 56.20 and 56.75.

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.

24 Hour: Mildly Bearish – Prefer to buy dips Medium Term: Mildly Bullish – but prefer to buy dips
Resistance Support
57.89 8 Nov high 54.75/79 (23.6% of 45.56/57.58) Session low
57.50 9 Nov high 54.38 3 Nov low
57.13 13 Nov high 53.74 30 Oct low
56.75 Session high 53.15 (38.2% of 45.56/57.58)
56.20 Minor 52.50 Rising trend support