2 Mar: Forecast: Stocks, Commodities

By | March 2, 2017


S+P: 2394

Stock Markets liked the tone of Donald Trump’s words yesterday and have soared to new all time highs, with the S+P climbing to 2400. Banks stocks led the way today, liking the increasing idea of a March rate hike; although at these levels you would have thought that much of the “good news” is now priced in.

Technically, the dailies still point higher, so the ongoing drift to new all time highs could well continue as we head above 2400 into new blue sky territory. On the downside, support will now be seen at 2390, 2380 and 2370 ahead of the session low of 2363. I am staying away from this and would rather not be involved at these levels although the squeeze higher looks set to continue and buying dips seems to be the plan. Donald Trump needs to back up his words with actions or there will be a nasty accident, so caution is required.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
2420 Minor 2390 Minor
2415 Minor 2385 Minor
2410 Minor 2380 Minor
2305 Psychological 2375 Minor
2400 Session high  /All time high 2370 Minor

DJI: 21089

Ditto S+P.  The DJI has reached 21159 and looks set to head higher although the euphoria of any potential rate hike now appears to be priced in.

24 Hour: Neutral Medium Term: Neutral
                                         Resistance Support
21350 Minor 21000 Minor
21300 Minor 20900 Minor
21250 Minor 20809 Session low
21200 Minor 20750 Minor
21159 Session high /All time high 20700 Minor

ASX SPI: 5733

Having fallen to a new trend low of 5653, the ASX has turned itself around and climbed steadily higher through the session to finish the day at the highs of 5740.

The hourly momentum indicators are now overbought although the 4 hour charts suggest there is more upside potential, in which case we could take a look at 5760 and eventually to the February high of 5778. Above here, look for a run towards the 5789, 9th Jan high, to 5800 and then to the May 2015 high at 5814. On the downside, support will be seen at 5725 and 5700 although below here seems unlikely in the coming session. Overall, the dailies still look mildly negative, so once again I prefer to sell into strength for a medium term move lower but would keep a tight SL above 5790, as a continuation of the current bull-run in the US markets would drag the ASX higher as well. As for today, look for 5715/60 to cover it.

24 Hour: Mildly bullish Medium Term: Prefer to sell rallies
Resistance Support
5800 Minor 5725 200 HMA
5789 9 Jan high 5700 100 HMA
5778 16 Feb high 5685 Minor
5760 Minor 5670 Minor
5740 Session high 5653 Session low

GOLD: 1249

It has been a choppy session for Gold, initially falling to 1236 support before bouncing late in the day to finish at 1250.

More of the same looks likely, and on the topside the 200 DMA will remain significant resistance and could continue to cap it, but the dailies still look mildly constructive and a topside break of 1260 could then see a run towards 1270, and possibly on to 1285/95 at some stage. On the downside, support will again arrive at 1236. As before, trading from the long side is mildly preferred, looking to buy dips, but with a SL now placed below the important support at 1232/30.

24 Hour: Prefer to buy dips Medium Term: Neutral
Resistance Support
1292 10 Nov high 1243 200 HMA
1286 (76.4% of 1337/1222) 1236 Session low
1261/63 200 DMA / 28 Feb high 1232/30 Rising trend support  (23.6% of 1122/1263)
1258 1 Mar high 1220 Minor
1250 Session high 1210 100 DMA

SILVER: 18.40

Silver had another choppy session in recovering from an early dip to 18.25, to finish just under the session high of 18.46.

The short term momentum indicators still look mildly constructive, hinting at further gains, while the dailies also remain mildly positive, so we could yet be in for a move beyond the current resistance at 18.50 towards minor resistance at 18.65, above which could then see a quick move to 19.00. On the downside, the initial support will again be seen at 18.15/20 ahead of 18.00/17.90. This looks unlikely to be bothered to day, although if wrong further bids would appear at 17.80/75. Buying dips is again preferred, looking for another leg higher although I remain cautious because of the chance of another dollar rally. Keep stops tight below 18.15

24 Hour: Prefer to buy dips Medium Term: Neutral
Resistance Support
19.30 Minor 18.23 Session low
18.98 10 Nov high 18.15 Friday low
18.80 Minor 18.00 200 WMA
18.65 Minor 17.90/94 200 DMA /23 Feb low
18.46/48 Session high/27 Feb high 17.75 13/14/15 Feb lows

OIL (WTI): 53.65

WTI settled a little lower after a familiar range of 53.70/54.44, despite a slower than expected rise in U.S. crude stockpiles, with concerns rising over a glut in U.S. crude oil inventories/production. The EIA said that crude oil inventories rose by 1.5 million, less than forecast but touched a record high of 520.2 million.

The short term momentum indicators are neutral suggesting that the current choppy range will continue, but if we can overcome the 54.50/55.00 area we could head on towards 55.20, beyond which there is not too much to stop it heading 57.00, This is a long way off at this stage. On the downside, support will again be seen in the 53.20/50 area ahead of 53.00 and 52.70. Below there could see a run back to 52.00/51.70 although this seems unlikely. The momentum indicators are neutral and therefore a cautious stance is required.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
55.21 3 Jan high 53.70 Session low
55.00 21 Feb high 53.16 28 Feb  low
54.91 23 Feb high 52.71 16 Feb low
54.59 27 Feb high 52.20 8 Feb low
54.41 Session high 51.70 Minor