20 Nov: Forecast: Stocks/ Commodities.

By | November 20, 2017


S&P: 2577
Preferred Strategy: US Stocks traded a little lower on Friday, with the S+P falling 10 points to 2575, but leaving the outlook unchanged.

More choppy trade looks possibly on Monday and the 2555/65 area continues to provide decent support although given the building negative look of the longer term momentum indicators, I think we may see this area tested again, below which could see a move towards 2540/50.

As we said before, 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. 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 despite the toppish look of the indicators.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
2610 Minor 2575 Friday low
2605 Minor 2570 Minor
2600 14 Nov high 2562 16 Nov low
2594 9 Nov high  – all-time high 2555 15 Nov low
2589 16 Nov high 2550 (23.6% of 2421/2594)

DJI: 23322
Preferred Strategy: Ditto S+P. I suspect a test of 23200, possibly 23100 lies ahead. So selling into near term strength with a SL above 23470 is preferred.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
23650 Minor 23303 Friday low
23600 Minor 23243 16 Nov low
23555 7 Nov high – all-time high 23198 25 Oct low
23462 16 Nov high 23150 Minor
23439 Friday high 23085 (23.6% of 21578/23555)

ASX SPI: 5970
Preferred Strategy: The ASX SPI200 had a choppy 5956/96 range on Friday and the momentum indicators hint that we could be in for something similar today.

The 4 hour indicators are now pretty neutral and minor resistance at 5980 may cap it ahead of 5995/6000, which would see decent sellers, but above which could see a return to the recent 6046 high

The dailies are pointing increasingly lower though, and if the US indices head in the same direction then another test of the downside may be on the cards, where 5950/60 will provide minor support ahead of the 5927, 16 Nov low. Below that would extend to 5900 and on to 5880, albeit not today.

In the longer term, the weeklies still point higher 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

24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
6050 Minor 5959 Friday low
6043/46 13 Nov high/9 Nov high 5940 Minor
6025 Minor 5927 16 Nov low
6000 Psychological 5907 2 Nov low
5996 Friday high 5885 (38.2% of 5626/6046)

XAUUSD: 1294
Preferred Strategy: Gold rose sharply on Friday, on the back of a rise in geopolitical uncertainty after North Korea ruled out negotiations with Washington on curbing its nuclear weapons programme. The weaker US$ also helped underpin Gold which reached 1297 and now looks capable of further gains towards 1310/15 above which would look towards 1320.

If we see the dollar regain its recent losses and risk sentiment improve over the coming week, we could then see a return to 1275, where strong support lies but below which would open up the chance of a move to 1260 and then to 1250, where the rising trend support will provide decent support.

24 Hour: Mildly Bullish – Prefer to buy dips Medium Term: Neutral
Resistance Support
1320 (61.8% of 1357/1261) 1288 Minor
1313 26 Sept high 1280 Minor
1309 (50% of 1357/1261) 1276 100 DMA
1300 Minor 1266 6 Nov low
1296 17 Oct high/Daily cloud base /Friday high 1261 6 Oct low/(61.8% of 1205/1358)/200 DMA

XAGUSD: 17.27
Preferred Strategy: Silver coat-tailed Gold and reached a 1 month high of 17.38 on Friday, and now seems capable of heading on towards the October high of 17.46, which should be decent resistance. The dailies are still rather neutral though, so I would not be getting too excited here given the confluence of the major moving averages at current levels which may act as a near term magnate, but further gains could then see a run towards 17.75.

On the downside, support will be seen at 17.15 and then at 17.00/05 below which would return to 16.85/90 but right now this seems unlikely.

24 Hour: Neutral  – Mildly Bullish Medium Term: Neutral
Resistance Support
17.85 Minor 17.20/15 200 WMA/200 DMA
17.75 (76.4% of 18.21/16.33) 17.02 Friday low /100 WMA
17.65 Minor 16.96 15 Nov low /16 Nov low
17.46/50 16 Oct high/(61.8% of 18.21/16.33) 16.90/87 100 WMA /14 Nov low
17.38 Friday high 16.80/78 10 Nov low/6 Nov low/3 Nov low

WTI: 56.70
Preferred Strategy: WTI ended the week with a good bounce after Saudi Arabia moved to dispel doubts that Russia is ready to extend output curbs, and having easily held on to the 55.00 level Friday it finished with a steady climb higher to end the week at 56.70 a daily gain of 2.5%

With the short term momentum indicators looking a little more positive we could see further gains today, with minor resistance above 56.75 to be seen at the 13 Nov high of 57.13, ahead of the recent trend high at 57.89.

The dailies look a little uncertain about the topside in the near term and if we do head lower again, support will arrive at 56.00, at 55.40 and then at 54.75, which if seen would possibly present a buying opportunity and a long as we stay above the rising trend support, now at 52.90, I prefer to look for areas to buy dips.

In the bigger picture the weeklies remain positive, and 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: Prefer to buy dips Medium Term: Cautiously Bullish – but prefer to buy dips towards 53.00/50.
Resistance Support
59.00 200 WMA 56.00 Minor
58.50 Minor 55.38 Friday low
57.89 8 Nov high 54.91 16 Nov low
57.13 13 Nov high 54.75/79 (23.6% of 45.56/57.89) 14 Nov low
56.73/75 Friday high/14 Nov high 54.10 (23.6% of 42.03/57.89)