22 Jan: Forecast: Commodities/Stock Indices + trade ideas

By | January 22, 2018

With the US$ opening inter-bank trade on Monday under some pressure, commodities look set to remain in demand. Stock indices could see a gap down, which may provide a buying opportunity for when the Senate do finally agree on a Government funding package.

S&P: 2813
Preferred Strategy:  The S+P made another new all-time high on Friday in its never ending rally, and there seems to be little to turn it around although with the daily/weekly charts at overbought extremes I am not tempted to buy it here. I would not be going short though until there are stronger signs of a reversal. Plenty of money has been lost trying to pick a top in this market.
1 hour/4 hour indicators: Turning higher Daily Indicators: Up –Overbought Weekly Indicators:   Up –Overbought
Preferred Strategy:  Despite the increasing risks of staying long, the long term uptrend currently remains intact and continuing to buy dips seems to be the plan. Leave a SL below 2660. I prefer to stand aside.
Resistance Support
2830 Minor 2791 Friday low
2825 Minor 2785 Minor
2820 Minor 2778 17 Jan low
2815 16 Jan  high    – all-time high 2770 Minor
2812 Friday high – all-time high 2760 Minor

DJI: 26060
Ditto S+P.
1 hour/4 hour indicators: Neutral Daily Indicators:  Up –Overbought Weekly Indicators:   Up –Overbought
Preferred Strategy:  Neutral


Resistance Support
26250 Minor 25874 Friday low
26200 Minor 25789 17 Jan low
26146 18 Jan high – all-time high 25700 Minor
26100 Minor 25681 16 Jan low
26084 Friday high 25600 Minor

ASX SPI: 5978


The ASX remained within its recent range on Friday (5946/78) and more of the same looks likely for Monday although we may see an early test of the upside which may present a sell opportunity.
1 hour/4 hour indicators: Turning higher Daily Indicators: Turning lower Weekly Indicators:  Up
Preferred Strategy:   With the NY close being at session highs, the 4 hour charts are looking positive and a near term run towards 6000 may be on the cards. On the other hand, the longer term charts look less certain of the upside, and with the dailies appearing to be building some downside momentum we may eventually see a run back towards 5900. At this stage a cautious stance is required but I mildly prefer to sell rallies, with a SL placed above 6015.
Resistance Support
6080 Minor 5946 Friday low
6059 15 Jan high 5935 17 Jan low
6030 Minor 5925 (38.2% of 5625/6113)
6000 Psychological 5900 Minor
5983/78 18 Jan high /Friday high 5865 (38.2% of 5625/6113)

XAUUSD: 1331
Gold is remains choppy near the top end of its recent uptrend, and with the near term momentum indicators in neutral we may see further sideways trade, with direction dependent on that of the dollar.
1 hour/4 hour indicators: Neutral Daily Indicators: Possible topping formation. Weekly Indicators:  Neutral
Preferred Strategy:  A neutral stance is currently required although with the dailies looking rather toppish, selling into rallies, with a SL placed above 1345 or ideally at 1360 may be a plan.
Resistance Support
1375 6 July high 1325/27 18 Jan low /Friday low
1365 Minor 1320 (23.6% of 1236/1345)
1357 8 Sept high 1310 Minor
1344 100 WMA  /17 Jan high 1303 (38.2% of 1236/1345)
1338 Friday high 1300 Minor

XAGUSD: 17.00
As with Gold, Silver is currently chopping around either side of 17.00, near the top end of its recent uptrend. With the momentum indicators mostly in neutral it seems best left alone right now.
1 hour/4 hour indicators: Neutral Daily Indicators: Neutral Weekly Indicators:  Neutral
Preferred Strategy:  Sidelined


Resistance Support
17.85 Minor 16.91/94 18 Jan low /Friday low
17.65 Minor 16.80 16 Jan low
17.42 15 Jan high 16.75 (38.2% of 15.61/17.42)
17.29 17 Jan high 16.50 (50% of 15.61/17.42)
17.13 18 Jan high /Friday high 16.30 (61.8% of 15.61/17.42)

WTI: 63.45
WTI is losing some upside momentum after its recent run higher and it could be that we see a reversal towards 60.00/61.00 from here. The longer term uptrend remains intact though so buying dips seems to be the plan for medium term traders.
1 hour/4 hour indicators: Neutral Daily Indicators: Possible topping formation. Weekly Indicators:  Turning higher
Preferred Strategy:  Selling rallies, with a SL placed above 64.75 or preferably above 65.00 seems the near term plan. medium term traders may want to look for levels to buy nearer 60.00, with a SL placed under the rising trend support/Fibo levels at around 59.00
Resistance Support
65.50 Minor 62.76 Friday low
65.00 Psychological 63.29 17 Jan low
64.86 15 Jan high 62.50 Minor
64.25 18 Jan high 61.70 Minor
63.70 Friday high 61.00 Minor