3 May: Forecast: Stock Indices, Commodities

By | May 3, 2017


S&P: 2384

US stocks are steady on Tuesday, with the S+P confined within recent parameters, leaving the outlook unchanged. (Tuesday range 2382/88)

As before, the momentum indicators still look mixed and another rangebound session would not really surprise while waiting on today’s FOMC decision. The dailies may be picking up a mildly constructive tone although I would not be getting too carried away in either direction at this stage, and I would continue to trade the range while below 2400. A break of the all-time high at 2400 could herald the start of a new leg higher, so I would be keeping stops on any shorts fairly tight. The downside will continue to see bids at 2365/75 and again at around 2350/55.

 24 Hour: Neutral Medium Term: Neutral
Resistance Support
2410 Minor 2377 1 May low
2405 Minor 2375 Minor
2400 1 March/All time high 2367 25 Apr low
2394 26 Apr high 2355 Minor
2390 1 May high 2348 Chart gap

DJI: 20861

Ditto S+P. Tuesday range: 20835/20892

I suspect we are going to continue to chop around below the 21159 all-time high for the next few days, but beware of a topside break which could herald the start of a new leg higher, so keep stops tight above 21160.

24 Hour: Neutral Medium Term: Neutral
                                         Resistance Support
21159 1 Mar/All time high 20828 1 May low
21129 2 Mar high 20800 Minor
21035 3 Mar high 20765 Minor
21009 26 Apr high 20700 Minor
20927 28 Apr high 20630 24 Apr low

ASX SPI: 5928

The ASX had a choppy session, falling sharply from 5940 to 5899 in Australian yesterday before recovering, to close mid-range and leaving the outlook unchanged.

The short term momentum indicators are fairly flat, while the dailies do look mildly constructive but may be hinting at some bearish divergence, so some caution is warranted. The trend still points higher, so buying dips, looking for a squeeze towards 6000 seems to be the plan, although as before, I would be keeping stops tight below the 1 May low of 5891.

On the downside, minor support will be seen at 5915 ahead of 5890/00, below which would allow a return to 5875 although this looks unlikely to be bothered for a while.

Overall a neutral stance is required and we may be in for another range trade, using 5900/40 as a guide.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
6010 15 Mar 2015 high 5915 100 HMA
6000 Psychological 5899 Session low
5985 Minor 5891 1 May low
5970 Minor 5876 28 Apr low /(23.6% of 5655/5944)
5944 1 May high 5865 Minor

XAUUSD: 1256

Gold is steady on Tuesday, confined within a tight range and leaving the outlook unchanged (1252/58).

The 200 DMA/Fibo support should continue to support the price at the current level, but below which could see a run to 1245 and possibly to 1235, albeit possibly not today, at least until the FOMC decision. If wrong look for a run towards 1220 and eventually to 1210. On the topside, if we get back above 1260, resistance will again be seen at around 1265/70 ahead of 1280/85. With the momentum indicators’ now aligning lower, a mildly bearish stance is favoured but without looking for too much today, ahead of the FOMC meeting

24 Hour: Prefer to sell rallies Medium Term: Mildly bearish
                                         Resistance Support
1285 Descending trend resistance 1252 Session low /200 DMA
1278 25 Apr high 1244 (50% of 1195/1295)
1271 1 May high 1233/35 (61.8% of 1195/1295) /200 WMA/Rising trend support
1263 100 HMA 1228 (38.2% of 1122/1295)
1258 Session high 1218 (76.4% of 1195/1295)

XAGUSD: 16.79

Silver has found a bit of a base at the Fibo support, seen at 16.70, but although we saw a squeeze back to 17.00 the price has again slipped and is closing at 16.80, leaving the downside under further potential pressure.

16.70 should again be decent Fibo support, but with the daily momentum indicators looking heavy, the way now seems open for a run to test the January low, below which there is little to hold it up until 16.35. Resistance will again arrive at 17.00, 17.20 and again at 17.35. Trading from the short side is again the preferred strategy.

24 Hour: Mildly bearish Medium Term: Mildly bearish
Resistance Support
17.70 (50% pivot of 18.65/16.79) 16.79 (61.8% of 15.63/18.65)/ 1,2 May lows
17.50 (38.2% of 18.65/16.79) 16.63 27 Jan low
17.35 100 DMA 16.50 Minor
17.20 (23.6% of 18.65/16.79) 16.35 (76.4% of 15.63/18.65)
17.00 Session high 16.25 6 Jan low

WTI: 48.04

WTI fell another 2% on Tuesday, adding to the 1% loss of the previous session, with traders concerned about the OPEC cuts being offset by sharp rise in US production, and comes about despite expectations that US stockpiles are set to fall for a fourth straight week. Having seen a squeeze up to test the 200 DMA today, reaching 49.26, it was then one way traffic to the downside, to 47.33, before a mild bounce to close the day at 48.00.

The momentum indicators are still looking negative, and with the dailies appearing to be pointing increasingly lower WTI could potentially see a run below the session low, to the triple bottom at 47.05. This should be strong support if we get there although a break would open the way to a quick move towards 45.25 (76.4% of 42.18/55.21).

On the topside, resistance will again be seen at the 200 DMA, which may yet continue to act as a pivot, above which, the recent highs at 49.30, 49.73 and 50.17 will all see sellers. Looking to sell into strength seems to be the play for now.

 24 Hour: Prefer to sell rallies Medium Term: Neutral – Mildly bearish
Resistance Support
50.30 (38.2% of 53.75/48.20) 48.56 1 May low
50.17 26 Apr high 48.20 28 Apr low
49.73 28 Apr high 47.50 Minor
49.29 1 May high 47.06/07 14/22/27 Mar lows
49.05 200 DMA 46.50 Minor