5 Feb: Forecast: Commodities/Stock Indices + trade ideas

By | February 5, 2018

 

S&P: 2757
Preferred Strategy:  The S+P fell hard on Friday, down by 2.1%, closing on its lows and looking now as though it has further declines ahead of it.  Worries about the impact of a tightening job market on the prospects for inflation and a surge in bond yields sent investors fleeing equities for the biggest daily percentage loss in 20 months.
1 hour/4 hour indicators: Down Daily Indicators: Down Weekly Indicators:   Up –Overbought
Preferred Strategy:  The long awaited correction is in full flow and the momentum indicators are aligning lower following the S+Ps key weekly reversal. The Weekly Tenkan at 2750 may provide some initial support, but under there we could see further losses, towards 2730 and even 2700, although there is little real support until 2650/70. Sell rallies towards 2770-80 with a SL placed above 2800 seems to be the plan now.
Resistance Support
2800 Minor 2755 Friday low
2795 Minor 2750 Weekly Tenkan
2785 Minor 2735 Minor
2772 Daily Kijun 2725 Minor
2765 Minor 2715 Minor


DJI: 25432
Ditto S+P.
1 hour/4 hour indicators: Down Daily Indicators: Down Weekly Indicators:   Up –Overbought
Preferred Strategy:  The DJI also had a key bearish weekly reversal, coming to rest just above the Weekly Tenkan. A break of this would allow a deeper decline, with little support seen until  24700

Sell rallies towards 25650/700 is preferred with a SL above 2800. Target; 25000.

Resistance Support
26000 Minor 25410 Session low
25900 Minor 25380 Weekly Tenkan
25800 Minor 25200 Minor
25675 Daily Kijun 25100 Minor
25600 Minor 25000 Minor


ASX SPI: 6002
The ASX finished the week back at 6000 and may be attempting be building a topping formation. Right now a neutral stance seems best while waiting on tomorrow’s RBA outcome.
1 hour/4 hour indicators: Turning lower Daily Indicators: Neutral Weekly Indicators:  Turning lower
Preferred Strategy:   The ASX fell from a high of 6071 on Friday to finish at the lows, and given the look of global stocks, further losses seem likely in the days ahead.

With the dailies appearing to be building some downside momentum we may see a run back towards 5960, and possibly 5925, which was last week’s low.  At this stage a cautious stance is required but I mildly prefer to sell rallies, with a SL placed above 6075.

Resistance Support
6090 Minor 5996 Friday low
6071 Friday high 5987 2 Feb  low
6050 Minor 5965 Minor
6035 Minor 5950 Minor
6015 Minor 5924 31 Jan low


XAUUSD: 1333
Gold fell just under 1% on Friday, under pressure from the firmer dollar as traders also eye the chance of higher interest rates and creeping inflation.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning lower Weekly Indicators:  Turning higher?
Preferred Strategy:  With the short term momentum indicators pointing lower and the dailies building an apparent topping formation, selling rallies appears to be the plan, looking for a run back towards 1300 and possibly lower.
Resistance Support
1357 26 Jan high 1327 Friday low
1350 Friday high 1324 18 Jan low
1345 100 MMA /200 HMA 1315 Minor
1340 100 HMA 1308 (23.6% of 1123/1366)
1335 Minor 1300 Minor


XAGUSD: 16.59
Silver is  fell just by 3.5% on Friday, a bigger move than seen elsewhere, under pressure from the firmer dollar as traders also eyed the chance of higher interest rates and creeping inflation.
1 hour/4 hour indicators: Down Daily Indicators: Turning lower Weekly Indicators:  Neutral
Preferred Strategy:  As with Gold, with the short term momentum indicators pointing lower and the dailies also beginning to lean down, selling rallies appears to be the plan, looking for a run towards 15.90/16.00 and possibly lower, towards 15.60.
Resistance Support
17.25 Friday high /100 WMA 16.55 Friday low
17.15 Minor 16.35 Minor
17.00 200 WMA 16.10 Minor
17.85 100 DMA/200 DMA 15.90 200 MMA
16.70 Minor 15.61 12 Dec low


WTI: 65.05
WTI had a volatile ride on Friday, falling from above 66.00 to a low of 64.45 ahead of a bounce into the close, to finish the week at 65.05. The price was not helped by the steep selloff in the energy sector, led by Exxon/Chevron, nor by the NFP inspired selloff of commodities as bond yields and the dollar moved higher.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning lower Weekly Indicators:  Turning higher
Preferred Strategy:   While the longer term uptrend remains intact and the weekly charts retain their positive outlook, both the short term momentum indicators and the dailies are beginning to look heavy, so a more nimble stance is required, and further downside test in the near term would not really surprise.

If so, look for a run towards 64.00/50 and possibly to 63.65, below which would signal that an interim top is in place.

On the topside, resistance will be seen at 66.30/80, which would seem tough to break right now, so selling into strength, with a SL placed above 67.00 may be a plan. If we do break 67.00 for any reason, then it may be that we are on our way to 70+, but this looks unlikely at present.

Resistance Support
66.85 (50% pivot of 107.65/26.03) 64.80 Minor
66.63 25 Jan high 64.45 Friday low
66.44 28 Jan  high 64.00 Minor
66.27 Friday high 63.65 31 Jan low
65.75 Minor 63.00 Minor