Key reversal levels for week of August 5, 2013

Our key reversal levels going into next week:

(Legend: W = weekly, D = daily, R = resistance, S = support, Mom = momentum, * = change from previous week/day)

(for more details about these levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )

Important developments last week:

* All covered stock markets are now back to upward daily momentum. This means the rally continues. When we see the momentum turn back down it will be time to look for a potential top again, using the trailing stop we described a few weeks ago.

* The Nikkei closed below its daily key level last Monday, so it went into decline mode. But only briefly as it has climbed back into rally mode on Friday already.

* Bonds (TLT) remain with a fully bearish picture. So we continue to wait for the daily momentum to turn up, which is usually the first sign of a possible bottom.

* Gold has come under pressure since it went into rally mode a few weeks ago. The daily momentum for gold has turned down on Monday and remains down, which means that gold is still at risk of falling back into decline mode. On Friday it tested its daily key level, and closed well above it. It will now take some strong days next week to turn the daily momentum back up, otherwise we may be going to a retest of the recent lows for gold.

* The Euro/US$ has seen its daily momentum turn down again, and is now at risk of going back into decline mode next week.

* Oil (CL) closed just below its daily key level last Tuesday, and snapped right back the next day. This happens sometimes. The daily momentum for oil has turned up, so we have a fully bullish picture in oil again. It will still need follow through next week, otherwise this bounce will be forgotten quickly.

Good luck,

Danny

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