Our key reversal levels going into next week:
| Status | Key (W) | Mom (W) | Mode | Key (D) | Mom (D) | |
| Nasdaq | BULL | S: 3375 | Up | RALLY | S: 3597 | Down |
| S&P 500 | BULL | S: 1586.80 | Up | RALLY | S: 1675.70 | Down |
| Nikkei | BULL | S: 12623 | Down * | DECLINE | R: 14207 | Down |
| FTSE 100 | BULL | S: 6296 | Up | RALLY | S: 6508 | Down |
| DAX | BULL | S: 7925 | Up | RALLY | S: 8227 | Down |
| Bonds (TLT) | BEAR | R: 114.34 | Up * | DECLINE | R: 107.81 | Up |
| Gold (spot) | BEAR | R: 1422 | Up | DECLINE | R: 1314.60 | Up * |
| Euro/US$ | BULL | S: 1.3001 | Up | RALLY | S: 1.3171 | Up |
| Crude Oil(CL) | BULL | S: 97.10 | Up | RALLY * | S: 103.59 | Down |
(Legend: W = weekly, D = daily, R = resistance, S = support, Mom = momentum, * = change from previous week/day)
(for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )
Important developments last week:
* The weekly momentum for the Nikkei index has turned down, which means the continuation of its bull status is in question. The 12623 level is now the major key reversal level, which has to hold on a weekly closing basis.
* All covered stock markets have seen their daily momentum turn down last week. Not a reason for instant panic, but we now watch whether these markets can stay in rally mode or fall into declining mode, as the Nikkei has done already. The FTSE100 is very close to electing decline mode, and also the S&P 500 is sitting only 1% above its daily key reversal level.
* Last week we said clouds are starting to gather above stock markets, and that has continued last week. This is how a fully bullish picture weakens gradually, and that’s why it is useful to keep an eye on several major stock markets.
* The picture for bonds (TLT) is improving. The daily momentum turned up last Wednesday and now the weekly momentum has turned up as well. Bonds are close to going into rally mode, which would mean we can set sights on rising to the weekly key level at 114.34.
* Gold has fallen below its daily key last week and is now in decline mode again. The good news is that we didn’t see much follow through to the downside, and more importantly, the daily momentum for gold turned back up on Friday. A daily close above $1314.60 will put gold back in rally mode, and would be a signal to buy.
* The Euro/US$ is back to a fully bullish picture. But it’s daily momentum is starting to flatten out and may turn down next week.
* Crude oil continues to look for direction. It fell below its daily key level on Thursday, only to climb right back into rally mode on Friday. There seems to be strong buying at the $103 level, but at this point it is tough to say where it will go next. The daily momentum for oil remains down at the moment, so unless we see good follow through next week this may prove to be another dead cat bounce.
Good luck,
Danny
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