Key reversal levels for week of September 9, 2013
Posted by Danny on September 7, 2013
Our key reversal levels going into next week:
|Current||Status||Key (W)||MoM (W)||Mode||Key (D)||MoM (D)|
|Nasdaq||3660||BULL||S: 3426||6.07 (6.69)||RALLY *||S: 3607||0.60 (-0.26)|
|S&P 500||1655||BULL||S: 1598||2.78 (3.79)||DECLINE||R: 1665||-2.34 (-3.58)|
|Nikkei||13861||BULL||S: 12718||0.90 (1.33)||RALLY *||S: 13681||1.83 (0.90)|
|FTSE 100||6547||BULL||S: 6321||1.39 (1.79)||DECLINE||R: 6547||0.11 (-0.68)|
|DAX||8276||BULL||S: 8010||2.06 (2.42)||DECLINE||R: 8305||-2.73 (-3.39)|
|Bonds (TLT)||103.05||BEAR||R: 111.82||-6.46 (-6.73)||DECLINE *||R: 105.17||-0.98 (0.12)|
|Gold (spot)||1391.5||BEAR||R: 1429.50||0.20 (-0.93)||RALLY||S: 1358.40||1.65 (2.63)|
|Euro/US$||1.3176||BULL||S: 1.3066||2.36 (2.66)||DECLINE||R: 1.3284||-4.53 (-4.11)|
|Oil (CL)||110.53||BULL||S: 98.31||5.09 (5.4)||RALLY||S: 105.85||2.39 (2.19)|
(Legend: W = weekly, D = daily, R = resistance, S = support, MoM = momentum monitor, * = changed from previous week/day)
(for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )
Important developments in the key reversal levels last week:
* The Nasdaq and the Nikkei have climbed back into rally mode. Other stock markets may follow as their daily momentum (MoM) has turned up.
* But weekly momentum remains down for all covered stock markets, so the correction may not be over yet. Up to now the correction has been mild and mostly sideways, but unless the weekly momentum turns up again, another swing to the downside is in the cards.
* All stock markets remain in bull status, and well above their weekly key reversal levels.
* Bonds (TLT) have failed to build on last week’s gains and quickly reverted into decline mode again. The weekly momentum for bonds continues to go up however, so this may be just a retest of the recent lows from which another rally can start. See also our notes about the key target zone for bonds.
* Gold has tested its daily key reversal level last week and successfully held above it. The daily MoM continues to be down for gold, so we may get another test and possibly see gold go into decline mode. Watch the daily key level carefully.
* The Euro/US$ stays in decline mode with downward momentum, but remains in bull status as long as it stays above the weekly key reversal level at 1.3066 (on a weekly closing basis). The Euro going into bear status could have consequences for other markets. For example gold has been going up and down together with the Euro in recent months.
* Oil remains in rally mode, and it is clear that a good deal of its strength is based on the ongoing events in the Middle East. The daily momentum has turned up again, but its weekly momentum remains down. So, it is still very much a mixed bag and thus hard to tell in which the direction the next major move of oil prices will go.
And here are our key target zones (we recommend using a +/-1% zone around these targets):
(* = new target, Bold = closely matches a major weekly key target )
(for more details about these key targets, see: https://lunatictrader.wordpress.com/2013/08/20/key-target-levels/ )
I am renaming this to target “zones” rather than target “levels”, which makes it more clear that we don’t expect the targets to be reached exactly
Important developments last week:
* We have one new bottom target for the DAX at 7870.
* Bonds (TLT) have dropped back to their first bottom target at 102, and so far holding above it. If it gets broken then we can set sights on the next bottom target at 96.25
* Crude Oil is once again testing its top target around $110. The daily target is at $109.40 and the weekly target is at $110. It remains a difficult hurdle to take for oil, but if it does break out convincingly then we can set sights on $121 oil. If it fails again, then look for $89.50 oil.