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Key reversal levels for week of September 16, 2013

Posted by Dan on September 15, 2013

Our key reversal levels going into next week:

Current Status Key (W) MoM (W) Mode Key (D) MoM (D)
Nasdaq 3722 BULL S: 3449 5.94 (6.07) RALLY S: 3643 6.48 (5.93)
S&P 500 1688 BULL S: 1603.40 2.31 (2.78) RALLY * S: 1657.60 5.27 (4.25)
Nikkei 14405 BULL S: 12814 1.08 (0.9) RALLY S: 13890 5.99 (5.72)
FTSE 100 6584 BULL S: 6337 1.43 (1.39) RALLY * S: 6491 3.36 (3.02)
DAX 8509 BULL S: 8035 2.04 (2.06) RALLY * S: 8278 4.21 (2.88)
Bonds (TLT) 103.55 BEAR R: 111.17 -6.28 (-6.46) DECLINE R: 104.49 -2.99 (-3.29)
Gold (spot) 1325.8 BEAR R: 1429.20 0.57 (0.20) DECLINE * R: 1381.20 -3.0 (-1.76)
Euro/US$ 1.3298 BULL S: 1.3075 2.01 (2.36) RALLY * S: 1.3213 -0.15 (-1.11)
Oil (CL) 108.21 BULL S: 98.85 4.94 (5.09) RALLY S: 106.50 0.98 (1.29)

(Legend: W = weekly, D = daily, R = resistance, S = support, MoM = MoM indicator, * = changed from last week)
(for more details about these key levels, see: )
(for information about the MoM indicator, see: )

Important developments in the key reversal levels last week:

* All covered stock markets are back in rally mode with daily momentum (MoM) going up nicely. Weekly momentum for most markets is now starting to turn back up as well, which means stocks will probably be showing a fully bullish picture again by next week… unless we get a sudden downturn.

* All stock markets remain in bull status, and well above their weekly key reversal levels.

* Bonds (TLT) are still in bear status and decline mode. But both the daily and weekly MoM are going up. Bonds are coming off a very pessimistic MoM-7.7 bottom on the weekly chart, which indicates a nice rally is in the cards once it can close above its daily key reversal level at $104.49. This could happen as soon as the Fed announces tapering of its QE program in a classic “sell the rumor and buy the news” reflex.

* Gold has gone into decline mode, and is now seeing quickly falling daily MoM. I wouldn’t consider to buy gold until we see MoM stabilize and turn up again.

* The Euro/US$ is back into rally mode, but not very convincingly. This remains a very choppy market, with little or no momentum either way. It will go into a good trending move eventually, but we have to be patient. I think the better odds are for a move to the downside, so on a close below the daily key level at 1.3213 I would consider taking short positions.

* Oil remains in rally mode, but both the daily and weekly MoM are going down. The repeated failure to climb above $110 and the weakening momentum suggest that the path of least resistance is down for oil. Time will tell.


And here are our key target zones (we recommend using a +/-1% zone around these targets):

 Key Targets Top Top2 Bottom Bottom2
Nasdaq 3730 3830 3530  3210
S&P 500 1738 1799 1576 1522
Nikkei 16580 17980 12710  10450
FTSE 100 6750 7100 6205 6110
DAX 8550 8920 7870 7210
Bonds (TLT) 128.50 134 102 96.25
Gold (spot) 1448 1540 1078 1001
Euro/US$ 1.36 1.3950 1.2870 * 1.2350
Crude Oil(CL) 109.40 121 89.50 77

(* = new target, Bold = closely matches a major weekly key target )
(for more details about these key targets, see: )

Important developments last week:

* We have one new bottom target for the Euro/US$ at 1.2870.

* The Nasdaq reached its top target at 3730 last Tuesday and has remained stuck at that level for the rest of the week.

* The DAX is also close to its top target at 8550.

* Bonds (TLT) are testing their bottom target at 102 again.

* Oil seems to have failed on its second attempt to get above its $109.40 top target.

Good luck,


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