LunaticTrader

Investing with the Moon

Key reversal levels for week of September 23, 2013

Posted by Danny on September 21, 2013

Our key reversal levels going into next week:

Current Status Key (W) MoM (W) Mode Key (D) MoM (D)
Nasdaq 3775 BULL S: 3473 6.13 (5.94) RALLY S: 3687 7.80 (7.49)
S&P 500 1710 BULL S: 1611.60 2.50 (2.31) RALLY S: 1671.80 8.46 (8.41)
Nikkei 14742 BULL S: 12908 1.64 (1.08) RALLY S: 14064 5.78 (5.69)
FTSE 100 6596 BULL S: 6354 1.47 (1.43) RALLY S: 6519 2.79 (2.98)
DAX 8676 BULL S: 8096 2.54 (2.04) RALLY S: 8421 8.28 (8.16)
Bonds (TLT) 104.92 BEAR R: 110.70 -5.83 (-6.28) RALLY * S: 103.52 0.59 (-0.38)
Gold (spot) 1325.6 BEAR R: 1423.10 0.43 (0.57) DECLINE R: 1372.90 -3.36 (-3.89)
EURUSD 1.3525 BULL S: 1.3098 2.24 (2.01) RALLY S: 1.3286 5.79 (4.56)
Oil (CL) 104.75 BULL S: 99.28 4.26 (4.94) DECLINE * R: 108.00 -1.97 (-1.34)

(Legend: W = weekly, D = daily, R = resistance, S = support, MoM = MoM indicator, * = changed from last week)
(for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )
(for information about the MoM indicator, see: https://lunatictrader.wordpress.com/2013/09/14/mom-indicator/ )

Important developments in the key reversal levels last week:

* Stock markets have continued to rally, and weekly MoM is now up again for all covered markets. Daily MoM is slightly down for FTSE100, which has been lagging a bit, but remains up for the other markets.

* For S&P 500 and DAX we see that MoM has climbed into the very optimistic +8 area, with the Nasdaq also getting close. They can stay above 8 for a while, but a pullback will start sooner or later. When MoM starts pulling back from levels above 8, that’s when I start trailing my stop-loss very close to the market. See my recent post: Trailing stops when you think a peak is near

* Bonds (TLT) have gone into rally mode, as was already suggested by rising MoM last week. Coming off a double bottom, this rally has better chances of seeing some follow through than the failed breakout we got in August.

* Gold bounced back towards its daily key reversal level last week, but failed to get above it and closed the week nearly unchanged. The picture remains bearish. Weekly MoM has turned down, while the daily MoM has turned up with the mid-week bounce.

* The EURUSD rally has gathered some steam last week, so maybe the breakout from choppy range will be unexpectedly to the upside. But, our 1.36 target level will have to be taken out if this rally is to continue (see target zones).

* Oil has gone into decline mode again, as was indicated by weakening MoM already. Also here it could mark the end of a choppy trading range. I am now looking for the weekly key reversal level to get tested, currently at $99.28

 

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

 Key Targets Top Top2 Bottom Bottom2
Nasdaq 3830 3930 3530  3210
S&P 500 1738 1799 1576 1522
Nikkei 16580 17980 12710  10450
FTSE 100 6800 * 7100 6205 6110
DAX 8920 9205 7870 7210
Bonds (TLT) 128.50 134 102 96.25
Gold (spot) 1448 1540 1215 * 1078
EURUSD 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: https://lunatictrader.wordpress.com/2013/08/20/key-target-levels/ )

Important developments last week:

* We have a new bottom target for gold at $1215.

* The top target for FTSE100 at 6750 has been refined to 6800

* The Nasdaq and the DAX have broken above their first top target. Next up for Nasdaq is now 3830 and for the DAX 8920.

* The S&P came close to its top target at 1738 and turned back down from it.

* Bonds (TLT) retested their bottom target at 102, and bounced back up from it.

* The EURUSD is also testing its upside target at 1.36

 

Good luck,

Danny

 

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