LunaticTrader

Investing with the Moon

Key reversal levels for week of October 7, 2013

Posted by Danny on October 6, 2013

Our key reversal levels going into next week:

Current Status Key (W) MoM (W) Mode Key (D) MoM (D)
Nasdaq 3808 BULL S: 3522.70 6.85 (6.57) RALLY S: 3732.4 3.79 (3.98)
S&P 500 1690.5 BULL S: 1623.60 2.77 (2.71) RALLY S: 1678.14 -1.01 (-0.61)
Nikkei 14024 BULL S: 13071 2.67 (2.44) DECLINE * R: 14420 -1.13 (0.45)
FTSE 100 6454 BULL S: 6365.60 1.07 (1.40) DECLINE R: 6548.50 -4.22 (-3.81)
DAX 8623 BULL S: 8207 3.60 (3.15) RALLY S: 8529 1.82 (2.48)
Bonds (TLT) 105.71 BEAR R: 110.15 -4.18 (-5.0) RALLY S: 105.18 2.96 (3.94)
Gold (spot) 1310 BEAR R: 1414.50 -0.34 (0.12) DECLINE R: 1354.30 -2.49 (-2.52)
EURUSD 1.3552 BULL S: 1.3162 3.22 (2.71) RALLY S: 1.3422 4.66 (4.86)
Oil (CL) 103.84 BULL S: 99.64 2.14 (3.20) DECLINE R: 105.04 -3.21 (-3.88)

(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:

* The Nikkei index has fallen below its daily key reversal and is now in decline mode. Other markets have also come close to doing so.

* The daily MoM continues to go down for all covered stock markets, but the weekly MoM remains to the upside for most of them. This remains consistent with a normal correction from which markets will try to push higher again. If stocks go on to test their weekly key reversal levels, then we can start worrying about the continuation of the bull market. For now, we just go with what we see.

* Bonds (TLT) have stagnated after their recent push to the upside, but remain in rally mode with both the daily and weekly MoM going up. This means we still have a fairly positive picture, but TLT still has to crack above the weekly key reversal level to get into Bull status. This is a bear market rally until proven otherwise.

* Gold remains in fully bearish mode. Both the daily and weekly MoM are down, so we can only repeat that it is still too early to buy.

* The EURUSD has gone to our 1.36 top target and was promptly pushed back down. The daily MoM is down, and we are probably going to a test of the daily key reversal level, which is currently at 1.3422. I would sell Euro on a daily close below that level.

* Oil remains in decline mode, but the bulls are not giving up yet. Daily and weekly MoM are down for oil, so I continue to look for a test of the weekly key reversal level at $99.52. A weekly close below that level would tell us that oil has entered a bear market. If MoM indicators turn back up before oil falls below its weekly key reversal, then it will mean the bull market continues.

 

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 15850 16580 12710  10450
FTSE 100 6800 7100 6205 6110
DAX 8920 9310 * 7870 7210
Bonds (TLT) 111.80 * 128.50 102 96.25
Gold (spot) 1448 1540 1215 1078
EURUSD 1.36 1.3950 1.2870 1.2350
Crude Oil(CL) 109.40 121 94.30 * 89.50

(* = 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:

* The 2nd top target for DAX has been refined to 9310 (from 9205)

* We have a new top target for Bonds (TLT) at 111.80

* There is also a new bottom target for crude oil at $94.30

* The Nasdaq has been testing its top target at 3830 again. If it can push through then it will set sights on 3930.

* The EURUSD is bumping into its 1.36 top target again. On a breakout we can look for 1.3950 to become the next hurdle.

 

Good luck,

Danny

 

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