LunaticTrader

Investing with the Moon

Key reversal levels for week of October 13, 2013

Posted by Danny on October 13, 2013

Our key reversal levels going into next week:

Current Status Key (W) MoM (W) Mode Key (D) MoM (D)
Nasdaq 3791.87 BULL S: 3532.05 6.44 (6.85) RALLY * S: 3728.44 -1.66 (-1.65)
S&P 500 1703.20 BULL S: 1625.80 2.69 (2.77) RALLY * S: 1674.44 -4.93 (-5.84)
Nikkei 14404.74 BULL S: 13111 2.30 (2.67) RALLY * S: 14155 -4.74 (-6.18)
FTSE 100 6487.20 BULL S: 6358.50 0.57 (1.07) DECLINE R: 6518.80 -4.93 (-5.84)
DAX 8724.83 BULL S: 8244.60 4.46 (3.60) RALLY * S: 8539.70 0.15 (-0.64)
Bonds (TLT) 105.46 BEAR R: 109.92 -3.70 (-4.18) RALLY S: 105.23 0.43 (0.97)
Gold (spot) 1271.33 BEAR R: 1408.90 -1.03 (-0.34) DECLINE R: 1341.40 -2.6 (-2.06)
EURUSD 1.3538 BULL S: 1.3192 3.60 (3.22) RALLY S: 1.3453 2.15 (2.73)
Oil (CL) 102.02 BULL S: 99.71 1.09 (2.14) DECLINE R: 104.52 -1.83 (-1.79)

(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:

* All covered stock indices fell into decline mode early in the week, only to snap right back into rally mode on the back of political news.
The daily momentum (MoM) for most markets is now again to the upside, after dipping to rather pessimistic values.

* The FTSE 100 continues to lag the other markets and briefly fell below its weekly key reversal level. But it closed the week above the key level so it remains in bull status.

* The weekly MoM is turning down for all markets except the DAX. If the recent correction is over, then we should see the weekly MoM turn back up very soon. If it doesn’t, then look for more weakness in the weeks or months ahead.

* Bonds (TLT) tested their daily key reversal level, and managed to stay above it on a closing basis. So, TLT remains in rally mode but we are still waiting for an attempt to get above the weekly key reversal level at 109.92

* It sounds repetitive, but gold remains in fully bearish mode and continues to weaken. Could very well go to a test of its first bottom target around $1215.

* The EURUSD is still stagnating near its 1.36 top target. The daily MoM remains to the downside, so I continue to watch the daily key reversal for a sell on a daily close below that level.

* Oil remains in decline mode, and is getting close to testing its weekly key reversal level. Daily and weekly MoM remain down for oil, so the bias is still to the downside.

 

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:

* We have no new targets this week.

* After the turnaround we saw last week we can again focus on the top targets in a few stock indices. Some of these targets we reached but not broken a few weeks ago. On the second or third attempt the targets usually get broken, and then we start watching the next target.

* When a second attempt on a top target fails, the ensuing drop is often bigger than the decline after a first failed attempt. So, in the case of the Nasdaq and S&P 500, watch the first top levels carefully. If they get tested again and the market gets rejected again, then we may get big volatility.

 

Good luck,

Danny

 

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