LunaticTrader

Investing with the Moon

Key reversal levels for week of October 20, 2013

Posted by Danny on October 20, 2013

I have now automated the calculation of my key reversals to a large extent, saving me time, and from this week onwards the presentation format is changed a bit. The weekly and the daily reversal tables are now shown separately, making space for some additional info to be shown.
A long term investor can do well by going with the weekly table only, while a shorter term swing trader would rather use the daily table and try to trade with the daily trend. But, it is always good to look at the bigger weekly picture first and then consider the daily moves.
Let’s start it off with the new weekly table:

Weekly Current BB Key (W) MoM (W) Weeks % Ch
Nasdaq 3,914.28 3,555.21 6.74 41 26.71
S&P 500 1,744.50 1,632.76 3.10 46 23.17
Nikkei 14,561.54 13,219.07 2.46 47 53.83
FTSE 100 6,622.60 6,369.00 0.59 14 1.19
DAX 8,865.09 8,300.57 5.24 14 7.61
Bonds (TLT) 107.04 109.20 -2.20 22 -8.11
Gold (spot) 1,315.88 1,408.91 -1.60 43 -20.58
$EURUSD 1.3682 1.3224 4.36 12 3.01
Oil (CL) 101.11 99.74 0.11 24 5.79

(Legend:  BB: green = bullish, red = bearish | Key: key reversal level | MoM: MoM indicator | Weeks: weeks since start of current bullish or bearish trend | % Ch: percent change since start of current trend)
(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/ )

So what’s new?

The bullish or bearish status is now given as a bright green or red color in the BB column. Next to it you find our key reversal level, which is the level to watch for stop-loss or for entering/reversing positions, always to be used based on close prices only.
The MoM indicator comes next. It is now printed in green when the MoM is going up, and in red when MoM is going down.
Then we have two new columns. The first one shows us how many weeks have passed since the given market started its current trend, with the last column showing the percentage change since the beginning of that trend. For example, we can see the Nasdaq has now been in bullish(green) status for 41 weeks, and has gone up 26.71%. Bonds have been bearish for 22 weeks and are down 8.11% over that period.

You can see that all markets here have been moving in the expected direction, as the %Ch is displayed in light green. Whenever a market has gone against the expected trend, the %Ch is displayed in pink.
More on that later.

Important developments in the weekly key reversal levels:

* All covered stock indexes remain in weekly up trends and now have upward weekly MoM again. As we pointed out last week, MoM turning back up soon was an important condition for the bull market to continue, and that’s what happened.

* Bonds (TLT) have been bearish for 22 weeks, but MoM is to the upside and TLT is once again closing in on its weekly key reversal level. A weekly close above 109.20 would be a long term bullish sign.

* Gold remains bearish with downward MoM on the weekly level.

* The EURUSD is quietly grinding upwards. Has appreciated only 3% in 12 weeks, but sometimes these stealth bull markets have long ways to go. Time will tell.

* Oil is still bullish, but weekly MoM is to the downside and oil is getting very close to falling below its key reversal level. A weekly close below $99.74 would be a long term bearish sign.

Here are the daily key reversal levels for next Monday:

Daily Current BB Key (D) MoM (D) Days % Ch
Nasdaq 3,914.28 3,752.96 5.15 5 3.90
S&P 500 1,744.50 1,685.81 5.56 6 3.16
Nikkei 14,561.54 14,223.92 2.75 5 1.09
FTSE 100 6,622.60 6,473.73 3.60 3 1.12
DAX 8,865.09 8,606.24 6.88 6 1.84
Bonds (TLT) 107.04 105.30 0.35 1 -0.07
Gold (spot) 1,315.88 1,328.31 -2.20 26 -0.39
$EURUSD 1.3682 1.3481 2.14 27 2.79
Oil (CL) 101.11 103.92 -2.65 23 -3.49

(Legend: BB : green = bullish, red = bearish | Key: key reversal level | MoM: MoM indicator | Days: days since start of current rally or decline | % Ch: percent change since start of current move)
(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/ )

Note: here we see an example of %Ch displayed in pink. Bonds are in rally mode (green) since 1 day, but the price has gone the other way so far.

Important developments in the daily key reversal levels:

* All covered stock markets are in fresh rallies with upward MoM.

* Bonds (TLT) are in rally mode again.

* Gold is closing in on its daily key reversal level, and MoM has turned up again. That’s the first good news in quite a while for gold. Now we have to see whether it can close above that daily key reversal level at $1328.30

* $EURUSD is quietly ticking upwards.

* Oil (CL) is quietly sinking downwards.

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

Key Targets Top Top2 Bottom Bottom2
Nasdaq 3930 3530 3210
S&P 500 1799 1820 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.

* The Nasdaq has broken through the 3830 target, and is already testing the 3930 level, which is the next hurdle.

* The S&P has also broken above the 1730 target. Here we set sights on 1799 and 1820 next.

* $EURUSD is still testing the 1.36 top target. If it goes a little bit higher then 1.3950 will be the next top target.

Good luck,

Danny

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