LunaticTrader

Investing with the Moon

Key reversal levels for week of December 2, 2013

Posted by Danny on December 1, 2013

Here is our key reversal levels table for next week:

Weekly Current Mode Key (W) MoM (W) Weeks % Ch.
Nasdaq 4,059.88 3,714.71 8.31 47 31.42
S&P 500 1,805.81 1,702.00 8.29 52 27.50
Nikkei 15,661.87 13,828.43 3.94 53 65.45
FTSE 100 6,650.60 6,504.67 3.46 20 1.62
DAX 9,405.29 8,714.19 8.32 20 14.17
Bonds (TLT) 104.45 107.92 -1.04 28 -9.85
Gold (spot) 1,252.50 1,373.97 -2.83 49 -24.40
$EURUSD 1.3591 1.3320 2.18 18 2.33
Oil (CL) 92.72 101.70 -5.20 5 -5.27

(Legend: Mode: green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed  | Key: key reversal level | MoM indicator: green = rising, red = falling | Weeks: weeks since start of current bullish or bearish mode | % Ch: percent change since start of current mode | yellow box: changed direction)
(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/ )

From now onwards I am using 4 different colors to display the market mode. Green and red still show bullish or bearish, but now there is also pale green (which is used when MoM has turned down), indicating that the bull move is either pausing or has peaked out. And pink (used for bearish with MoM going to the upside), showing a pause in an ongoing decline or a market that has bottomed out.

Important developments in the weekly key reversal levels:

* Stock indexes remain very strong, with the exception of the FTSE 100, which has been the weakest market for a while.

* Continuing weakness in bonds (TLT) , gold and oil, with momentum (MoM) remaining to the downside. No changes from last week.

* $EURUSD is in a weak bull market.

And here are the daily key reversal levels for next Monday:

Daily Current Mode Key (D) MoM (D) Days % Ch.
Nasdaq 4,059.88 3,933.55 6.28 34 7.76
S&P 500 1,805.81 1,768.42 6.73 35 6.78
Nikkei 15,661.87 14,994.19 8.94 13 7.80
FTSE 100 6,650.60 6,690.07 -1.66 3 0.22
DAX 9,405.29 9,058.40 8.61 36 8.04
Bonds (TLT) 104.45 105.00 -1.50 17 -0.47
Gold (spot) 1,252.50 1,284.01 -5.03 18 -4.51
$EURUSD 1.3591 1.3487 2.41 5 0.32
Oil (CL) 92.72 96.28 -2.27 52 -11.50

(Legend: Mode : green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | MoM indicator: green = rising, red = falling | Days: days since start of current bullish or bearish mode | % Ch: percent change since start of current mode | yellow box: changed direction)
(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 daily key reversal levels:

* We see some weakening in the daily picture for several stock indexes. The Nasdaq and DAX continue to go strong, but the S&P 500 and Nikkei have seen daily MoM turn down, which puts them in the weak bullish – may have peaked category.

* The FTSE 100 has fallen below its daily key level last Tuesday and is in declining mode now. Notice how daily MoM indicator for FTSE100 has been warning for weeks already. This is how it is supposed to work.

* Bonds (TLT) remain in the “may have bottomed” (pink) category and are coming close to their daily key reversal level. A close above 105 is what it would take to turn TLT to green again.

* Gold came within 1% of our bottom target at $1215 and bounced back upwards. Daily MoM has turned up from a very low level, so gold may have seen at least a medium term bottom here. Can do some speculative buying of beaten down gold miner stocks at this point.

* The $EURUSD is continuing its fresh rally, and for oil we wait for signs of a bottom.

Our current key target zones (we use a +/-1% zone around these targets):

Key Targets Top Top2 Bottom Bottom2
Nasdaq 4200 3530 3210
S&P 500 1820 1870 * 1576 1522
Nikkei 15850 16580 12710 10450
FTSE 100 6800 7150 6205 6110
DAX 9310 9480 7870 7210
Bonds (TLT) 111.80 128.50 102 96.25
Gold (spot) 1448 1540 1215 1153 *
EURUSD 1.3950 1.42 1.2870 1.2350
Crude Oil(CL) 109.40 121 89.50 86.00 *

(* = new target )
(for more details about these key targets, see: https://lunatictrader.wordpress.com/2013/08/20/key-target-levels/ )

Important developments last week:

* For S&P 500 we have a new top target at 1870. For gold we have a new bottom target at 1153. For oil there is a new bottom target at 86.

* The Nasdaq has finally pushed above its top target and we can now set sights on 4200.

* The Nikkei has come within 1% of its top target at 15850, and appears to be stalling there.

* The DAX is probably going towards its Top2 target at 9480

* Bonds (TLT) survived another test of their long standing bottom target at 102

* Oil has broken below its bottom target at 94.30, so 89.50 is now the next level to watch.

PS: if you are looking for key reversal levels for other world markets or individual stocks, then check out my Twitter account.

Good luck,

Danny

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