LunaticTrader

Investing with the Moon

Key reversal levels for week of March 3, 2014

Posted by Danny on March 2, 2014

Comments for this week (the tables are posted below) :

* Most stock markets are back to strong bullish status on the weekly level, but remain in weak bullish mode on the daily level. This means that the recent rally may have peaked or is close to a peak. So, keep a stop loss close the market. The S&P 500 came within 2 points of its long standing Top1 target at 1870, with several other markets also hitting their Top1 targets last week. That too suggests that a short term top could be in for stocks.

* The current events in Ukraine may trigger some selling next Monday, but if problems escalate further then it is also possible that money will flee Europe and flow into the USA. That could actually push up bond and stock prices over there. My point is: we never know. With a key reversal system we just follow what happens rather than try to predict what will happen. There is enough money to be made by just following trends. I know, trend following is really boring, and trying to forecast the next turn in the market is so much more exciting and ego gratifying. But who cares if trend following makes $ ? If you really crave for the casino excitement of picking tops or bottoms and the joys of catching falling knives, then the best solution is to use 10% of your capital for it, while devoting the rest to a good trend following approach.

* Gold , Euro and oil also remain bullish, but with MoM going down on the daily level they are likely to pull back towards their daily key reversal levels. Best strategy is keeping a rather tight stop in all these markets, and get out if they close below their key reversal levels. If MoM turns back upwards we can become more confident that the rallies continue.

* We have new or refined Top2 targets for a number of markets. For the Nasdaq we have 4566 as a new target. For the S&P 500 the refined Top2 target is now at 1934. These targets will come into play if these indexes manage to break above their Top1 targets.

***

Key reversal levels for next week:

Weekly Current Mode Key (W) MoM (W) Weeks % Ch.
Nasdaq 4,308.12 3,919.59 6.55 60 39.46
S&P 500 1,859.45 1,771.12 2.53 65 31.29
Nikkei 14,841.07 15,224.42 -1.96 3 1.32
FTSE 100 6,809.70 6,577.61 0.88 1 -0.42
DAX 9,692.08 9,080.79 3.51 33 17.65
Bonds (TLT) 108.57 104.97 2.84 5 1.26
Gold (spot) 1,326.39 1,267.90 1.58 2 0.62
$EURUSD 1.3798 1.3517 0.94 31 3.88
Oil (CL) 102.59 96.96 1.87 2 2.47

(Legend: Mode: green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )

Latest daily key reversal levels:

2/28/2014 Current W Mode Key (D) MoM (D) Days % Ch. Str. #
Nasdaq 4,308.12 4,197.98 7.59 14 4.44 2
S&P 500 1,859.45 1,815.64 6.19 12 2.16 2
Nikkei 14,841.07 14,740.18 2.59 3 -0.37 9
FTSE 100 6,809.70 6,693.29 6.01 13 2.05 2
DAX 9,692.08 9,487.87 3.62 13 1.97 2
Bonds (TLT) 108.57 106.27 3.69 34 4.63 1
Gold (spot) 1,326.39 1,295.99 5.40 35 6.28 2
$EURUSD 1.3798 1.3665 2.23 15 1.34 2
Oil (CL) 102.59 99.24 5.09 26 6.10 2

(Legend: Mode : green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | W = weekly mode | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )

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

Key Targets Top1 Top2 Bottom1 Bottom2
Nasdaq 4390 4566 * 3797 3530
S&P 500 1870 1934 * 1755 1641
Nikkei 17220 13860 12940
FTSE 100 6800 7250 * 6230 5980
DAX 9800 10240 * 8715 8510
Bonds (TLT) 111.80 114.20 102 96.25
Gold (spot) 1424 1153 1075
$EURUSD 1.3950 1.42 1.3435 1.2870
Crude Oil(CL) 104 113 89.50 86.00

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

PS: if you are looking for key reversal levels for other world markets or individual stocks, then follow me on Twitter. We also try to tweet the daily key reversal levels every day.

Good luck, Danny

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