Here are our monthly key reversal levels going into April 2014. Remember, these monthly key reversal are only for long term market orientation. Try to invest mainly in the stronger markets (dark green) and take (partial) profits in markets that go to light green. Speculative buying can be done in the markets that switch from bearish (red) to mildly bearish (pink). A very patient long term investor can do well based on these monthly keys only, but for more optimal entry and exit points the weekly and daily key reversals can be used.
| Monthly | Current | Mode | Key (M) | MoM (M) | Months | % Ch. |
|---|---|---|---|---|---|---|
| Nasdaq | 4,198.99 | 3,461.22 | 9.21 | 52 | 94.20 | |
| S&P 500 | 1,872.34 | 1,578.04 | 8.27 | 26 | 42.66 | |
| Nikkei | 14,827.83 | 12,822.68 | 7.86 | 15 | 39.83 | |
| FTSE 100 | 6,598.40 | 6,225.36 | 2.89 | 16 | 12.47 | |
| DAX | 9,555.91 | 8,010.82 | 7.79 | 25 | 39.87 | |
| Bonds (TLT) | 109.10 | 111.70 | -2.38 | 9 | 1.61 | |
| Gold (spot) | 1,283.76 | 1,446.26 | -4.12 | 11 | -13.04 | |
| $EURUSD | 1.3768 | 1.3150 | 2.57 | 6 | 1.80 | |
| Oil (CL) | 101.58 | 93.65 | 0.78 | 1 | -1.38 |
(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/
Comments:
* Monthly MoM is now turning down for Nasdaq, S&P 500 and DAX. It was down already for Nikkei and FTSE 100. So all major stock markets have now downward momentum. It can be months if not more than a year until monthly MoM turns back upwards. Until that happens we better be very cautious in the stock markets.
* MoM is turning up for Oil, which is bullish, but this market still needs follow through.
Monthly key reversal levels for other world markets:
| Monthly | Current | Mode | Key (M) | MoM (M) | Months | % Ch |
|---|---|---|---|---|---|---|
| Australia (AORD) | 5,403.00 | 4,860.44 | 4.54 | 17 | 19.13 | |
| Brazil (BOVESPA) | 50,415.00 | 54,320.68 | -2.26 | 22 | -7.48 | |
| Canada (TSX) | 14,335.30 | 12,786.98 | 4.89 | 14 | 12.51 | |
| China (SSEC) | 2,033.31 | 2,255.74 | -1.23 | 46 | -21.12 | |
| Dow Jones Industrials | 16,457.66 | 14,449.99 | 6.35 | 29 | 37.70 | |
| France (CAC40) | 4,391.50 | 3,810.07 | 4.94 | 15 | 18.60 | |
| Gold stocks (XAU) | 91.20 | 134.73 | -4.35 | 27 | -49.61 | |
| Hong Kong (HSI) | 22,151.06 | 21,335.72 | 1.03 | 17 | 2.68 | |
| India (SENSEX) | 22,386.27 | 18,799.74 | 3.91 | 18 | 19.17 | |
| Indonesia (JCI) | 4,768.28 | 4,142.95 | -0.23 | 57 | 135.25 | |
| Italy (MIB) | 21,691.92 | 17,020.56 | 5.13 | 6 | 24.09 | |
| Malaysia (KLCI) | 1,849.21 | 1,670.32 | 5.02 | 56 | 57.39 | |
| Mexico (IPC) | 40,461.60 | 41,844.06 | -0.87 | 1 | 4.34 | |
| Russell 2000 | 1,173.04 | 978.44 | 8.28 | 26 | 47.18 | |
| Russia (RSX) | 23.99 | 28.00 | -0.58 | 2 | -4.27 | |
| Singapore (STI) | 3,188.62 | 3,193.43 | -0.63 | 2 | 5.88 | |
| South Africa (JOHA) | 47,770.92 | 39,126.60 | 8.35 | 53 | 81.22 | |
| South Korea (KOSPI) | 1,985.61 | 1,893.70 | 0.47 | 6 | -0.60 | |
| Spain (IBEX35) | 10,340.50 | 8,576.08 | 5.39 | 6 | 12.67 | |
| Switzerland (SMI) | 8,453.80 | 7,343.32 | 6.10 | 20 | 32.11 | |
| Turkey (TUR) | 48.68 | 57.67 | -3.98 | 7 | -1.85 | |
| Vietnam (VNM) | 21.69 | 18.09 | 2.41 | 2 | 3.88 |
(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/
Comments:
* Russia, Turkey and Vietnam have been added to the list with their main ETF ticker.
* No big changes except for Russell 2000, which is also seeing MoM turn down, indicating that it may have peaked out.
* A quick note for short sellers. Many people try to bet against a rising market only to be forced to cover their shorts on each subsequent rally. By the time the market actually peaks out they have no money left to bet against it. If you can wait until monthly MoM turns down from a very high level (above 8), as we currently see for the Russell 2000, Nasdaq and S&P 500, the odds for a bet on the downside will be much better. When that basic condition is in place, you just look for a favorable entry based on weekly and daily key reversal levels, for example when weekly MoM turns down as well, or when the market falls below a key reversal level. You want to have at least two different time frames agreeing with the direction of your trade.
Good luck,
Danny
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