LunaticTrader

Investing with the Moon

Key reversal levels for week of April 14, 2014

Posted by Danny on April 12, 2014

Comments on the key levels for this week :

* Nice drops in the Nasdaq and S&P 500 this week. This is the correction we have been warning for since the middle of March. US markets are now testing their weekly key reversal levels. Next week we will probably know if the Nasdaq and S&P manage to stay bullish or join the Nikkei and the FTSE100 by going bearish on the weekly level.

* The five major indexes have downside weekly MoM again, so the risk that more markets will turn bearish is considerable right now. On the daily level these markets are in declining mode with downward momentum (MoM). We can expect tradeable bottoms as soon as MoM turns back up for them, especially for the markets that have not fallen below their weekly key reversal levels ( Nasdaq, S&P 500, DAX). Check out my daily key reversal tweets to see when MoM goes back up.

* That being said, I would like to keep things in perspective by pointing to our weekly key reversal levels for other world markets, posted on twitter every weekend. Notice how most world markets remain dark green (strong bullish), with China and Hong Kong also turning green this week. So, this does not look like the start of a global bear market. What seems to be going on is a global portfolio rebalancing. Money that has flown into the US since the start of the year, for various reasons, is now flowing back into international markets. I already mentioned a few months ago that emerging markets looked good in my screens. Meanwhile, since turning bullish in our weekly key levels, markets like India and Indonesia are up 7% in 6 and 9 weeks respectively. Singapore is up 2% in 5 weeks. Even Brazil, Turkey, and South Korea, which turned bullish just last week, have been going up in the face of a sharply declining US market. And Euro-tortured Italy is up nearly 12% since turning bullish 15 weeks ago.

* Bonds and Oil are the strongest markets right now, with gold and $EURUSD continuing to hang in the balance. I continue to watch the Euro carefully, as it is set to chose a direction sooner or later. A weekly close above 1.40 or below 1.3630 is likely to become a game changer for many connected markets.

* Several markets are hitting our Top or Bottom targets, so watch these levels for possible trend reversals. Namely: 3975 for the Nasdaq, 13860 for the Nikkei, 111.80 for bonds (TLT), 104 for crude oil (CL).

* The weekly key reversal levels for the 30 Dow stocks are available here. 20 stocks are bullish this week, down from 23 last week. Above 20 is healthy, see : Keeping an eye on the Dow stocks.

***

Here are the tables.

Key reversal levels for next week:

Weekly Current Mode Key (W) MoM (W) Weeks % Ch.
Nasdaq 3,999.73 3,977.21 2.37 66 29.48
S&P 500 1,815.69 1,789.90 3.33 71 28.20
Nikkei 13,960.05 15,135.11 -2.39 4 -2.06
FTSE 100 6,561.70 6,714.97 -0.70 4 0.52
DAX 9,315.29 9,119.64 0.80 2 -3.19
Bonds (TLT) 110.73 105.68 3.83 11 3.79
Gold (spot) 1,318.00 1,282.84 2.37 8 -0.01
$EURUSD 1.3884 1.3630 1.96 37 4.53
Oil (CL) 103.74 97.69 2.11 8 3.62

(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:

11/04/2014 Current W Mode Key (D) MoM (D) Days % Ch. Str. #
Nasdaq 3,999.73 4,236.12 -5.78 14 -5.95 7
S&P 500 1,815.69 1,867.37 -2.10 1 -0.82 7
Nikkei 13,960.05 14,774.65 -2.30 3 -3.30 11
FTSE 100 6,561.70 6,671.06 0.34 3 -0.44 11
DAX 9,315.29 9,533.85 0.99 0 0.00 35
Bonds (TLT) 110.73 108.28 2.79 4 1.56 1
Gold (spot) 1,318.00 1,320.44 -0.10 14 0.73 8
$EURUSD 1.3884 1.3762 1.16 2 0.22 5
Oil (CL) 103.74 100.31 4.24 11 2.37 1

(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 4531 3975 3797
S&P 500 1870 1950 1755 1641
Nikkei 15650 *  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 1541 1185 * 1075
$EURUSD 1.3950 1.42 1.3390 1.2870
Crude Oil(CL) 104 113 91.85 86.00

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

Stay tuned, Danny

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