LunaticTrader

Investing with the Moon

Key reversal levels for week of June 2, 2014

Posted by Danny on June 1, 2014

Comments for this week :

* After a strong week in the stock markets we remain with a fully bullish picture and upward weekly MoM for most major indexes. A pullback will start eventually, and stagnating MoM in the daily keys will normally offer us the first clues when the current rally is nearing an end. Right now it says: all clear.

* Just repeating what I said last week: it is always hard to tell how far a move will carry… best is to go with the flow and respond when the situation changes again. Today’s daily key reversal table shows what happens when we go with the flow: all signals profitable (blue), 1-4% profits within days or weeks. There is no need to predict the top, the system will automatically tell us that some kind of top is in when a given market closes below its key reversal level. Why is following trends so hard to do when it appears so simple? A: Our ego wants to forecast, not follow. Ego wants to buck the trend.

* In other world markets there are no major changes this week. I notice that MoM is turning up for the Russell 2000 index. That doesn’t mean the pain is over for the small caps, but it increases the odds that we will get a rebound rally or a sideways period. A weekly close above 1147.64 would put Russell 2000 in the bullish camp again..

* Bonds (TLT) continue to hesitate near their Top1 target at 114.60.

* Gold tried hard, but has finally succumbed and closed below its weekly key level after 14 weeks of trying the upside. We have been telling for months that gold would go the way of the Euro. Both are in weekly bearish mode now. Will it be a short venture, or the start of a lengthy bear move? I don’t know.

* The Euro appears to be fighting back at the 1.36 level and has its daily MoM turn up from rather low -5 level. That offers some short term hope for both the Euro and for gold. But we have to see if they can claw their ways back above their respective daily key levels.

* Oil price is sputtering as well. It was once again rejected at its long standing Top1 target at 104.

* Our weekly key reversal levels for the 30 Dow stocks are available here. 26 stocks are bullish this week, up from 25 last week. Above 20 is healthy, see : Keeping an eye on the Dow stocks. Note: this most simple indicator has been saying “healthy bull market” since the middle of April, when the number of bullish stocks climbed above 20 again. Goes to show that investing doesn’t have to complicated.

***

Here are the tables.

Key reversal levels for next week:

Weekly Current Mode Key (W) MoM (W) Weeks % Ch.
Nasdaq 4,242.62 4,000.92 -0.33 73 37.34
S&P 500 1,923.57 1,813.69 3.84 78 35.81
Nikkei 14,632.38 14,841.67 -1.72 11 2.65
FTSE 100 6,844.50 6,677.06 2.58 4 0.32
DAX 9,943.27 9,237.00 2.67 9 3.34
Bonds (TLT) 114.10 108.30 5.42 18 6.95
Gold (spot) 1,249.42 1,319.66 -1.09 0 0.00
$EURUSD 1.3630 1.3807 -0.43 2 -0.43
Oil (CL) 102.71 99.21 1.15 15 2.59

(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:

5/30/2014 Current W Mode Key (D) MoM (D) Days % Ch. Str. #
Nasdaq 4,242.62 4,138.35 5.31 6 2.58 1
S&P 500 1,923.57 1,886.58 4.66 6 1.87 1
Nikkei 14,632.38 14,342.57 5.37 6 1.54 13
FTSE 100 6,844.50 6,781.74 1.42 26 2.43 1
DAX 9,943.27 9,705.24 6.17 27 3.55 1
Bonds (TLT) 114.10 112.11 4.37 37 4.90 1
Gold (spot) 1,249.42 1,289.47 -3.93 3 -1.20 11
$EURUSD 1.3630 1.3717 -5.25 15 -0.85 28
Oil (CL) 102.71 101.63 4.23 12 0.79 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 4531 3975 3742
S&P 500 1950 1755 1641
Nikkei 15650 17220 13860 12940
FTSE 100 6800 7110 6230 5980
DAX 10240 8715 8510
Bonds (TLT) 114.60 115.70 102 96.25
Gold (spot) 1424 1541 1185 1075
$EURUSD 1.3950 1.42 1.3366 * 1.2870
Crude Oil(CL) 104 109.24 * 94.60 91.85

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

Good luck, Danny

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