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Key reversal levels for week of June 30, 2014

Posted by Danny on June 29, 2014

Comments for this week :

* We have updated our page explaining the key reversal levels with a lot of new info and details for the different strategy numbers as found in the last column of the daily key tables. This should make it easier to understand and follow this approach. I hope to add more detail in the future, the page remains a work in progress.

* For those who wonder what’s the point of these tables. Well, among other things it offers an objective take on the market. And that can be very useful, for example when market sentiment differs noticeably from what the key reversal levels tell us. For example, in an early February blog post I observed how the media had become very negative about emerging markets, yet my weekly key reversal levels were starting to give buy signals for countries like Indonesia. A few weeks later there was a buy signal for India. If you bought on the next Monday you now sit on profits of 8 and 19% respectively. The system doesn’t always win, but the losses are usually small versus the profits. That’s always the main feature of a good trend following system. The small losses you take are the entrance fee you pay to get in on the big trending moves.

* Back to the key tables for this week. Weekly MoM is turning down for the DAX, so we have more markets that go into hesitating mode. Daily MoM has turned down for most stock indexes, but it is now turning back up for the Nasdaq. On outlier? Or will the other indexes follow the Nasdaq to the upside? We will find out soon.

* In other world markets weekly MoM is turning down for Brazil, France, India and Italy. That’s a warning sign, especially for India where MoM has reached a very high +9 reading.

* Bonds (TLT) are still looking for direction.

* Gold is taking a pause after its recent jump. It is holding up well so far, but will need another push higher to confirm that a new up trend is in place. Daily MoM has turned down for gold, so it could see a retest of the $1290 breakout level before possibly heading higher.

* The Euro is going into daily bullish mode. I have been warning that Euro could surprise to the upside. If it gets back above 1.38 then a short covering rally could quickly take it higher and turn the Euro fully bullish. It is that scenario that is probably pressuring European stocks for the moment.

* Oil is also pausing, but still bullish according to the key levels.

* Our weekly key reversal levels for the 30 Dow stocks are available here. 25 stocks are bullish this week, down from 26 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 4,397.93 4,065.66 4.83 77 42.37
S&P 500 1,960.96 1,843.56 6.79 82 38.45
Nikkei 15,095.00 14,494.82 1.94 3 -0.72
FTSE 100 6,757.80 6,707.99 2.16 8 -0.95
DAX 9,815.17 9,366.08 4.81 13 2.01
Bonds (TLT) 113.24 109.05 3.41 22 6.14
Gold (spot) 1,316.02 1,273.23 -1.08 1 0.08
$EURUSD 1.3647 1.3743 -2.27 6 -0.31
Oil (CL) 105.74 100.76 2.91 19 5.61

(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:

6/27/2014 Current W Mode Key (D) MoM (D) Days % Ch. Str. #
Nasdaq 4,397.93 4,282.82 4.81 26 6.33 17
S&P 500 1,960.96 1,933.31 4.18 26 3.85 2
Nikkei 15,095.00 14,959.50 5.06 26 4.75 2
FTSE 100 6,757.80 6,813.64 -2.98 10 -0.30 7
DAX 9,815.17 9,943.03 -1.75 2 -0.80 7
Bonds (TLT) 113.24 111.89 2.23 3 0.12 5
Gold (spot) 1,316.02 1,279.74 7.44 11 3.39 2
$EURUSD 1.3647 1.3586 1.13 0 0.00 37
Oil (CL) 105.74 104.31 2.72 32 3.76 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 2001 * 1755 1641
Nikkei 15976 * 17220 13860 12940
FTSE 100 6800 7110 6677 6230
DAX 10240 10450 8715 8510
Bonds (TLT) 114.60 115.70 108.25 102
Gold (spot) 1424 1541 1160 1075
$EURUSD 1.3950 1.42 1.3403 1.2870
Crude Oil(CL) 109.24 112.47 * 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/ )

Stay tuned, Danny

 

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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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Markets around the world

Posted by Danny on October 20, 2013

Some readers have been asking for my key reversal levels for other markets and indexes.
Here they are for a selection of countries.
Read my earlier posts to understand how to use these tables, see here.

Here are the weekly keys:

Weekly Current BB Key (W) MoM (W) Weeks % Ch
Australia (AORD) 5,321.01 5,047.11 5.78 14 7.33
Brazil (BOVESPA) 55,378.46 51,216.26 3.78 6 3.03
Canada (TSX) 13,136.09 12,596.37 3.68 13 3.56
China (SSEC) 2,193.78 2,117.32 3.37 5 -2.26
Dow Jones Industrials 15,399.65 14,793.38 0.67 41 14.61
France (CAC40) 4,286.03 3,963.17 5.94 14 10.89
Gold stocks (XAU) 92.17 109.64 -2.99 48 -44.80
Hong Kong (HANG SENG) 23,340.10 22,286.57 5.31 11 4.79
India (SENSEX) 20,882.89 19,230.85 2.81 5 4.53
Indonesia (JCI) 4,546.57 4,666.06 -2.01 17 0.49
Italy (MIB) 19,271.02 17,145.81 6.70 11 14.80
Malaysia (KLCI) 1,799.59 1,746.11 1.07 5 1.76
Mexico (IPC) 40,412.69 41,805.91 -0.40 7 0.70
Russell 2000 1,114.77 993.81 6.35 43 31.72
Singapore (STI) 3,192.90 3,223.63 -0.85 2 1.49
South Korea (KOSPI) 2,052.40 1,943.21 6.16 6 4.50
Spain (IBEX35) 10,001.80 8,753.06 8.08 12 19.43
Switzerland (SMI) 8,084.65 7,663.05 1.93 67 30.72

(Legend: BB: green = bullish, red = bearish | Key: key reversal level | MoM: MoM indicator | Weeks: weeks since start of current bullish or bearish trend | % Ch: percent change since start of current trend)
(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/ )

 

And this is the daily table for next Monday:

Daily Current BB Key (D) MoM (D) Days % Ch
Australia (AORD) 5,321.01 5,191.99 3.25 5 1.76
Brazil (BOVESPA) 55,378.46 53,267.09 5.54 4 2.22
Canada (TSX) 13,136.09 12,822.71 4.60 5 1.87
China (SSEC) 2,193.78 2,177.65 1.41 8 0.11
Dow Jones Industrials 15,399.65 15,110.26 3.02 5 1.11
France (CAC40) 4,286.03 4,146.86 5.64 30 5.96
Gold stocks (XAU) 92.17 93.97 -2.72 20 -3.80
Hong Kong (HANG SENG) 23,340.10 22,962.40 1.83 30 5.27
India (SENSEX) 20,882.89 19,816.47 6.35 27 7.38
Indonesia (JCI) 4,546.57 4,399.94 3.51 9 3.13
Italy (MIB) 19,271.02 18,172.99 8.98 30 13.04
Malaysia (KLCI) 1,799.59 1,772.42 4.70 28 2.65
Mexico (IPC) 40,412.69 40,957.48 -1.73 9 -0.11
Russell 2000 1,114.77 1,064.06 3.43 4 4.57
Singapore (STI) 3,192.90 3,155.55 0.73 3 0.38
South Korea (KOSPI) 2,052.40 1,995.03 6.54 29 6.96
Spain (IBEX35) 10,001.80 9,252.88 9.83 30 15.91
Switzerland (SMI) 8,084.65 7,927.07 1.22 3 1.74

(Legend: BB : green = bullish, red = bearish | Key: key reversal level | MoM: MoM indicator | Days: days since start of current rally or decline | % Ch: percent change since start of current move)
(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/ )

 

Good luck,
Danny

 

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Emerging markets on sale

Posted by Danny on June 25, 2013

There is a saying that one should buy “blood in the streets”. But that doesn’t mean one cannot buy too early.
We are seeing popular protests in places like Turkey and Brazil, and that has driven down the stocks in most emerging markets. Time to buy?
Here is a chart of the EEM emerging markets etf (click for larger image):

EEM

While the Dow Jones Industrials is down about 5% from its recent peak, the emerging markets have lost over 20% since their peak in early January. Notice how EEM has dropped below several trend lines and is now trying to hold on to support around $36. The Earl2 is getting quite low, but not showing any signs of turning up yet. This means the eventual bottom could still be a few months away. If the $36 level doesn’t hold, then look for a revisit of the October 2011 lows at ~$34. So, I would be patient if you plan to buy EEM.

A quick look at some markets that are currently in the news.
This is TUR, the Turkey etf (click for larger image):

TUR

This market is correcting from the huge bull market it had last year. Here the Earl2 (orange line) is showing first signs of stabilizing, which means that the worst could be over for Turkey. There is a major support level at ~$55, so one could start some careful buying with a stop-loss just under $53. If this support gets broken, then look for $45 and next $40.

And here is BRF, a Brazilian small cap etf (click for larger image):

BRF

Has been weak for several years already, and may now be in the final selling climax before printing a major bottom.
Here the Earl2 is also falling into the region that typically marks important lows, but we see no signs of stabilization yet, so also for Brazil I would wait.

Investing is a game of patience, and there is no need to try to catch falling knives. In the charts I have marked the recent buying opportunities with green arrows, and as you can see, when the Earl2 turns upwards from a bottom there is usually still enough time to get on board at low prices. Most of these charts are likely to show more attractive setups one or two months from now.

Stay tuned.
Danny

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