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Posts Tagged ‘Oil Prices’

Key reversal levels for week of September 16, 2013

Posted by Danny on September 15, 2013

Our key reversal levels going into next week:

Current Status Key (W) MoM (W) Mode Key (D) MoM (D)
Nasdaq 3722 BULL S: 3449 5.94 (6.07) RALLY S: 3643 6.48 (5.93)
S&P 500 1688 BULL S: 1603.40 2.31 (2.78) RALLY * S: 1657.60 5.27 (4.25)
Nikkei 14405 BULL S: 12814 1.08 (0.9) RALLY S: 13890 5.99 (5.72)
FTSE 100 6584 BULL S: 6337 1.43 (1.39) RALLY * S: 6491 3.36 (3.02)
DAX 8509 BULL S: 8035 2.04 (2.06) RALLY * S: 8278 4.21 (2.88)
Bonds (TLT) 103.55 BEAR R: 111.17 -6.28 (-6.46) DECLINE R: 104.49 -2.99 (-3.29)
Gold (spot) 1325.8 BEAR R: 1429.20 0.57 (0.20) DECLINE * R: 1381.20 -3.0 (-1.76)
Euro/US$ 1.3298 BULL S: 1.3075 2.01 (2.36) RALLY * S: 1.3213 -0.15 (-1.11)
Oil (CL) 108.21 BULL S: 98.85 4.94 (5.09) RALLY S: 106.50 0.98 (1.29)

(Legend: W = weekly, D = daily, R = resistance, S = support, MoM = MoM indicator, * = changed from last week)
(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/ )

Important developments in the key reversal levels last week:

* All covered stock markets are back in rally mode with daily momentum (MoM) going up nicely. Weekly momentum for most markets is now starting to turn back up as well, which means stocks will probably be showing a fully bullish picture again by next week… unless we get a sudden downturn.

* All stock markets remain in bull status, and well above their weekly key reversal levels.

* Bonds (TLT) are still in bear status and decline mode. But both the daily and weekly MoM are going up. Bonds are coming off a very pessimistic MoM-7.7 bottom on the weekly chart, which indicates a nice rally is in the cards once it can close above its daily key reversal level at $104.49. This could happen as soon as the Fed announces tapering of its QE program in a classic “sell the rumor and buy the news” reflex.

* Gold has gone into decline mode, and is now seeing quickly falling daily MoM. I wouldn’t consider to buy gold until we see MoM stabilize and turn up again.

* The Euro/US$ is back into rally mode, but not very convincingly. This remains a very choppy market, with little or no momentum either way. It will go into a good trending move eventually, but we have to be patient. I think the better odds are for a move to the downside, so on a close below the daily key level at 1.3213 I would consider taking short positions.

* Oil remains in rally mode, but both the daily and weekly MoM are going down. The repeated failure to climb above $110 and the weakening momentum suggest that the path of least resistance is down for oil. Time will tell.

 

And here are our key target zones (we recommend using a +/-1% zone around these targets):

 Key Targets Top Top2 Bottom Bottom2
Nasdaq 3730 3830 3530  3210
S&P 500 1738 1799 1576 1522
Nikkei 16580 17980 12710  10450
FTSE 100 6750 7100 6205 6110
DAX 8550 8920 7870 7210
Bonds (TLT) 128.50 134 102 96.25
Gold (spot) 1448 1540 1078 1001
Euro/US$ 1.36 1.3950 1.2870 * 1.2350
Crude Oil(CL) 109.40 121 89.50 77

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

Important developments last week:

* We have one new bottom target for the Euro/US$ at 1.2870.

* The Nasdaq reached its top target at 3730 last Tuesday and has remained stuck at that level for the rest of the week.

* The DAX is also close to its top target at 8550.

* Bonds (TLT) are testing their bottom target at 102 again.

* Oil seems to have failed on its second attempt to get above its $109.40 top target.

Good luck,

Danny

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Key reversal levels for week of September 2, 2013

Posted by Danny on September 1, 2013

Our key reversal levels going into next week:

Current Status Key (W) MoM (W) Mode Key (D) MoM (D)
Nasdaq 3590 BULL S: 3410 6.69 (7.47) DECLINE * R: 3635 -1.62 (-1.39)
S&P 500 1633 BULL S: 1595 3.79 (4.96) DECLINE R: 1667.20 -5.82 (-5.72)
Nikkei 13389 BULL S: 12634 1.33 (2.12) DECLINE R: 13844 -2.85 (-2.98)
FTSE 100 6413 BULL S: 6313 1.79 (2.12) DECLINE R: 6543 -3.17 (-3.61)
DAX 8103 BULL S: 7999 2.42 (2.73) DECLINE * R: 8322 -2.99 (-1.78)
Bonds (TLT) 105.99 BEAR R: 112.48 -6.73 (-7.0) RALLY * S: 104.64 1.26 (-0.19)
Gold (spot) 1394.8 BEAR R: 1431 -0.93 (-2.39) RALLY S: 1350.70 6.32 (6.74)
Euro/US$ 1.322 BULL S: 1.3062 2.66 (2.65) DECLINE * S: 1.3321 0.12 (1.30)
Oil (CL) 107.65 BULL S: 97.82 5.4 (5.76) RALLY S: 105.41 2.66 (2.32)

(Legend: W = weekly, D = daily, R = resistance, S = support, MoM = momentum monitor, * = changed from previous week/day)
(for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )

I have been too busy, so my promised article on the MoM indicator will have to wait a bit.

Important developments in the key reversal levels last week:

* All covered stock indices are back into decline mode, and the overall picture shows momentum (MoM) continuing to go down as well, both on the weekly and daily basis. This means it is too early to declare this correction over. All covered markets remain in bull status, but some are coming close to testing their weekly key reversal levels.

* Bonds (TLT) have switched into rally mode by climbing above their daily key reversal level last week. Momentum is going up nicely. So, the next hurdle is now the weekly key reversal level, which is currently at 112.48.

* Gold reached its weekly key level, but failed to hold above it and was turned back down. So it remains in bear status. The daily momentum has now turned down for gold, which suggests that the recent rally is probably over for a while.

* The Euro/US$ has fallen into decline mode, as was already indicated by its stalling momentum last week. Stalling daily momentum has become downward momentum and we should now watch the weekly key level at 1.3062 to see if the Euro can hold on to bull status.

* Oil tried to rally but failed at the $110 hurdle again. Weekly MoM remains down. It is still undecided where oil prices are going next: above $110 or below $100. But the repeated failure at the $110 level suggests that a move to the downside is becoming more likely.

And here are our key target levels:

 Key Targets Top Top2 Bottom Bottom2
Nasdaq 3730 3830 3530  3210
S&P 500 1738 1799 1576 1522
Nikkei 16580 17980 12710  10450
FTSE 100 6750 7100 6205 6110
DAX 8550 8920 7210 7030
Bonds (TLT) 128.50 134 102 96.25
Gold (spot) 1448 1540 * 1078 1001
Euro/US$ 1.36 1.3950 1.2350 1.17
Crude Oil(CL) 109.40 121 89.50 77

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

Important developments last week:

* We recorded a new top target level for gold at 1540. Of course, it won’t come into play until gold gets above its 1448 top target. It tried last week and turned back down.

* Oil prices tested their top target at 109.40 again, and was met by selling again. Oil has now failed at this level four times since July.

An important point to remember: these key targets are to be used as target zones rather than a fixed price. I use a +/-1% on them.
So, when gold reached 1433.70 last week it tested its top target at 1448. I consider the target broken only when there is a close more than 1% above the target (or below the target for bottom targets). In this case we would need gold to close above 1462.50 (= 1448 + 14.5) to consider this target broken and start looking at the next one.
It is actually common for two well known candlestick patterns to appear at these target levels. Near top targets we can get shooting star candles and near the bottom targets we tend to get hammer candles.
Watch for them. If a hammer or shooting star candle occurs within a target +/-1%, then it is a good opportunity to initiate some positions to benefit from expected price reversal. For example buy some put options when a shooting star is seen on a top target, or buy some calls when a hammer is formed at a bottom target. A small position to get a foot in the door, and then add to the position if the market does indeed turn and moves past the key reversal levels we list in the table above. You can always sell the options for a small loss if the market does not turn and goes on to break through the top or bottom target. These are trades with 5 to 1 or even 10 to 1 reward-to-risk ratios, so you don’t need a lot of winners to come out ahead with this method.

In a future post I will focus on the various practical trading strategies that can be used with these key reversal and key target levels.

Good luck,
Danny

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Key reversal levels for week of August 26, 2013

Posted by Danny on August 25, 2013

Our key reversal levels going into next week:

Current Status Key (W) Mom (W) Mode Key (D) Mom (D)
Nasdaq 3657.8 BULL S: 3395 7.47 (7.67) RALLY * S: 3609 -1.97 (-2.48)
S&P 500 1663.5 BULL S: 1592.60 4.96 (5.67) DECLINE R: 1676.30 -6.47 (-6.77)
Nikkei 13660 BULL S: 12602 2.12 (2.90) DECLINE R: 13981 -3.54 (-3.84)
FTSE 100 6492 BULL S: 6307 2.12 (2.33) DECLINE R: 6568 -3.72 (-3.85)
DAX 8417 BULL S: 7987 2.73 (2.42) RALLY S: 8274 0.54 (0.44)
Bonds (TLT) 104.29 BEAR R: 113.00 -7.0 (-6.9) DECLINE R: 105.40 -6.7 (-7.54)
Gold (spot) 1397.5 BEAR R: 1430 -2.39 (-3.79) RALLY S: 1321 5.13 (5.01)
Euro/US$ 1.3375 BULL S: 1.3048 2.65 (2.1) RALLY S: 1.3229 2.43 (2.37)
Oil (CL) 106.42 BULL S: 97.22 5.76 (5.98) RALLY * S: 104.29 -0.24 (0.05)

(Legend: W = weekly, D = daily, R = resistance, S = support, Mom = momentum, * = changed from previous week/day)
(for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )

Some change in the table presentation from this week onwards. The weekly and daily momentum is now shown in a numeric format rather than just “up” or “down”. The value can vary between +10 and -10, and between parentheses you can see the previous value, so you can still see whether momentum is going up or down.  I will have more info on this in another article later this week. For now it is sufficient to know that values above +8 or below -8 are extreme and usually followed by a significant reversal in the other direction.

Important developments last week:

* Most stock markets posted declines, nicely in  line with the declining mode and downward momentum we had on for them. But we see first signs of stabilization. The Nasdaq looks stronger than most other indices and has climbed back into rally mode last Friday, if only barely so. The German DAX index has remained in rally mode throughout the recent weakness.

* Weekly momentum keeps going down for the covered stock indices, except DAX. The daily momentum has turned upwards for all stock indices. This means we are in a rebound move from recent losses. Whether it will be strong enough to turn all markets back into rally mode remains to be seen.

* Bonds (TLT) remains in bear status and in declining mode, but the daily momentum has once again turned up, and bonds are now close to switching into rally mode for the first time since early May. With both the weekly and daily mom at very low levels (near -7) there is potential to go up quite a bit, despite the ongoing Fed tapering noise.

* Gold is getting close to its weekly key reversal level, so could go into bull mode soon. But the daily momentum is starting to stall around 5, so I think gold will first take a step back before it can make another step forward.

* The Euro/US$ remains in rally mode, but also here we see daily momentum stall, so could fall into declining mode very quickly.

* Oil has been switching between rally and decline mode several times in recent weeks. But both the weekly and daily momentum are now going down, which puts question marks behind Friday’s rise in oil prices. Oil is going to make up its mind sooner or later: either break above the $110 hurdle, or fall back below $100. In either case, we probably have a significant trending move coming up in oil.

 

And here are our key target levels:

 Key Targets Top Top2 Bottom Bottom2
Nasdaq 3730 3830 3530 *  3210
S&P 500 1738 1799 1576 * 1522
Nikkei 16580 17980 12710 *  10450
FTSE 100 6750 7100 6205 * 6110
DAX 8550 8920 7210 7030
Bonds (TLT) 128.50 134 102 96.25 *
Gold (spot) 1448 1650 1078 1001
Euro/US$ 1.36 1.3950 1.2350 1.17
Crude Oil(CL) 109.40 * 121 89.50 77

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

The key targets from weekly calculations do not change very often, so I have simplified the table by showing the key targets derived from daily calculations and showing them in bold print whenever they match closely with a weekly key target price. When a certain key target price pops up in both calculations then it usually means a hurdle that is more difficult to overcome for the market.

Important developments last week:

* Last week’s decline in stock markets has generated some new bottom targets (always marked with an “*” in the table) for most indices.

* There is also a new bottom target for TLT at 96.25, and a new top target for oil at 109.40.

* The 102 bottom target for TLT was reached last week and produced a nice rebound. That’s what these target top or bottom levels are supposed to do: they tend to reject prices and send the market in the other direction for a while. When these targets get tested for a second or third time, that’s when they typically get broken and then the next target comes into play.

 

If all these numbers look a bit confusing to you, don’t worry. Just keep an eye on a few markets that interest you and watch what happens as the key reversal or key target levels are reached. The pieces of the puzzle will then start falling into place. It just takes a bit time to get used to.

When all the materials are presented and I am satisfied with the format, then I will summarize everything in the fixed article page about these key levels.

So, stay tuned.

Danny

 

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