Indices/Commodities Outlook by Jim Langlands

 

INDICES/COMMODITIES
S&P Futures 1998 The S+P, already under pressure on Friday, suffered a late day collapse and finished back below 2000 weighed down by the oil price and as I said last week, I think we are on our way to 1985 (100 DMA) and then to 1977 (38.2% of 1813/2078. Below there would see a bigger fall, possibly taking us back to the 200 DMA at 1940, although that is for another day. Closer to home, the topside now looks limited to 2010/15, although if we were to head higher we could see 2030 again, where I would be a seller, with a SL placed above 2050.
DJI 17265 The DJI collapsed on Friday, from a high of 17571, to meet our target at the 19 Sept high at 17286 and actually headed on to a low of 17250. The hourlies are now very oversold and so a bounce towards 17350/400 is very possible although I think this would present a good sell opportunity for another run to the downside to retest Friday’s low, and below, towards 17130 and possibly even the 100 DMA currently at 17060. With the weeklies now turning negative as well, a run towards the 200 DMA at 16820 would not really surprise although it could take some time
ASX SPI 5152 The SPI had another tough session on Friday, falling to new lows late in the day in conjunction with the selloff in the US markets. Further losses look likely, with the next realistic support to be seen at 5110( 50% pivot of 4563/5669) and then the 10 Oct low at 5092. That may be a stretch too far today but it appears to be the overall direction, and should we break under 5090, look for a deeper run towards the February low of 4994 (4983: 61.8%  of 4563/5669).The topside seems limited to 5200 for now, above which the 200 Week MA at 5240 will be pretty formidable. I doubt that we see it but if wrong, it would present a decent medium term sell opportunity, with a SL placed above 5300
GOLD 1222 Once again there is nothing to add to Gold as it sits pretty much unchanged at the end of the week, currently capped by the 100 DMA, now at 1235. The dailies still look positive though and if equities continue to tank, some safe haven buying of Gold could see the 1235 level taken out, potentially  propelling it towards 1263 (61.8% of 1345/1131). The downside currently remains supported at 1215, and it seems unlikely to head back below 1200 in the next day or so while the dailies continue to look supportive. Buying dips seems favoured for now.
SILVER 17.02 As with Gold, Silver had another day of consolidation (16.98/17.20) on Friday. The dailies still appear to be picking up some momentum for further gains, which if seen would take us back to 17.30 and possibly on towards the 100 DMA at 17.80, but further progress would seem to be related to a continuing safe haven demand. If that need dissipates, then so will this current rally in the metals. Below 16.90, the next support is at 16.60 and then again at 16.40 and 16.20 although I don’t see them being bothered for a while.
OIL(WTI) 57.43 Not sure where to begin with Oil. WTI is in serious trouble and it looks as though there could be plenty more to come, now that it is trading well below the 200 month MA at 60.29. I cannot see too much support ahead of the 56.00/50 area, below which would potentially see a dive towards the Jan 2007 low at 49.90. Under there, prepare for another dive towards the rising trend support at 46.40 and possibly to  42.27 (76.4% of 147.15/9.87), which is a long way off but certainly appears to be the direction of it.The topside currently looks restricted to 60.00 and I am not at this point sure what would encourage it to head back up there unless OPEC had a change of heart and introduced production cuts, which the Saudi’s appear to be avoiding at all costs. Sell rallies still seems to be the way of it, even down at these levels.

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