INDICES/COMMODITIES Outlook by Jim Landlands

 

INDICES/COMMODITIES
S&P Futures 2026 Having made another new all time high at 2032.75 on Friday, the S+P eased back to close at 2026 following the slight miss in the NFP. Nothing really appears to have changed though from a technical point of view and as long as we hold above 2020 (55HMA), the trend appears set to continue to ratchet higher towards 2035 and then to 2050. A break of 2020 could see a run back towards 2000 (200 HMA: 2002), which should again be decent support. Below there though would hint at a return towards 1975, but right now is a long way off
DJI 17508 The Dow also made another all time high at 17544 on Friday, closing above 17500, and as with the S+P, it appears that a continued run higher could be the theme again in the coming week. We are in blue sky territory so technical points are hard to come by but above Friday’s peak, look for a run to 17600 and beyond, towards 17700, where the rising trendline from the May 2011 high and joining successive highs will provide some resistance. On the downside, support is now seen at Fridays 17435 low, beyond which would head to the 100 HMA at 17385. As before, I am wary of buying the equity indices at these levels and prefer to stand aside. The weekly momentum indicators are showing bearish divergence but it has been a pretty painful exercise if running short over the last week, so tread carefully.
ASX SPI 5545 The SPI finished the week on a firm note, and while the short term indicators look to have a bit of bearish divergence, which may temper any further gains early in the week, both the dailies and the weeklies suggest that there may be further progress to the topside in the more medium term. The points to watch, on the topside, are at Friday’s 5565 high, beyond which would head on to 5600, although I am not sure that we head up here, or much beyond Friday’s high, early in the week. On the downside 5530 will provide the first minor support ahead of the 100 HMA at 5510. A break of 5500, which looks unlikely today, would had back to the 200 HMA at 5485 and then to the 100 DMA at 5445. Some choppy 5500/5600 trade for a few days would not surprise.
GOLD 1178 Gold made a key reversal on Friday, in turning up from a new trend low of 1132 to finish the week at 1178 and is looking capable of building on its gains in the coming sessions. The next resistance is at 1180, which should be strong, having previously acted as long term support, and is also right where the 100 Month MA currently sits. A break would trigger stops and potentially see a run back towards 1200 and possibly higher, but any decent rally should be viewed as a sell opportunity for an eventual resumption of the downtrend. 1150/60 should again act as support in the near term and I doubt that we see 1130 again for a while. Eventually though, I think that will be the direction to focus on, looking eventually for a target of 1086 (50% of 253/1992).
SILVER 15.77 Silver has bounced from its recent steep selloff, where it based at 15.06 and in the short term the indicators suggest the potential for a return to 16.00, where the 200 HMA should provide some selling interest. Above here, 16.50 is 61.8% of the move down from 17.40 to 15.06 and should prove strong resistance, if seen, and would provide a decent sell opportunity, I suspect. The downside looks to have some support at 15.50/60 ahead of last week’s low, but a break of 15.00 would then open up the prospect of reaching our long term target of the last 6 months, at the Jan 2010 low at 14.62. Below there would get ugly, with the chance of heading eventually towards the July 2009 low at 11.78. I think it is coming, but is some way off yet and would need a continuation of the longer dollar uptrend in order to do so. It may be a move for 2015.
OIL(WTI) 78.50 Having collapsed to a low of 75.82 last week, WTI is attempting to stage a recovery, and with the 4 hour indicators pointing higher, we could be in for a run towards the 200 HMA at 79.50, above which, 80.00 will provide stern resistance. It is too early to call a bottom in this trend, although the dailies look to be attempting to head higher from an oversold condition and we could see a stronger test of the topside in the days to come, possibly to the first Fibo resistance at 83.10 (23.6% of 107.65/75.82). This may be a stretch too far and if  WTI fails ahead of 80.00, which could well be the case, then the downside will find minor buyers at the 100 HMA at 77.90, below which the previous minor lows at 77.05 and 76.40 should find some support ahead of a revisit of 75.80. The weeklies and monthlies still point lower, so if 75.80 gives way, look for a decline towards the Oct 2011 low at 74.60, below which there is not much to hold it up until around 70.00, with the next major target being at 67.14 (May 2010 low).

 

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