Indices/Commodities Outlook


S&P Futures 2120 The S+P made a new all time high on Friday, reaching 2122 before closing at 2120 although the move up was not confirmed by new highs in the DJI or the Nasdaq, leaving traders wondering if this is the beginning of a run to new high-ground for the indices in general, or possibly another false start. If we are to head higher, then above 2122 there is not too much to resist a crawl towards the trend line joining the previous highs, currently at around 2150. Further out, the longer term upside target would appear to be the 161.8% projection of 666 (Mar ’09) to 1372 (May ’11) from 1073 (Oct ’11) at 2206. If the index fails at current levels then we are in for further choppy trade and a move back towards/below 2100. At this stage this looks less likely and buying dips seems to be the plan.
DJI 18238 The DJI headed higher on Friday but only made it to 18248, falling just short of the all time high at 18253 (2 March), but beyond which would head on towards 18300/400. In line with the S+P, the distant target upside target would appear to be the 161.8% projection of 6458 (Mar ’09) to 12871 (May ’11) from 12225 (Oct ’11) at 20495. A failure at current levels would see the choppy conditions continue, possibly for another look at 18000. The dailies point higher, and given that the recent crop of US data indicates no hurry at all for the Fed to raise rates, a run to 18300 should not surprise.
ASX SPI 5749 The SPI continues its recovery from the early May lows, and having taken out the 5730 Fibo resistance it headed up to 5761 on Friday, before consolidating close by for the rest of the session. It looks as though there may be more room on the topside, for a run towards 5780 (50% of 6008/5558) and possibly to 5800, a break of which would then head towards the 61.8%  and 76.4% Fibo targets at 5834 and 5899 respectively. The downside will see bids at 5730 ahead of the 100 DMA (5710), the 200 HMA at 5680 and the 100 HMA at 5650. Buying dips towards 5710/20 looks to be the plan for today.
GOLD 1224 Gold had a choppy 1210/26 session as it consolidated its recent gains above 1200. On the topside, 1225 (50% of 1307/1142) is proving stubborn resistance but a break of which could then head on towards 1238 (50% pivot of 1345/1131), beyond which would open the way towards the 21 Oct high at 1255. On the downside, having taken out and closed above the 200 DMA (1218), this should now act as support ahead of  the 100 DMA (1210) , the 100 HMA (1206) and further buyers at 1200. The dailies are pointing higher but the 4 hour charts are very overbought so while we should see some upside progress it may be rather slow going.
SILVER 17.48 As with Gold, Silver continues to take advantage of the weak dollar, and on Friday spent the day consolidating its recent gains, trading a 17.20/57 range. Having taken out the 10 month descending trend resistance at 16.80 and the 200 DMA at 17.05, these will now act as the initial supports. In line with Gold, while the 4 hour charts are now overbought, the dailies point higher, so while the dollar remains under pressure it looks as though we could be in for a test of the 3 Feb high at 17.74 and the 50% pivot of the move from 21.57/14.40 at 17.98. Beyond here would head on towards the 21 Jan high at 18.47, but may take a while. Back below 17.20 ( Friday low), support now arrives at 17.05 (200 DMA) and then at 16.75 and 16.55 (100 DMA).
OIL(WTI) 60.76 WTI had a choppy session to finish the week (59.30/60.80), but recovered from a sharp selloff after the US data, to finish at session highs. More choppy but rather directionless trade, close to current levels looks to be the most likely outcome early in the week, and as we said last Monday, 58.00/61.00 could well continue to cover it for a while, although with the weekly charts pointing higher, buying dips remains the general theme.

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