Market Brief – Monday 18th November 2013

This market brief is an overview of the week ahead and some of the events we see as being important to the markets.

Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.

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We may take multiple trades throughout the week. Currently Trade View is Light Net Long.

AUSTRALASIA

ASX – 5403

The ASX started the week lower and then attempted to peg back its losses towards the end of week but still fell short by about 40 points.

For the up move to continue we would like to see strong long up bars past 5449. If the upward momentum continues then we could see the range completed near 5506. A solid break past 5506 could see the ASX pushing towards the highs of the Standard deviation channel, which would see 5603 – 5633 area reached.

If the ASX breaks back down then there are a number of levels of importance in the 5300 range. The first is 5374, and if this is broken then 5341 could be next. If the down move is strong then 5291 – 76 area will be next to watch. If this area is broken then the ASX needs to find support near the 5229 – 01 area otherwise we are back in the 5100’s.

EUROPE

FTSE – 6688

The FTSE continued lower last week and pushed below 6657, but then bounced back up to close 30 points higher. We will be watching this level closely as it has been tested four times in the past few weeks.

For the upmove to restart, we would like to see an early break past 6700 followed by strong long up bars breaking through and closing above 6740. Once this is achieved and the momentum is strong then the area between 6784 – 6817 will be tested next.

For the down move to continue we would like to see a solid break and close past 6657. If this is done convincingly then 6609 could be reached. Once 6609 is broken then 6562 could be seen next. If the downward move is strong and continues past this area, then we could see 6450 – 32 reached, which would complete the range set in August.

DAX – 9165

The DAX pushed towards the highs of the range reaching a high point of 9188 which completed the full range mentioned last week (9167 – 90), but unlike the previous week where it fell away, this time it only closed 20 points lower which could be a sign of a new attempt to break above this level. With divergence forming in some of the secondary indicators, Trade View will be monitoring the DAX very closely for early signs of a down move.

With the S&P at all time highs and the DAX near all time highs, we will be sticking with the previous week’s projection. We would like to see the area between 9167 – 90 broken with strong long up bars before we revise any upper targets. But if the break is strong and we see continuous 100+ days then 9411 will be the completion of the new range.

If the DAX cannot push past 9190, then we would like to see solid break back down past 9076 early in the week. This will lead the way to 9029 being reached, and if this level is broken then we could see 8976. If we don’t see support at this level and the moves are strong then 8894 will be watched closely.

US

S&P – 1798

The S&P reached a new all time high of 1798 as mentioned in our previous report on 4 th November. As we are now at all time highs and at the top of the range no upper target will be projected.

If we see a solid break up from this week, then we will need to monitor the strength of the move more than specific target levels. This will be discussed in our members area if it occurs. To become a member please contact us.

If we have seen the highs for the S&P and a new down move starts, then we would like to see a solid move past both 1777 and 1769 before reaching 1744. If this occurs and the momentum is strong then 1736 – 25 area could be tested.

NASDAQ – 3419

The NASDAQ moved higher last week following the lead by the S&P. It has also reached a high of 3423 which is the lower level of the range mentioned previously (3422 – 3443).

If we are to see a continuation of the upmove, then we would like to see a solid break and close past 3443 early in the week, and if so we could see 3457 reached. Once this level is broken we will revise any further upper targets.

If the NASDAQ cannot break 3443 and heads back down, then we would like to see a strong break past 3365 before the 3329 – 26 area is reached which could slow down the move briefly.

FOREX

AUD.USD – 9365

The AUD bounced up and down in a 100 point range all week, so there may be some uncertainty with this currency pair.

For a new upmove to restart we would like to see a solid break past 9406 followed by a move past the 9439 – 58 area before seeing 9523. If 9523 is also broken then we could see it reach the area between 9575 – 99.

If the down move is to complete its range then first we need to see 9325 broken followed by a push down towards 9210 which would complete the range. If the momentum is strong then we could see 9189 tested and if broken then an ambitious but still possible extension down to 9083 could be achieved.

EUR.USD – 13494

The EUR is bucking the trend at the moment and is trying very hard to move higher and it did so last week. But as Draghi has indicated, he would like to see the Euro lower by cutting Interest rates but could also be faced with a Japan style of deflation.

If the EUR continues its move higher then we would like to see a strong break with long up bars through 13514 before we see 13564. if then 13564 is broken this could lead the pair to reach 13637 and ultimately 13697.

If the USD continues its strength then a break down past 13433 needs to occur before we see the important area between 13433 – 13397 tested. If this level is then broken with long solid down bars then we could see the EUR reach 13337 and if the momentum is strong enough an over extension down towards 13176 is possible.

GBP.USD – 16114

The GBP continues to find strength against the USD. The idea of continued FED stimulus is helping. Without predicting if this market has overpriced some of these pairs against the USD, if the stimulus does slowdown, then we could see some serious volatility in these markets.

If the GBP continues to buck the trend, then further breaks up could occur if we see a break past 16223 – 60 area, which could lead the pair towards 16379. If this area is broken with long solid up bars then 16427 will be its next test.

For the down move to restart then a break back below 16067 will be a starting point. Once this level is broken, then 15986 will be tested, and if broken then 15841 will be the next level to watch. A solid momentum break past this level could see the 15786 – 22 area reached which would complete the range.

USD.JPY – 100.16

Maybe its time for the USD to peg back some of its status against the JPY as the currency of choice, this occurred last week with a strong rally pushing the pair above 100.00, the big test now for the USD is whether or not it can stay above 100.00.

For the rally to continue, first we would like to see the USD stay above 99.99, and once this is achieved, a solid break with long up bars needs to occur early in the week past 100.52. Once this is broken then a move up to 101.40 can start. If this level is also broken with strong momentum then we could see the ambitious target of 102.51 again.

If last weeks rally was just a short burst of fresh air and 100.52 proves hard to break, then a move back down past 99.99 could lead the way to 99.14. This level 99.14 needs to be broken early in the week before we could see 98.81 – 64 which could be forming as a potential support level.

COMMODITIES

GOLD – 1288

After an initial down move early last week GOLD bounced off a FICM level of 1269 to close flat.

If GOLD is to move higher from here we would like to see a strong break with long up bars through 1293 and 1311 before reaching 1342. Once 1342 is reached it needs to be broken with strong upward momentum otherwise it could become a point of resistance quickly. Once 1342 is broken then 1391 could be the next level reached.

If the down move continues then a solid break past 1269 early in the week could lead the way to 1247 and then 1223 could be tested next. If 1223 does not provide support GOLD could dip below 1200 once again.

US LIGHT CRUDE OIL – 93.70

OIL continued its move lower and reached a low of 92.50 which completed the second range down. OIL has now potentially settled between two of FICM’s levels (93.44 – 94.55). These will play important roles moving forward.

For OIL to move higher we would like to see 93.94 broken early in the week with long solid up bars, followed by a solid break past 94.55. Once this is broken we would like to see a further break past 9566 which if the momentum is strong could reach 9744.

If 93.44 cannot hold the bears back then a solid break down could see 92.51 tested again and if broken this could lead to 91.46. If this level cannot hold the down move then 90.19 could be tested next. As mentioned in last week’s report, if the momentum is strong then 85.69 is the next level we will be watching.

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