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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.
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Trade View has entered the weekend Net Long.
FREE WEBINAR THIS WEDNESDAY 29TH OCTOBER 2014
Trading Styles Webinar #5 – Fade the Market
AUSTRALASIA
ASX – 5432 ( + 116 or + 2.18% )
Another strong move by the ASX breaking above 5400 with ease. It closed at 5432 which was only 16 points lower than our target level of 5448.
For the up move to continue we would like to see an early solid long up bar break and close past the area between 5448 – 63. Once this occurs we could see 5505 and 5524 reached quickly. If the upward momentum is strong then we could see the ASX find itself near 5595 and possibly extend to 5636 where it could find some early resistance.
For the down move to restart we would like to see the area between 5448 – 63 become a solid level of resistance before a move back down towards 5392 is made. Once this level is broken 5367 will play an important role as it will need to be broken with a solid long down bar with strong momentum. Once this occurs and then the ASX could find itself near 5270 very quickly.
EUROPE
FTSE – 6414 ( + 110 or + 1.74% )
The FTSE moved higher early in the week but then moved sideways for the rest.
For the move higher to continue we would like to see a strong early break past 6459. We would then like to see a long up bar break through this level before reaching and possibly finding resistance near 6523 – 50.
If the downside move restarts then we would like to see an early break back down past 6394 followed by further breaks past 6357 before reaching 6264.
DAX – 9018 ( + 201 or + 2.28% )
Another move higher by the DAX with one big up day followed by ½ a move back down and so on. Importantly the DAX has closed above 9000 again but if we don’t see continued strength then this might not hold.
For the up move to continue this week we would like to see 8961 hold as a strong level of support. Once this is done then we could see 9084 tested again followed by a strong momentum break with a long up bar past the area between 9164 – 9202. If the momentum continues strong we could see a push past 9286 finally reaching an ambitious level of 9403.
For the DAX to restart it’s move lower we would like to see an early strong reversal past 8961 before further downside moves reach 8890 and possibly 8710. If the downward momentum is strong then an ambitious level of 8522 could be seen.
US
S&P – 1966 ( + 78 or + 4.13% )
OK, it is up for now.
For the up move to continue we would like to see an early break past 1968 followed by a long up bar through 1981. If the S&P can get through this level in convincing fashion this could then lead it to break through 1993 and eventually 2002. Then 2010 and possibly new highs would not be out of reach for this Index.
For the down move to restart we would like to see 1981 become a solid level of resistance followed by further moves back down past 1953 and 1943. Once this occurs then 1927 – 21 area will need to hold otherwise we could see the S&P below 1900 again.
FOREX
AUD.USD – 8799 ( + 50 or + 0.57% )
The AUD had a sideways week closing slightly higher on the last day. It has closed slightly above our key level of 8774. We will watch to see if this continues this week.
For the up move to restart we would like to see 8774 (key level) hold as a strong level of support before a push higher past 8823 is made which could potentially reach 8971.
The AUD has now broken down and the next key level is 8660 (key level – lows from Jan 2014). If this level is broken early this week we could see 8563 and 8461 very quickly. Once these levels are broken 8378 could be seen.
EUR.USD – 12670 ( – 89 or – 0.70% )
The EUR tried to stay above 127 but found it difficult, with more talk about potential QE in the Eurozone its hard to see it going higher for now but “never say never in the markets”.
For an upmove to restart we would like to see an early break past 12694 followed by a strong up bar break and close past 12764. This will then need to become a strong level of support before we see 12823. If the upward momentum remains strong then a possible extension towards 12967 – 81 is possible.
For the down move to continue we would like to see 12764 become a solid level of resistance followed by a move lower reaching 12652 and 12608. if the downward momentum is strong then 12491 could be seen and a possible extension towards 12369 is not far away in these markets.
GBP.USD – 16087 ( – 3 or – 0.02% )
After an early move higher the GBP came back down to only close lower for the week by 3 points. Therefore our comments from last week remain the same.
For the GBP to move higher we would like to see a solid start to the week breaking past 16102 and 16148. This could then lead the pair to reach 16246 and possibly 16307.
Another leg lower could be seen if an early break past 15988 occurs. This could then lead it to reach 15844 and 15723 respectively. If the down move is strong then we would like to see a long bar break past 15723 before reaching 15681 and possibly extending towards 15522.
USD.JPY – 10814 ( + 125 or + 1.17% )
The JPY gained some strength early in the week but the USD took over and a 200 point rally followed. As mentioned earlier it looks like “This pair is now following the equity markets.”
For the USD to move higher we would like to see a strong early break with a long solid up bar past 10836 which could then lead the pair towards 10915 and eventually 10985. If the upward momentum is strong we could see another attempt at closing above 110.
If the down move restarts we would like to see 10836 become a solid level of resistance followed by an early break and close back past the area between 10763 – 23 before reaching 10683. If this level is broken then we could see 10579 and possibly 10525 again.
COMMODITIES
GOLD – 1230 ( – 8 or – 0.65% )
Until the money flow stops from the FED, GOLD will find it difficult to find direction. We saw recently that as soon as Volatility spikes GOLD moves higher, but then when it fades back down so does GOLD. As GOLD has only closed a few points lower our comments from last week remain the same.
For the upward move to continue we would like to see an early break and close past 1241 again reaching 1252. Once this level is breached we could see 1263 and 1274 respectively
If 1241 proves hard to break then for the down move to restart we would like to see 1226 broken followed by a strong push past both 1216 and 1208 before testing 1180 again.
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