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Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes.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 Net Short.
AUSTRALASIA
ASX – 5382
The ASX again traded sideways last week between both of our FICM levels of 5366 and 5423. Friday saw a high of 5433 but then it closed 50 points lower. As the ASX is ranging sideways our comments remain the same as last week with a slight amendment to the upside.
For the up move to restart we would like to see a strong close above 5423. Once this level is broken with strong long up bars we could then see a new attempt at 5483. If this level is reached and broken we will discuss further in our members area.
If the down move restarts then we would like to see an early break past 5330 and 5270 before reaching 5200. Once this is achieved we would like to see a solid break through this level continuing towards 5144. The test for the ASX will then come between 5125 and 5094. If this area does not provide support then we could see further downside moves.
EUROPE
FTSE – 6657
After an interesting start on Monday the FTSE finally moved higher reaching a high of 6706, but once again the momentum slowed and we saw it close 49 points off its highs and 54 points higher from the previous weeks close. One thing to note is that FICM is indicating a potential slowdown of the current move.
For the FTSE to have any chance of a new upmove continue then we would like to see 6657 become a solid level of support. Once this occurs then we would like to see a solid break and close above 6740 with a long up bar. This could then lead it to reach 6799 and possibly extend to 6848.
For the down move to continue we would like to see an early break past 6637 followed by another solid break past the area between 6586 – 63 reaching 6524. If the downward momentum continues then we will be paying close attention to the area between 6433 – 6395 as the FTSE could find temporary support.
DAX – 9619
After a strong open early the DAX moved sideways to close only 19 points higher from its open. We will also take note that the Dec 2013 range was meet the previous week and now we have a potential slowdown indicated by FICM. All we need is for the rest of the world markets to take a dive and we may have a perfect storm.
If we are to see a continuation of the up move then we would like see a solid start to the week with 9617 becoming a strong level of support followed by an early break past the area between 9720 – 9734. If further momentum continues then a test of the Jan highs of 9794 could be seen.
If the down move restarts then we would like to see an early break past 9617 followed by a strong push down towards 9509. Further down moves could be seen if 9431 is broken which could lead the DAX top reach 9351. Once this level is also broken we could see 9233 were the DAX could find its first level of support.
US
S&P – 1868
The Interesting thing about the S&P is that Goldman Sachs had a year target of 1900. On Friday the official high of the S&P was 1897.28 then the markets fell 30 points. Well done Goldman’s, great call. We will still be monitoring this very closely as we could see sharp moves in the near future. Basically pay attention.
For the S&P to move higher we would first like to see 1862 become a solid level of support before breaking above 1878. If the momentum continues strong then we could see another test of all time highs of 1897. If this occurs again we will discuss in our members area.
If Friday was the start of a bigger down move then and we see weakening data and the markets interpret it as bad then a break and close below 1856 could start a down move. Once this occurs then we would like to see 1837 broken early reaching 1812 and possibly 1805.
FOREX
AUD.USD – 9290
The AUD had a slow start to the week but eventually moved higher after no rate cut by the RBA.
For this current upmove to continue we would like to see 9289 become a strong level of support before reaching 9319. Once 9319 is broken then we could see 9404. If the momentum continues then 9491 could be the first level of resistance.
If the AUD starts a downward move then we would like to see both 9222 and 9185 broken early in the week followed by a strong break past 9143 and 9089. Once this occurs then 9017 could be tested. If the downward momentum is strong then an ambitious extension towards 8924 could be seen.
EUR.USD – 13701
After an early attempt at a rally the EUR moved lower to close down by only 50 points.
For the up move to restart we would like to see an early break past 13722 with a long up bar before pushing back towards 13790. Once this level is reached and broken then 13831 could be seen. If 13831 is also broken with strong momentum then we could see the EUR near 13938 – 13966.
For the EUR to continue its move down then we would like to see 13722 become a solid level of resistance before further breaks past 13685-48 are seen. If the momentum is strong then we could see 13589. If the downward momentum continues then we could reach 13515.
GBP.USD – 16561
After an up move early in the week we saw the GBP move lower and close down 76 points.
If the GBP restarts a move higher then we would like to see a solid break past the area between 16606 – 25 before reaching 16686. If this is broken with a strong long up bar then we could see a push towards 16747. If the momentum continues strong then 16914 could be reached.
If the down move restarts then an early break past 16537 could lead the GBP down towards 16443. If the downward momentum continues strong then 16375 could be seen and possibly 16298.
USD.JPY – 10324
After a strong start higher the USD fell away on Friday replicating the S&P move. It is looking like the S&P and the USDJPY are mimicking each other for the moment. Take note, in these current markets be prepared for this correlation to break at any time without warning.
If the USD finds strength then we would like to see a strong break and close above 10345 before reaching 10391. If the upward momentum continues strong then 10429 and 10479 could be reached.
If 10345 proves hard to break then another move down could restart if 10304 is broken early, we could then see 10243 reached. If the downward momentum is strong then we could see both 10186 and 10152 reached. Once these levels are broken we could see the pair near 10078 – 52 again.
COMMODITIES
GOLD – 1303
Last week we said “ If Normality comes back into the markets will GOLD be a safe haven?” The S&P basically collapsed after the jobs numbers and Gold rallied 20 points off its lows. Is this the start of Normal market behaviour?
For GOLD to restart the move higher we would like to see 1297 hold as solid support followed by an early break and close past 1314. Once this occurs then we could see it reach the area between 1349-56. We will revise and discuss in our members area once reached.
If the down move starts another leg then we would like to see 1282 broken reaching 1269. If the momentum continues then a break and close past 1269 could see 1246 reached.
US LIGHT CRUDE OIL – 101.08
OIL closed only 50 points lower after falling by almost 300 points reaching a low of 98.85. Therefore our comments remain the same as last week.
If the upmove continues then we would like to see a break past 101.82. Once this occurs then 103.01 could be reached. If the momentum continues strong then the March highs of 104.92 could be tested.
For a longer term down move to restart then we would like to see a break past 101.19 early followed by 100.14 be reached. Once this level is broken then 99.33 needs to broken with a long down bar before reaching 98.12 and then finding support near 97.41 – 96.95.
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