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do not publish updates of such changes.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 – 5463 ( +1 or +0.01% )
The ASX moved sideways closing only 1 point higher. The ASX bounced off our FICM level of 5424 twice which confirms our comment from last week “5424 will play an important role”. As no real movement has occurred our comments from last week remain the same.
For the up move to restart we would like to see 5424 hold as a solid level of support followed by a break back past 5562 with a long up bar. If the momentum is strong when it breaks through 5562 then we could see a further push higher towards 5704. As mentioned last week, this would need to be based on strong momentum.
If the down move restarts then we would like to see an early break back down past 5424 with a long solid down bar. Once this level is broken then we could see temporary support near 5367. If this level does not provide support and is broken with a long down bar then 5270 could be seen with a possible extension down to 5201.
EUROPE FTSE – 6835 ( +21 or + 0.31% )
The FTSE moved sideways last week closing only 21 points higher. Therefore our comments from last week remain the same.
For the up move to continue we would like to see strong upward momentum continue and a strong break and close past 6848 needs to occur early in the week. Once this occurs we could see an extension towards 6878 and possibly 6904.
For a down move to restart we would like to see 6848 become a solid level of resistance followed by a strong move back down through 6804 reaching 6740. If the momentum continues then we could see 6687 – 56 area reached.
DAX – 9591 ( +41 or + 0.43% )
The DAX went down early in the week but the down move was short lived and it closed 41 points higher. Therefore our comments from last week remain the same. NOTE: Divergence forming.
For the upmove to restart again then we would like to see an early break and close past 9627. If the momentum continues strong past this then we could see further extension towards 9735 – 62 area which would complete the range set back in DEC 2013.
If the down move is to start then we would like to see a solid break early in the week past 9505 pushing towards 9401 Once this level is broken then we could see the area between 9365 – 9321 reached. As mentioned previously if the downward momentum continues with heavy volume then the area between 9222 – 9201 will play an important role for the Index.
US S&P – 1878 ( -1 or – 0.01% )
The S&P also moved side ways last week closing only 1 point lower. Therefore our comments remain the same as last week. As the larger stocks go up the tech and small caps continue to go down. History shows that this type of market divergence has not ended well. Maybe the underlying picture is not so great. We have our concerns. NOTE: Divergence forming.
For the S&P to break higher we would like to see an early break and close past 1884, once this level is broken then we would like to see solid upward momentum break through the 1897- 1901 area before reaching 1915.
For the down move to continue then we would like to see an early break past 1854 reaching 1841. If the downward momentum becomes stronger then we could see 1812 tested again.
FOREX AUD.USD – 9361 ( + 85 or + 0.92% )
The AUD moved higher last week but is still technically range bound.
For the medium term up move to continue then we would like to see an early break back above 9391. Once this level is reached and broken then we could see 9461 tested again with a possible extension towards 9491.
If the AUD restarts its short term downward move then we would like to see 9300 broken early before reaching 9226 followed by the area between 9181 – 76. If this area is also broken with strong downward momentum we could see 9116 followed by 9035.
EUR.USD – 13758 ( – 75 or – 0.54% )
As we have mentioned a few times before ‘caution should be observed with this pair’ due to last weeks volatility. This pair is obscenely geared towards verbal rhetoric at the moment and if Draghi does not do anything at the next meeting then we might see continued Volatility with no real outcome.
For the up move to continue we would like to see a solid break and close above 13806 followed by a further break past 13868. If the momentum is strong then we could see a test of the New highs created just last week of 13990 tested.
For the EUR to continue last weeks down move then we would like to see 13722 broken early reaching the area between 13685 – 31. If this is also broken with strong momentum we could see 13589 with a possible extension down to 13515.
GBP.USD – 16846 ( – 22 or – 0.13% )
Another push higher for the GBP, this time reaching 16996, 4 points short of the somewhat magical level of 17000. Then 150 points later it was back down.
If the GBP restarts its move higher then we would like to see a solid break past 16902. Once this occurs we could see another test towards 17000. For this level to then hold we need to see a break and close above 17000 with a long solid up bar.
If the continued divergence has any effect then a reverse back down could occur if 16791 is broken early reaching 16749. If the momentum is strong this could lead the pair to reach 16659. Further breaks past 16659 could see 16537.
USD.JPY – 10186 ( – 33 or – 0.32% )
A very timid move by the pair considering some of the other moves we saw during last week. As debt is mounting for both countries the camel’s back could be broken at any time. This is why we continue to mention that caution should be taken.
For the USD to move higher we would like to see an early break past 10216 followed by a strong break above 10264 with a long up bar reaching 10309. If the momentum is strong then we could see an extension towards 10353.
If downward move gains strength then a solid break past 10152 could lead the pair towards 10052. If 10052 is then broken with a ,long solid down bar we could see 9977.
COMMODITIES GOLD – 1288 ( -11 or -0.85% )
GOLD attempted to move higher early in the week but found itself back down sharply in the middle of the week dropping 28 points in one day. Complacency in the VIX and a lack of safe haven status for GOLD is a concerning market trend at the moment. What this means that if any event occurs then sharp down moves could be aggressive and unforgiving in the equity markets causing the VIX to spike and GOLD to rally.
For GOLD to move higher from here then we would like to see 1284 hold as a solid level of support followed by a strong break past 1295 – 99 area. Once this occurs we would like to see another break past 1316. If the momentum is strong then we could see 1327 – 34 area reached.
If the down move restarts then we would like to see 1284 broken early in the week witha long down bar. Once this occurs then we could see 1269 tested and if broken with strong momentum then 1246 could be seen.
US LIGHT CRUDE OIL – 100.04 ( +13 or +0.13% )
OIL moved sideways last week bouncing between two of our FICM levels 99.34 and 100.85 to close only 13 point higher. Therefore our comments from last week remain the same.
For the upmove to restart we would like to see a strong solid break and close past 100.32 and 100.85. Once this occurs then we could see 101.90. If the upward momentum is strong and we break 101.90 then we could see 102.76 reached. If we see 102.76 broken then OIL could settle near 103.93.
If the $100 level proves to be hard to hold and the down move continues then we would like to see 99.34 broken again early in the week with a long solid down bar. Further downward momentum could drive OIL down past 98.12 and towards 97.43 and even extend to 96.99.
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