This market brief is an overview of the week ahead and some of the events we see as being important to the markets.
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The recording for the
Trading Styles Webinar #6 – Scalping is now available: AUSTRALASIA ASX – 5349 ( – 110 or – 2.02% )
Another drop lower for the ASX while the rest of the world markets rally. What we will be looking for is to see if the rest of the world rallies, if so then we could see the ASX move higher very quickly, otherwise we might see further legs down. The ASX did reach a low of 5277 with was only 7 points higher than our FICM level of 5270 mentioned last week..
For the up move to restart we need to see another long up bar break and close above 5367. Once this occurs we would like to see further long uop bars break 5392 eventually finding short term resistance near 5448 – 63. If the upward momentum is strong then we could see an extension towards 5524.
For the down move to continue we would like to see an early break past 5328 followed by a strong long down bar break and close below the 5270 – 64 area. This could then lead the ASX towards 5217. One this level is reached and broken with strong momentum the ASX could find itself finding some support near the area between 5177 – 51.
EUROPE DAX – 9714 ( + 479 or + 5.19% )
Basically once the DAX broke the key level of 9403 with a long up bar it only had one place to go – UP, and did it go up rallying 5% for the week. This was further fuelled on Friday by comments from the ECB, and from China (cutting Interest rates for the first time since July 2012). The DAX reached a high of 9735 which was only 10 points below our FICM level of 9745 mentioned last week..
OK, now here is my 2 cents worth:
The Markets are designed to be FREE of any manipulation. The simple idea of a Market is to go up on growth and down on no growth. I have mentioned this before and I will say it again “One thing to note is that if the central banks are throwing all this money at the markets then there must be serious underlying issues that they are either ‘forgetting’ or neglecting’ to tell us (the rest of the world). This is concerning.” Even so, the markets could continue to rally for the next empteenth years with this type of action. What type of action, well you make your own decision: http://en.wikipedia.org/wiki/Market_manipulation Also how quick we forget (without being for or against), http://en.wikipedia.org/wiki/We_are_the_99%25
For the up move to continue this week we would like to see a strong push up past the key FICM level of 9745 followed by strong long up bars through both 9829 and 9896. Then the real test will come, if we continue to see strong rallies, once 9896 is broken look for a touch on 10,000 once again.
Once again If the DAX has stretched itself too thin then a move lower could start early with a break past a key FICM area of 9673 following through to 9581. If this level is broken with a klong down bar then 9470 could be just a spectator on the way down towards 9403. 9403 will then be monitored closely. If it is broken with strong momentum we will discuss further in our
LIVE CHAT ROOM. US S&P – 2063 ( + 22 or + 1.08% )
The S&P continued its slow grind up. Intervention from China to lower rates has helped it POP up on Friday. Divergence is still forming to the downside..
“If anyone is brave enough to get in front of this market, then please be my guest.” Even though this is the case, we still feel something out of left field can topple this move very quickly so caution should be observed.
For the up move to continue we would like to see a strong break and close past 2088. Once this level is broken with strong momentum we will discuss further in our
LIVE CHAT ROOM.
For the down move to start we would like to see a strong break and close below 2057 reaching 2023 and 2010.
FOREX AUD.USD – 8670 ( – 75 or – 0.86% )
The AUD seems to be going through the motions at the moment, moving up and down during the week. We still feel the AUD has nothing to offer. Therefore our comments remain the same as last week. The AUD reached a low of 8566 which was only 3 points above our level of 8563 mentioned last week.
For the up move to restart we would like to see 8774 (key level) broken early in the week and then hold as a strong level of support before a push higher past 8823 is made which could potentially reach 8971.
Another move down by the AUD will need to break the key level of 8660 before we could see 8563 again following on to 8461 very quickly. Once these levels are broken 8378 could be seen.
EUR.USD – 12389 ( – 135 or – 1.08% )
It’s like deja vu, except in the opposite. We saw the EUR have another tame week early and then, Friday’s 190 point fall was created by Central Bank Intervention (Verbal).
“Will the Markets test the ECB? or will Mario Draghi bluff his way out of this one for a while.” The EUR reached a low of 12374 which was only 5 points above our level of 12369 mentioned last week.
If the EUR is to have any chance for an upmove then we would like to see an early break and close back past 12491 which could lead it back to 12608.
If the EUR was to take another leg down after Friday’s move then 12369 is first on the list followed by a long down bar break past 12258. If the momentum continues strong then look our for 12048.
GBP.USD – 15655 ( – 13 or – 0.08% )
After all that occurred on Friday it is surprising that the GBP did not move. Maybe this week? Therefore our comments remain the same.
For the GBP to move higher we would like to see a solid break and close back above 15723 followed by a strong move towards 15844. If the upward momentum is strong then 15988 could be reached where we might see some resistance forming.
If the GBP is to continue lower and breaks back down into the Standard Deviation Channel then we would like to see a long down bar break and close past 15522. If the downward momentum is strong then 15386 could be seen quickly.
USD.JPY – 11781 ( + 153 or + 1.32% ) “The USD just keeps on going and going and going” The Japanese feel the Yen has fallen too quickly Take note Bearish Divergence is forming.
For the up move to continue we would like to see another solid break back above 11813 before further moves higher are possible. If this level is broken we will discuss further in our
LIVE CHAT ROOM.
If the USDJPY has over extended its move and we see a move back down it could be very quick. This could occur if 11813 becomes a solid level of resistance followed by a strong down move past 11679 which could lead the pair to reach 11543. The full extension of the down move could reach 11433 before a possible reversal back up.
COMMODITIES GOLD – 1201 ( + 13 or + 1.09% )
A move higher by GOLD last week with Equity markets also moving higher. I think we said enough in our DAX commentary.
For the upward move to continue then we would like to see 1200 hold as a strong level of support before a bounce towards 1208 is made. Level’s we will be watching above 1208 for any potential resistance are 1216, 1226 and 1241.
If GOLD moves lower then we would like to see another strong break back below 1180 before reaching 1167 which could then lead it towards 1149. If the downward momentum is strong then 1103 and possibly 1091 could be seen.
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