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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INDICES AUSTRALASIA ASX – 5407 ( +115 or +2.17% ) Last week we noted the ASX appeared to be forming a base formation and we have since rallied from here. With no major news this week on the ASX, we will look to what the market sentiment is throughout the week. We will be discussing this market in more detail in the LIVE CHAT ROOM . For a continued move to the upside we would like to see this market break and close strongly above 5437. If this were to happen, we could see a move into 5504 and 5521. A strong break above these levels could see a move to retest the all important 5550 level, and if momentum remains very strong we could see the ASX rally to 5664 by the end of the week. If we fail to close above 5437, we will look for a move back down to 5373. A break below this could result in a move back into 5294, and further breaks to the downside could see the ASX head to 5238. If we see a complete reversal to the downside, we will watch 5161 as a potential area of support. EUROPE DAX – 10614 ( +322 or +3.13% ) The DAX is still at critical levels and as each week goes by we get closer to an explosive move so BE PREPARED! VOLATILITY ALERT: Draghi speaks on Thursday, Flash PMI numbers on Friday. For a continued move to the upside we would like to see the DAX hold above above 10585 – 10601, followed by a break above 10749. Should this occur, we may see another push higher into 10863. Further breaks of this level could see the DAX rally 10983 and 11060 before a pause. If we fail to hold above 10601, we will look for a move back down to 10475 and should there be further downside, we could see a move lower to 10382. Should momentum remain very strong, we will look for a move down to 10158. US SP500 – 2165 ( +25 or +1.17% ) A strong week last week saw this market fail to close above our key 2176 level. This is a key level we will be watching this week. VOLATILITY ALERT: Consumer Confidence on Tuesday, Core Durable Goods and Janet Yellen testifies on Wednesday, Quarterly GDP and Yellen speaks on Thursday. For a move higher we must now see the S&P break and close above 2176. Should this occur we will look for a move back up into 2194. A strong break and close above 2194 is likely to see the S&P set its sights for 2200. If we can hold above 2200 this week, we will ultimately then look for a move to 2212. If we cannot close above 2176, we will watch for this market to hold 2150. A break below 2150 may see this market retest the previous all-time highs at 2137. A strong break through 2137 could result in a fast move back down to 2126. FOREX AUD/USD – 0.7622 ( +129 or +1.72% ) The $AUD came right into our key area starting from 0.7662 – 0.7683 before too reversing on Friday. We will also be discussing this market again in more depth in the MEMBER PORTAL this week. For a move higher we would like to see the AUD hold above 0.7617, followed by a strong break and close above the 0.7662 – 0.7683 region. A strong break and close above these levels could then see a quick move to 0.7729 before a pause; and if momentum remains strong we will look for strong move into 0.7789. If we cannot hold above 0.7617, we will look for a move back down to 0.7561. A strong break below this level may result in a move back down into 0.7447, and further breaks lower could see 0.7364 before another potential pause. If momentum remains strong, a break and close below 0.7364 could see a sharp move down to 0.7282. EUR/USD – 1.1226 ( +70 or +0.63% ) The EURO has been quiet as the market is still undecided on where we are headed longer-term. VOLATILITY ALERT: Draghi speaks on Thursday, Flash PMI numbers on Friday. For a sustained move higher we would now like to see the EURO break above 1.1248. If we can continue to break higher we will look for a quick move into 1.1347. Should momentum remain strong to the upside, we cannot rule out a move back up to 1.1380 this week. If the EURO cannot close above 1.1248, we will watch for a move back down to 1.1201. A break below this level could see this market trade quickly down to 1.1117. Should we see further breaks to the downside, a move to 1.1083 cannot be ruled out; and if momentum remains very strong we could see a sharp move down to 1.1033 GBP/USD – 1.2963 ( -35 or -0.27% ) Cable was virtually unchanged last week and as such our levels remain unchanged. VOLATILITY ALERT: Kuroda speaks on Monday and Thursday, Household spending and CPI on Friday. For a move to the upside we would like to see this market break above 1.3035. If the GBP can hold this level we will look for this market to head to 1.3227. Should we see a strong break through this level we could see the GBP/USD test 1.3426 very quickly. If momentum remains very strong, a move to 1.3644 cannot be ruled out. If we cannot break above 1.3035, we will look for a move back down to 1.2928. A strong break below this level could see a quick leg down into 1.2720. Should we break this level we will watch for a sharp move down to 1.2510; and if momentum is very strong 1.2297 cannot be ruled out. USD/JPY – 100.99 ( -125 or -1.22% ) We have been talking about this market for many months now and the USD/JPY is the market we are watching very closely. This market is getting closer to a very important juncture and will also likely result in a VERY BIG MOVE. If you are not prepared for this BE PREPARED. The move may be quite extreme. VOLATILITY ALERT: Kuroda speaks on Monday and Thursday, Household spending and CPI on Friday. We have some major levels in play (discussed in our Members Forum) and will continue to discuss this market in our MEMBER PORTAL . For a continued move to the upside we would like to see this market hold 100.76 and break above 102.29, followed by a break and close above 103.21. Should this occur we will look for move into 103.99. A strong break above 103.99 could see a move to 104.97, and if momentum remains strong we cannot rule out a sharp move higher to 106.30. If however the USD/JPY cannot hold above 100.76, and break above 102.29, we will look for a move down to 100.61. A strong break below these levels could see the USD/JPY trade quickly down to 99.90 before a pause. If we continue to trade lower, a move down to 98.22 is possible. Should we break this level, we may see a very sharp move down to 97.55 and 96.92. COMMODITIES GOLD – 1309 ( -19 or -1.43% ) Gold ended last week slightly lower, and once again we could see an explosive move in this market this Wednesday. Our key level of 1333 has proved to be a very important level for this market. We will also be discussing this in more detail this week in our MEMBER PORTAL . For a continued move higher we would like to see GOLD break back above 1322, and more importantly 1333. If we can hold these levels we will look for a move back up to 1355. A break above 1355 could see GOLD retest the important 1375 level before another pause. This is a key area and should we see a strong close above 1375, we will look for a move to 1400. If Gold cannot break above 1322, we will look for a move back down to 1303. A strong break and close below this level may result in a retest of 1294, and further breaks to the downside could see Gold trade retest the important 1276 level. If downside momentum continues to persist, a strong break through 1276 could see a 1257 by the end of the week.
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