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
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Light Net Long. AUSTRALASIA ASX – 5234
The ASX started the week with a 30 point gap down from the previous week’s close and was not able to recover from that point. It moved lower and has now closed below the Standard Deviation Channel.
For a new up trend to form we would like to see a break back above 5255 which would place it back into the Standard Deviation Channel. If this happens a move towards 5313 – 23 could take place. If this area is broken with solid up bars, then we could see 5399 which will complete the upward range.
For the down move to continue we would like to see a solid break past 5190 which could lead the ASX back down to 5144 – 25, which would complete the range on the way down.
EUROPE FTSE – 6476
The FSTE opened the week at 6476 and closed at 6476. It moved lower by 100 points and finished flat, but it is still near our previously mentioned target of 6483. We now have a slowdown formation taking place in the opposite direction.
For the upmove to restart, there are some key levels that we are interested in; the first being 6483 – 87 which is a short term level of interest, and if it breaks above this level then 5263 could be reached. If the upward momentum is strong and the FTSE finds no resistance at 6599 then we could see 6657.
If the down move is to find another leg down, then 6420 needs to be broken and early in the week. If this occurs and the momentum is strong then 6358 and 6307 would be the next downward targets.
DAX – 8633
The DAX has had another sideways moving week and it looks like it is preparing itself to lead the markets forward. We are watching the DAX’s movements very closely here at Trade View.
If the DAX takes the lead and continues higher, then we would like to see 8678 broken early followed by a solid move towards 8771. If the upward momentum is strong then the full extension of the move could see 8883.
If the DAX takes a leg lower, then 8553 will need to broken before we see the 8432 – 28 area. If this area does not hold and the downward momentum is strong then 8340 could be next.
US S&P – 1691
The S&P has had a bumpy ride of late, mainly due to the indecisive nature of the policy makers, from the FED through to the Politicians. The markets need clear action to move forward, which is something that is clearly lacking. The S&P reached a low of 1669 which was 1 point off our target level of 1668.
For the up move to restart and continue higher, we would like to see 1693 – 96 broken early with strong long up bars through 1707- 1710. If it closes above this level, then we could see the 1726 – 33 area reached. Upper targets will be revised once this occurs.
For the downward process to continue, we would like to see the 1685 – 80 area broken with strong momentum which could push through 1668 and eventually reach 1658. If 1658 does not show support then 1636 could be reached.
NASDAQ – 3240
Another sideways moving week for the NASDAQ, it makes us ask the question; are we in for a strong move higher?
For the full effect of the up move to occur we need to see 3247 broken early in the week followed by strong up bars past 3275. If 3275 is broken with long up bars and strong momentum then we could see 3373 which would complete the full range set back between June and July.
If we are to see a down move, then 3220 needs to be broken early followed by a strong move past 3166. If this occurs then we could see 3100.
FOREX AUD.USD – 9435
The AUD is trying to regain some composure and move higher as it has closed above an important level of 9395 – 9407.
For the uptrend to continue, we would like to see an upmove with long up bars breaking past 9495 followed by moves past 9528 and 9575. If 9575 is broken we will look to revise our upper targets.
If a down move commences, then a solid move down to 9358 could be reached. If this level is then broken we could see 9251, and if the downward momentum is strong then 9083 could be the next level where the AUD finds support.
EUR.USD – 13556
The EUR began the week strong and looked like it wanted to continue higher, and initially it did until the USD found strength and pegged back the rally with a 150 point down move.
If the move up is to continue, then we would like 13554 hold as solid support before a move higher towards 13625 is created. Once this level is broken with long up bars then 13711 could be achieved.
If the USD strength continues this week then the EUR could be one of a couple of currencies to fall quickly from their elevated levels. If this occurs, then 13465 needs to be broken before a move down to 13397 is reached where support might be found.
GBP.USD – 16005
The GBP appeared unstoppable early in the week, but came Friday, and the USD strength turned back around. It not only started below the Standard Deviation Channel but continued lower with a 170 point drop.
For the up move to restart, we would like to see a reversal of Friday’s down move which inturn would be a break back above 16114. If this level holds as solid support, then we could see further moves up past 16225 and finally 16381.
For the down move to continue, we would like to see 15924 broken with long solid down bars which would then lead the GBP to move lower and possibly reach 15891. If 15891 doesn’t show any support and USD continues to strengthen, then 15720 could be the next ambitious target.
Trade View clients can see our video on 02 Oct 2013 in the Market Brief area under Videos, which discusses the current break. USD.JPY – 97.48
There is simply no USD strength here so it may be worthwhile looking elsewhere.
For an upmove to occur this week we would like to see a break back up above 97.55 followed by solid breaks through the following levels 98.20, 98.63, 99.14 before we see a reversal in trend.
If the down move continues, then we would like to see 97.55 hold as solid resistance with the move down breaking 97.27 with long down bars. This could then lead the pair to 96.80 and eventually 96.14. If the downward momentum is strong then 95.07 may not be out of reach.
COMMODITIES GOLD – 1309
GOLD is still struggling to find momentum at the moment and get back to its former days of glory. This however, could be a steep hill if the FED decides to stop the money flow and the USD rises. The other unconventional thought could be that if the world markets start a strong rally then the commodities could be pushed higher as well, as this occurred in the past 2009 – mid 2011.
For an upmove to start we would like to see the area between 1315 – 24 broken with strong momentum followed by a strong close above 1347 and continuation towards 1380. If this occurs we could see 1391 which would play an important role in whether GOLD moves higher or not.
As we are still within the Long term Standard Deviation Channel, If there is a continuation of the down move, then a break back down past 1282 could lead the way for GOLD to reach 1261 and followed by 1225 which would complete the full range set back in April – May.
US LIGHT CRUDE OIL – 103.61
After a solid move down past the Standard Deviation Channel we saw OIL rebound almost 300 points to close inside again.
For the up move to continue then we would like to see 104.28 broken early in the week followed by a strong break and close above 105.86. If this occurs then we could see 107.21 reached.
If the downward momentum restarts then we would like to see long down bars past 102.70 which could start a short term freefall and reach 100.79, and possibly even 99.47 very quickly.
We will revisit downside targets once this is reached.
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