Tuesday, October 18, 2011

Tipping Point - Market Analysis for 18th October 2011 by Singaporeseeds

Daily chart for Dow

Daily chart for S&P

Daily chart for NASDAQ

From my last market analysis:
“All 3 indexes went back up to test the 50 day moving average and fail. Market bounce is over for now. The EUR/USD, Crude oil and the market had been moving in sync for the past few weeks. Both EUR/USD and crude oil are pointing down right now. I had a bounce signal for EUR/USD mid-week, but the signal failed on Friday. Failed signals are more reliable than successful ones and we should see all 3 (EUR/USD, Crude and the indexes) move to the downside next week.
Final target still at 1,000 by end Oct 2011.”

Market analysis for this week:
I was in China on business last week and was not able to write my market analysis. Anyway the market rallied back to resistance at 1,215 on S&P last Friday. There is significant resistance at this level. If we break above 1,215, the downtrend since July 2011 would have ended and I would be back as a bull. However as of yesterday, we are still down.

We should be moving back to 1,100 in the next few sessions with a bounce at 1,174.

Since August 2011, the S&P had been trading in a range between 1,215 and 1,100. I now believe we would still be in this range for the rest of the year. However whether it goes up or down in 2012 remains to be seen. I would believe the direction for 2012 will depend largely on the actions of the Europe governments over the next few weeks. As of now, I am favouring a down 2012 with targets of 980 and then 680 on S&P.

Daily chart for the Dollar

Quote from my last market analysis:
“I was expecting the dollar to dip before continuing the next leg up. But looking at weekly charts, the dollar is still very bullish (huge bullish divergence) with 4 more weeks of rally to go. This might be a strong rally up similar to what we experienced in Aug-Sept 2008.

Final target at 82.5 on dollar futures. This would be 23.50 on UUP.”

Market analysis for this week:
We should see the 50 day and 200 day moving average cross on UUP in the next few sessions. On dollar futures, it had already crossed. This is very bullish for the dollar and I think should bring the dollar up over the next few sessions. However there is significant resistance at 22.50 so I would be watching carefully if the dollar is able to break above this level.

I do have a final target at 23.50 on UUP by the end of the year.

Daily chart for Gold

Gold made a double top pattern and price is now moving up to test the base of this double top pattern at 165. Should it fail to break above this level, we should see gold at 145. I expect this should happen in the next few sessions.

Daily chart for Silver

From my last market analysis:
“As for SLV, my target is at 18.60.”

Target still the same.

Daily chart for Crude Oil

From my last market analysis:
“Crude tested resistance at 32 this week and reversed back down. Target now at 28.”

Crude formed a bullish divergence over the past few weeks and broke above its long term downtrend. (purple trendline)
We should see crude find support over the next few sessions before rallying to 37.

Daily chart for Natural Gas

My last market analysis:
“The bullish divergence on RSI and MACD should be a signal for higher Natural Gas prices soon. This is the same for weekly and monthly charts.

We should see the start of a multi-year rally for Natural Gas by the end of the year. As I’ve reiterated numerous times, this is a long term play so be prepared to keep some gas for a couple of years.”

Analysis is still the same.

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