Last week I opened up SharePlanner to occasional guest postings, primarily on the weekend, and last week’s blogger and regular contributor to the SharePlanner Chat Room, Adam Beaty, (who has his own blog called Bullogic that is definitely worth checking out when you get the chance) provided us with a Weekly Forecast and Recap on the broader markets, which includes all sorts of good charts that I believe you will find to be of great benefit for you when you take on the market next week. If you are also interested in having your articles posted on SharePlanner, just shoot me over an email using my contact page.
Good run up by the bulls but could this week make it a short run?
The futures market shows the nice bounce off of support to reclaim the upward trendline. As we can see the uptrend was quickly met with a past resistance of 1225. This is the same resistance that killed our two month rally. If the bulls cannot take over this resistance it will be putting in a classic double top which will see another sell off.
Here is a view of the S&P500 on an hourly basis to show what kind of mess this market has been in as of late. As you can see the market struggled for some time and has now quickly shot up. A quick run up like we just saw will never be able to continue without some what of a sell off or leveling. This is also a good depiction of the current resistance level.
The EUR/USD is playing in the downward channel nicely. We saw it find the bottom on Monday and Tuesday and quickly move back up to the top of the channel. What is interesting to note here is the two resistance lines it is now stuck at. We see the horizontal resistance and the top of the channel crossing at this point. Another move down would be in the cards here. A break of these two resistance lines would be a major bullish sign.
The GBP/USD found good support at the 1.55 mark and quickly made its way up to resistance at 1.58. At this point we should see another leg down before any move higher. If the pound does find strength it will be quickly met with the 50 day moving average as added resistance. Note that the 150 day moving average is starting to creep up for some support. More importantly the 200 day moving average is down at a support line, 1.53. This will be a good target for the leg down.
The USD/JPY never made it to the resistance line I figured I it would. Instead it leveled out then saw a huge leg down. The 50 day moving average is moving in to provide good support for the USD here. We will also see support come in at 81.99 if the 50 day doesn’t hold. Should see a bounce here at least back up to the point in leveled off, 84.40.
Here is the NYSI reversal indicator which has the slow stochastic overlayed on it. As you can see we have now moved to the extremes and are just waiting for a cross of the lines now. A cross will probably happen in the next week or so which means a bear run will be limited at this point.
Economic reports will be light this week with nothing to important or unusual coming out.
Market had a great run up as the bulls finished the week strong. Should expect a small sell off here to get the market out of being overextended. The charts all agree that a drop here should happen. We should also expect that any dips will be further bought up by the bulls. This week you want to pick out some long positions and wait for the market to pull back before entering into them. If the market does run on Monday I would not chase these positions as a pullback will still happen. I would wait on the short positions until the market makes a move for the bear side. As of right now that move is far from happening.
Good luck with the upcoming week…