Weekly Outlook: 2014 - 2024

Ibex forecast for the week of October 27, 2014, Technical Analysis

The Ibex broke higher during the course of the week in order to clear the €10,300 level, and more importantly the hammer from the previous week. That being the case, we feel that the market should continue to go much higher, probably aiming for the €11,200 level, which of course was the recent high that we have had twice. Because of this, we believe that we will head to that area and then eventually break out above it. We have no interest in selling this market as it does in fact look bullish at this point.

CAC forecast for the week of October 27, 2014, Technical Analysis

The Parisian index initially dipped lower at the open during the week, but the €4000 level turned back around the bearish pressure and send the market much higher. With that, we closed above the top of the hammer from the previous week, thereby sending a longer-term buy signal into the marketplace. With that, we feel that this market will then head to the €4500 level, and should continue to attract traders all the way out. Recognize that there will be a little bit of bumping us on the way higher, but ultimately that is the signal.

S&P 500 forecast for the week of October 27, 2014, Technical Analysis

The S&P 500 broke higher during the course of the week, clearing the top of the hammer from the previous week, sending this market well above the 1950 level, and now looking to get as high as the 2000 handle in the short-term, and probably much higher than that given enough time. Pullbacks at this point time should continue to be buying opportunities as is market should continue to attract buyers every time we get perceived value. Ultimately, we think that the market does break out to the upside and it does continue to go much higher.

FTSE forecast for the week of October 27, 2014, Technical Analysis

The FTSE as you can see initially fell during the course of the week, but found enough support at the 6225 level to turn things back around and form a positive candle. We did in fact break the top of the hammer from the previous week, so we believe that the FTSE will continue to grind higher given enough time. We like buying the FTSE, but we recognize that it’s probably going to be a very volatile move higher, as there is a lot of noise above. Nonetheless, we don’t see any opportunities for selling.

Dow Jones 30 forecast for the week of October 27, 2014, Technical Analysis

The Dow Jones 30 broke higher during the course of the week, clearing the top of a hammer that had formed on the previous week. Because of this, the markets look as if they are ready to go much higher, and most certainly the buyers are in control yet again that being the case, we feel that this market will have positive momentum going forward and as a result we are buyers. We have no way of selling this market as it obviously has a massive amount of support just below.

US Dollar Index forecast for the week of October 27, 2014, Technical Analysis

The US Dollar Index fell initially during the course of the week, testing the 85 level for support. With that being the case, we ended up bouncing enough to form a hammer and it suggests that the market is in fact going to continue going higher, perhaps testing the 90 level given enough time. With that being the case, we feel that the market can be bought on dips, and simply cannot be sold anytime soon as the US dollar continues to be the favored currency by Forex traders.

Silver forecast for the week of October 27, 2014, Technical Analysis

The silver markets tried to rally during the course of the previous week, as the $18 level continues to offer significant resistance. That resistance ended up forming a shooting star, which of course is a very bearish sign. Silver markets are essentially broken at this point in time, and we do fully anticipate a move down to the $15 level. We have no interest whatsoever in buying silver at the moment, as we believe the sellers will continue to push this market much lower given enough time. Ultimately, we believe the value the US dollar continues to work against precious metals.

Crude Oil forecast for the week of October 27, 2014, Technical Analysis

Light Sweet Crude

Believe sweet crude market fell during the course of the week, as we continue to see quite a bit of bearish pressure in this marketplace. That being the case, it’s obvious for us that the US dollar will continue to drive this market lower. However, the $80 level below is rather supportive, and a large, round, psychologically significant number. That of course is a barrier that we will have to contend with, but there is nothing on this chart that doesn’t suggest it’s possible.

If we bounce from here, we think that the sellers will step back in and push this market down as well, so therefore we have no interest in buying at this point in time because any bounce will more than likely just be a bit of a “dead cat bounce”, meaning that the sellers will almost certainly step in and reassert their control.

Brent

Brent markets went back and forth during the course of the week as well, but ended up forming something along the lines of a hammer. Because of this, we could get a little bit of a bounce but let’s be honest here: the market is oversold at this point in time, so that would be a huge surprise at this point in time with the sellers being so aggressive recently.

At the end of the day though, we believe that the next major support level is closer to the $80 level, so any bounce from here will more than likely just bring in more sellers as people will look at it as an opportunity to get involved in the market yet again. That being the case though, you can see that we have broken down significantly over the last several months, so the move has been a bit aggressive and more than likely will struggle to continue with the same tenacity that it has seen. With that, we believe that waiting for a bounce that show signs of resistance or failure will be the way to go going forward.

Natural Gas forecast for the week of October 27, 2014, Technical Analysis

Natural gas markets had a significant breakdown this week, breaking below the recent support and testing the $3.60 level. This area of course is below the most recent low, and with that we feel that the market will more than likely test the $3.50 level, a much more significant supportive level. With that, we are bearish and would sell rallies at this point time as the natural gas markets continue to come undone. We see no scenario in which we are buyers, as natural gas markets have simply lost all upward momentum.

Gold forecast for the week of October 27, 2014, Technical Analysis

The gold markets tried to rally during the course of the week, but as you can see the $1250 level offered enough resistance to turn the market back around, and formed a shooting star. The shooting star is a very negative sign, and as a result it appears of this market is ready to continue grinding lower. We have to get to a fresh, new low before we feel that the market can really start to fall with any significant momentum, but at this point time you have to favor selling gold as opposed to owning it. After all, the US dollar continues to strengthen overall, and that of course works against the value of precious metals in general.

The shape of the candle is perfect, and it is at the exact place you would want to see it if you are bearish. Because of that, it’s only a matter of time in our opinion before this market rates down and starts to really selloff. Once the $1200 level is firmly in our rearview mirror, it’s very likely that we will then head down to the $1000 level, which of course is the next large, round, psychologically significant number. With that being the case, it’s probably going to be very likely that we would fall away down there in order to try to find buyers.

The $1000 level as you can see on longer-term charts is one that is a very significant area historically, and as a result it would make a lot of sense if we had a lot of buying pressure in that general vicinity, but at this point in time, there’s no signs that the buyers are going to step into the market and push prices higher. This will be especially true as long as a US Dollar Index continues to rise, which of course was very bullish of the moment. With that, we believe that there is a longer-term buying opportunity in the gold markets coming, but we are nowhere near it at the moment.