Weekly Outlook: 2014, April 13 - 20

MIB forecast for the week of April 14, 2014, Technical Analysis

The MIB as you can see fell hard during the week, bouncing off of the 21,000 level as support. This area would attract buyers in our opinion, just as we would expect to see support all the way down to the 20,000 level. Any supportive weekly candle is reason enough to start buying as far as we can tell, and as a result we will do exactly that. We are not willing to sell this market though, even though it is a bit on the parabolic side and the pullback could be rather vicious.

IBEX forecast for the week of April 14, 2014, Technical Analysis

The IBEX as you can see fell during the bulk of the week, finding the €10,100 level supportive. That being the case, the market looks as if we could find support in this general vicinity, especially considering the €10,000 level is a large, round, psychologically significant number. That being the case, we are looking for supportive candle in order to start buying as the IBEX of course is a massive uptrend. We see no reason for that the change anytime soon, and as a result we feel that you can only buy this market.

CAC forecast for the week of April 14, 2014, Technical Analysis

The Parisian index fell during the course of the week, finding the €4300 level as support. That is an area that we would expect to see some support in, and as a result we are looking for supportive candle in order to start buying. We would do that from the daily or weekly chart, as the market is most certainly and an uptrend. That uptrend should continue to attract buyers, and as a result we feel that selling just is not going to be possible in this market at this time.

S&P 500 forecast for the week of April 14, 2014, Technical Analysis

The S&P 500 fell during the course of the week, breaking the bottom of the shooting star from the previous week. This of course is a very negative sign, but as you can see the market has plenty of support down near the 1780 area. Down in that general vicinity we would expect to see support, and then would start buying on that type of candle in that particular area. This signal could come on the daily chart though, but at the end of the day we believe that ultimately this market should continue to go higher.3

FTSE forecast for the week of April 14, 2014, Technical Analysis

The FTSE fell hard during the week as you can see, closing towards the very lows of the range. However, it appears that the market has quite a bit of support just below, especially near the 6500 level. Because of this, we are not ready to sell this market, but we certainly don’t want to step into this market until we get a supportive candle near this area, at least on the daily chart. Because of that, it appears that we will eventually be buying, but we will be patient.

Dow Jones 30 forecast for the week of April 14, 2014, Technical Analysis

The Dow Jones 30 as you can see fell hard during the week, slamming into the 16,000 region. We are still well within consolidation though, and as a result we think that there’s plenty of support just below in order to keep this market higher. We would not sell this market right now, and as a result we are looking for some type of supportive candle in order to start buying. Ultimately, we think that this market continues higher and breaking above the recent high would of course be given the next leg up.

US Dollar Index forecast for the week of April 14, 2014, Technical Analysis

The US Dollar Index fell during the course of the week, but remains above the 79 handle. The 79 handle of course is supportive, and what we believe is a major inflection point. We believe that this market will be dictated by what happens at the 79 handle, so this of course makes this next week or two very important when it comes to the value of the US dollar going forward.

We would absolutely love to buy a supportive candle in this general vicinity, but will have to remain very patient to see what happens. A daily candle could work, but it would be even better if we saw some type of supportive candle on the weekly chart. Nonetheless, we do recognize the 79 is an area where the market essentially “flips”, meaning that is a massive area that the market respects and deals with time and time again. However, you can see that since the beginning of 2012, the market has found the area to be very supportive, and that means that it makes sense that we would continue to bounce from this area.

Top of that, you can also make an argument for consolidation between this area and the 81.25 level, as we have seen in the last six months proved to be relatively tight. With that, we most certainly have an upward bias at this point, but recognize that a breakdown below the 79 handle would in fact be very significant. On that move, we would expect this market to drop all the way down to the 75 handle, but it would take some time. 78 would of course offer support as well, but it is much more of a minor area than the 79 is as we continue to see the market bounce from his handle. If we can break above the 81.25 handle, we feel that this market will go to the 84 level, given enough time in order to see the bulls continue to take control of a market that they’ve had a strong presence in.

Silver forecast for the week of April 14, 2014, Technical Analysis

The silver markets as you can see went back and forth during the course of the week, essentially doing nothing. The $20 level just above is significant resistance, and as a result we feel that the market will probably still tread water in this general vicinity. However, we think that the market is essentially trying to form some type of a bottom now, and as a result we should go to the $22 level. A break of the top of the weekly range is reason enough to start buying in our opinion. We have no interest in selling until we get below the $19 level.

Crude Oil forecast for the week of April 14, 2014, Technical Analysis

The light sweet crude markets rose during the week after initially falling down towards the $100 level. The $100 level of course offered enough support to cause the market to bounce and test the 104.50 level, an area that has been resistance previously. Because of this, we feel that the market will more than likely continue to have bullish momentum, and a pullback here should offer a nice buying opportunity. On the other hand, if we break above the 104.50 level right away, we feel that the market would the $105 level, and then ultimately the $110 level. We are bullish of this market longer term anyway, and believe that there is a significant amount of support down to the $100 level without a doubt. It is down in that area that we feel that the most buying pressure would reenter the market, as it would become more of a longer-term bullish move.

Brent

The Brent markets had a back and forth week as well, but testing the $105 level for support significantly, and thereby made a serious attempt to break down. The fact that we could not do so of course makes us more bullish, and we realize that the market heads to the $108 level and find resistance there as well. We need to get over the $108.50 level in order to get overly bullish, and at that point time we feel that the market would head to the $111 area. In that general vicinity, we expect to see a significant amount of resistance, but ultimately believe that the market will break through that barrier. Once that happens, all bets are off and we would suspect Brent would head to the $115 level as it is the next natural large, round, psychologically significant number on the chart. Don’t get us wrong, it’s not that we expect this market to be bullish in a straight line, just that overall and over time, the buyers should win out. Selling therefore isn’t something that we are interested in, at least until we get below the $104 level.

Natural Gas forecast for the week of April 14, 2014, Technical Analysis

The natural gas markets rose during the course of the week, breaking above the $4.60 handle. That being the case, the market looks as if it is ready to continue going higher, but the question then becomes whether or not we can make a fresh new high. If we can get above there, then the market should continue to go higher. However, if we fail to break above that you will see this market pulled back down. It is a bit disconcerting that the market has shot straight up and hasn’t pulled back significantly yet. Because of that we are suspicious.