Weekly Outlook: 2014, April 20 - 27

MIB forecast for the week of April 21, 2014, Technical Analysis

The MIB initially fell during the week, finding the 20,800 level as support. The support area was strong enough to push market higher, as we closed that the 21,613 level. The market looks like it’s ready to continue going higher, and the trend is most certainly strong at this moment. With that, we are bullish, and have absolutely no interest in selling regardless. Any pullback at this point in time is going to be a buying opportunity as far as we are concerned, and we will treat it as such.

IBEX forecast for the week of April 21, 2014, Technical Analysis

The IBEX initially fell during the week, but found a significant amount of support at the €10,000 level, to turn back around and go much higher. We closed just above the €10,290 level, which of course is a very bullish sign. We believe that a break above the top of the candle for the week is a sign that the market is going to continue going higher. After all, looking at the trend that we have been in for some time, it’s obvious that the IBEX is ready to continue going much higher. Simply put, the trend is very much intact.

The IBEX is a destination that a lot of “hot money” finds itself heading towards when Europe is being invested in. As the European markets go, the IBEX will go, especially as people were looking for more stringent returns. With that, we are very positive of this market in general, and recognize that as long as the markets can remain somewhat stable around the world, the IBEX should continue to grind higher.

The IBEX will first target the €10,700 level, and then above there probably continue to go towards the €15,000 level given enough time. However, there will be pullbacks in time to time as we grind higher, not necessarily shoot straight up. This grind will have plenty of pullbacks that will have people stepping into the marketplace over and over again. With that, there will not only be long-term opportunities, but also short-term opportunities. However, regardless of whether or not you are looking at trading short or long-term, only direction that we are interested in trading is up, and certainly not down.

All things being equal, we feel that this market will offer more and more trading opportunities for longer-term investors more than shorter-term though, simply because this is more of an investment than some type of higher frequency trading. There is no opportunity to sell as far as we can see, at least until you get below the €9300 level. That being the case, we are bullish only.

CAC forecast for the weekend of April 21, 2014, Technical Analysis

The CAC as you can see initially fell during the week, but found enough support to go much higher during the week. We closed well above the €4400 level, and because of that we think that the market looks very bullish at this moment and that we should start heading to the €4500 level in the short term, with that being an area that if we can break above, we feel that this market goes much higher, eventually the €5000 level. We have no interest in selling this market at the moment, I believe the pullbacks will be buying opportunities.

S&P 500 forecast for the week of April 21, 2014, Technical Analysis

The S&P 500 rose during the bulk of the week, but of course was closed on Friday for the Good Friday holiday. However, looks like we are approaching a significant barrier of resistance, so it’s going to be difficult to trade this market at the moment. We need to break above the 1900 level in order to feel comfortable holding onto a longer-term trade, and at that point time we believe that the market heads to the 2000 level, and possibly higher than that given enough time. Selling is not what we are looking to do at the moment.

FTSE forecast for the week of April 21, 2014, Technical Analysis

The FTSE as you can see initially fell during the week, bouncing off of the 6500 level and forming a hammer. The hammer of course suggests that buyers are going to step back into the marketplace, and as a result we think that the market will initially head towards the 6700 level, and then beyond their to the 6850 level. With that, we are bullish but recognize that it won’t necessarily be a straight shot higher. However, on a break of the highs from the past week, we are comfortable going long.

Dow Jones 30 forecast for the week of April 21, 2014, Technical Analysis

The Dow Jones 30 rose during the bulk of the week, closing of the top of the range that we have been stuck in for some time now. Because of this, we feel that the market should continue to go higher eventually, the question is whether or not we can do it now. Break in the top of the shooting star from a couple of weeks ago would in fact be a very positive sign, and at that point time we would not hesitate to go long of this market. After all, we have been in a nice uptrend for some time now, and as a result we see no reason for this change.

We do recognize the fact that the 16,600 level is overly resistive, and that the market breaking above there would in fact be a very significant event. That significant event could send this market to the 17,000 level in relatively short order, and then possibly much higher than that. After all, the slope of the uptrend has been very gentle, which shows a real underlying strength and lack of any type of panic when we do sell off.

Any pullback at this point time should be a nice buying opportunities far as we can tell, and we think that 16,000 is indeed the “floor” at the moment. But even if we break down through their we recognize the fact that the 15,500 level is rather supportive as well, and with that we are buyers on support candles all the way down to that level. We still believe that a break in the top of that shooting star from a couple of weeks back would be a massive buying opportunity as it would show that the buyers are finally broke through the barriers. The real question is whether or not we can do that in the next week or two, as it’s difficult to understand at the moment. Nonetheless though, long-term it certainly seems that we are destined to go much higher and continue the uptrend.

US Dollar Index forecast for the week of April 21, 2014, Technical Analysis

The US Dollar Index rose during the course of the week, but still remains below the 80 level, which shows that although we are trying to form a little bit of a base, we have some work to do. We believe that this market heads to the 81.25 level in the short term, and that above there will head to the 84 level given enough time. We are bullish of this market, NCB 79 level as the “floor” that this market has to break down through in order to get bearish.

Silver forecast for the week of April 21, 2014, Technical Analysis

Silver markets fell during the bulk of the week, but found enough support at the lows in order to bounce back over the $19.50 level. On these longer-term charts, we feel that the $19 level is support, and it’s not until we get below there that we consider selling. In fact, but candle for the week is somewhat hammer like. Because of that we feel that the summer market may bounce from here and continue the sideways consolidation that we have seen for some time now. We believe that the $19 level is the bottom of the consolidation area, and therefore a bounce from there is expected.

Crude Oil forecast for the week of April 21, 2014, Technical Analysis

The light sweet crude market ended going higher during the week, as we touched the $105 level. That area offered enough resistance to turn things back around though, so although we did not necessarily form a shooting star, it does in fact appear that the market is ready to pull back slightly. With that, we are willing to buy supportive candles, and as a result we feel that the hammer or other types of bullish candle should be bought below, especially as we get close to the $102 level, which should be rather supportive based upon the cluster. Because of this, we think that ultimately the market will go higher, and we also recognize that the $105 level would be the gateway to go much higher as well. If we can get above there, there’s no reason to think of this market will head to the $110 level in relatively short order.

Brent

The Brent market had a much more bullish move during the week, as we spent most of the week going higher. The $110 level did of course offer resistance though, but it’s a large, round, psychologically significant number, and as a result we feel that the pullback that could be coming from here is probably healthy. After all, we need to build up enough momentum to breakout to the upside, which is a bit sloppy in its resistance.

If we can get above the $111.50 level, we feel that this market will eventually go higher, probably to the $115 level given enough time. We think ultimately that will happen, but as a result one will have to be very cautious and patient when dealing with this particular move as the noise above will of course make this to be a little bit of a difficult move. We see no reason whatsoever to sell this market until we get well below the $104 level, which is something that we don’t necessarily see anytime soon as the market has been so bullish over the last several months.

Natural Gas forecast for the weekend of April 21, 2014, Technical Analysis

The natural gas markets fell initially during the week, but found enough support to turn things back around and shoot much higher. In fact, most of the gains were on Thursday as natural gas demand continues to accelerate, and it now appears that the five dollars level will be attacked given enough time. However, we recognize that there is some resistance just about, so it will be difficult to hang onto the straight. Ultimately, we do think of the natural gas market could fall rather drastically, but it does not appear like that’s going to happen anytime soon.