Weekly Outlook: 2014, September 28 - October 05

CAC forecast for the week of September 29, 2014, Technical Analysis

The Parisian index fell during the course of the week, but found the 4350 level to be supportive enough to turn things back around and form a nice-looking hammer. The hammer of course suggests that the market is going to go higher, and as a result we believe that we will test the €4500 level for resistance yet again. With this, we are bullish of this market, and will continue to buy pullbacks as they appear on the short-term charts as well. We believe ultimately that the Parisian index will go to the €4600 level again.

S&P 500 forecast for the week of September 29, 2014, Technical Analysis

The S&P 500 fell during most of the week, but as you can see bounced enough to form a little bit of a hammer like candle. The 1980 level looks as if it’s going to continue to send buying pressure into the marketplace, thereby giving the buyers the upper hand going forward as we expect. The 2020 level been broken to the upside of course is a very bullish sign, just as a supportive candle in this general vicinity would be. We have no interest whatsoever in selling this marketplace.

Dow Jones 30 forecast for the week of September 29, 2014, Technical Analysis

The Dow Jones 30 as you can see fell during the majority of the week, but found enough support near the 17,000 level again to form a hammer. Because of this, we believe that the Dow Jones 30 is going to continue going higher, and a break above the 17,300 level would be a sign that the market is ready to continue the long trend higher. However, we think there is plenty of support below, so even a pullback doesn’t dissuade us from being positive of this very bullish market.

Silver forecast for the week of September 29, 2014, Technical Analysis

Summer markets fell during the bulk of the week, but found enough support near the $17.50 level to bounce and form a little bit of a hammer for the week. However, we think that we have broken down through significant support, and any bounce from here is more than likely going to end up being a selling opportunity. With that, we are still bearish of the summer market and have no interest in buying. In fact, the other signal for us would be a break down below the bottom of the hammer, which of core show significant weakness.

Gold forecast for the week of September 29, 2014, Technical Analysis

The gold markets tried to rally during the course of the week, but as you can see fell down almost immediately. The resulting candle is a shooting star, which of course is very negative looking at the bottom of a downtrend. Where the very bottom of the consolidation that we had seen down in this general vicinity, and as a result it looks like we are going to try to make an attempt to break down below the $1200 level. If we get that move, this market could go as low as $1000. If we break above the $1250 level, at that point time we think the market would then head to the $1350 level as it would continue the consolidation that we’ve seen for some time now.

However, gold markets are very sensitive to the value the US dollar, which of course is continuing to gain serious strengthen overall. With that, gold markets probably are going to break down, and a move below $1200 would be a big surprise at all. The gold markets continue to suffer as the US dollar is being bought because of the lack of economic growth around the world, ultimately making it the only asset that a lot of traders will hold onto.

If we do break the top of the shooting star though, we feel that the market will try to pick up steam and although we are calling for a move to the $1350 level, we recognize that we could go as high as $1400 as well. With that being the case, we recognize that a decent trades set up is coming, but we need to break out of the candle from the previous week in order to feel comfortable enough to put any real money into this marketplace.

We also recognize that sooner or later we will find support, probably closer to the $1000 level, and that being the case we would be very interested in going long of gold down in that region if we get a supportive candle for a longer-term trade. However, right now things simply look to soft.

USD/CAD forecast for the week of September 29, 2014, Technical Analysis

The USD/CAD pair broke higher during the course of the week, slicing through the 1.10 level yet again. In fact, we closed at roughly 1.1150, which means that we are starting to dig into the resistance and heading towards the 1.12 handle. Because of this, we feel that the market will ultimately his that level, and then break above there in order to start offering more longer-term trades. We think that pullbacks continue to offer value, and will find them time and time again. We have no plans whatsoever on selling.

USD/JPY forecast for the week of September 29, 2014, Technical Analysis

The USD/JPY pair initially fell during the course of the week, but found enough support near the 108 level to turn things back around and form a hammer at the top of a very strong move. Because of this, it appears that the market is ready to continue going higher, but we do recognize of the 110 level just above is going to be resistive. Because of this, we are bit hesitant to start buying but recognize that a daily close above the 110 level is probably enough of a reason to start buying this market yet again, as it most certainly cannot be sold at this point in time.

Truth be told, the 105 region with much more resistant than the 110 region is on the longer-term charts, so it would not surprise us at all if we continue going higher. We won’t lie though, we would prefer to see a pullback in order to collect more buyers going forward as a US dollar should continue to gain against the Japanese yen overall. After all, the two central banks are completely diametrically opposed when it comes to monetary policy, and as a result this should be a “one-way bet” given enough time.

The market has a massive floor and it down at the 105 level even if we do pullback, and all that would do is have us buying aggressively at that point in time on supportive candles. We see no reason to think that this market is going to break down now, and even if we get something like a shooting star at the 110 level, we are not interested in selling, we just look at it as a sign that the market was ready to take a little bit of a break. Because of that, we are simply not interested in selling whatsoever, as the markets have no sign of pulling back for any real length of time. Ultimately, we think that this market will continue to go higher over the next several years, and that the long-term trend has started.

NZD/USD forecast for the week of September 29, 2014, Technical Analysis

The NZD/USD pair fell off of a cliff during the week, slicing through the 0.80 handle with relative ease. Because of that, it appears of the market should continue to drop down to the 0.76 handle first, and then ultimately the 0.75 level which of course is a large, round, psychologically significant number. Keep in mind that the commodity markets most certainly are not helping the New Zealand dollar, so with that it’s likely that the Kiwi dollar will continue to lose value over time. We have no plans whatsoever in buying.

GBP/USD forecast for the week of September 29, 2014, Technical Analysis

The GBP/USD pair initially tried to rally during the course of the week, but then turned back around to fall and close near the 1.6250 region. The hammer just below from two weeks ago of course should provide plenty of support though, so we feel that this market will more than likely continue to grind sideways in this region a for finally making its move. That being said though, at this point in time we favor the upside in this market based upon the technical factors on this chart such as the hammer from the 50% Fibonacci retracement level.

EUR/USD forecast for the week of September 29, 2014, Technical Analysis

The EUR/USD pair initially tried to rally during the week, but as you can see ended up falling and slicing through the 1.28 level like it wasn’t even there. Because of this, we believe that the euro continues to offer selling opportunities on rallies, but at this point in time we think that the market is probably aiming for the 1.25 handle. Be aware though, this is a market that is certainly oversold by any stretch of imagination and a snapback rally could happen at any point. Ultimately though, we have no plans on buying.