31 July: Forecast: Stock Indices, Commodities

By | July 31, 2017


S&P: 2470
24 Hour: Neutral Medium Term: Neutral
Although the DJI made a new all-time high on Friday, the S+P was unable to keep up and stayed within the range below last week’s 2480 high.

As before, with the daily momentum indicators still pointing higher, further gains would seem possible in the days ahead although the short term charts are looking a little mixed on Monday so some caution is warranted and progress, if any, may be slow. Another rangebound session would not surprise.

As before, I prefer to remain sidelined at these levels.

Preferred Strategy: Neutral

Resistance Support
2490 Minor 2461 Friday low
2485 Minor 2456 27 July low
2480 Minor 2457 19 July low
2480 27 July high  -All-time high 2447 18 July low/(23.6% of 2345/2475)
2471 Friday high 2435 Minor

DJI: 21778
24 Hour: Neutral Medium Term: Neutral
The DJI reached a new all time high on Friday of 21782 (21682/21782) and closed right at the peak, suggesting that the trend will continue although some caution is warranted as the S+P will need to play catch-up in order to do so. With the momentum indicators generally looking constructive though, a move towards 22000 does seem likely. Stops should be laced tight below the trend support, currently at 21525

Preferred Strategy: Neutral

Resistance Support
22000 Minor 21682 Friday low
21900 Minor 21631 27 July low
21850 Minor 21518/25 25 July low /Rising trend support
21800 Minor 21435 (23.6% of 20474/21732)
21782 Friday high   – all-time high 21350 Minor

ASX SPI: 5656
24 Hour: Neutral Medium Term: Neutral
The ASX fell back from above 5700, to the 200 DMA on Friday, closing just above the 5630 low, at 5655.

As we said before, the momentum indicators still look pretty neutral and the chart looks a complete mess (unless you are a mean reversion trader, in which case it is fantastic!) so I would not be too involved right now. More of the same looks likely.

Preferred Strategy: Neutral

Resistance Support
5765 100 DMA 5640 200 DMA
5747 4 July high 5630 Friday low
5707 Friday high 5610 Minor
5690 Minor 5592 24 July low/(38.2% of 5029/5944)
5675 200 HMA 5550 Minor

XAUUSD: 1269
24 Hour: Prefer to buy dips Medium Term: Mildly Bullish
Gold again took advantage of the weak US$ on Friday and has taken out some resistance levels in heading up to 1270, where it closed the week.

As before, the daily momentum indicators point higher, and we could now see a run towards 1275/80 which should see good selling interest, but above which would open the way to the previous, June, high of 1296.

On the downside, the initial support now lies at 1260 (minor) ahead of the rising trend support at 1250 and then at 1243/45 and again at 1230/35, which should be strong although looking increasingly distant.

Preferred Strategy: Looking to buy at around 1260, with a SL placed under 1250 or even 1240 would seem to be the plan, looking for a run towards 1290/95, although 1280 may be tough to take out so some caution is needed. Also note that Silver did not follow Gold to new trend highs and may be trying to tell us something.

Resistance Support
1296 6 June high 1260 Minor
1290 Minor 1257/54 Friday low/(23.6% of 1205/1270)
1280 Descending trend resistance /14 June high 1250 Rising trend support
1275 (76.4% of 1295/1208) 1245/43 (38.2% of 1205/1270)26 July low
1270 Friday high 1237 (50% of 1205/1270)

XAGUSD: 16.72
24 Hour: Neutral – Prefer to buy dips? Medium Term: Prefer to buy dips
Silver remained below the trend high of the previous day and traded a range of 16.52/75 on Friday.

With the dailies pointing mildly higher, if 16.70/75 can be taken out we could be in for a run towards 16.90/17.05 although not yet I suspect, and much will depend on the dollar.

Having failed to make a new high on Friday, the short term momentum indicators look a little less constructive, and on the downside the initial, minor support arrives at 16.45/55 and a break of this could quickly lead back below 16.25/30 towards 16.05/10, and then below 16.00, to 15.85/95.

Preferred Strategy: Prefer to buy dips while above 16.50 but with a tight stop loss placed under 16.45, but looking for a run towards 16.90/17.00.

Resistance Support
17.08 15 June high/100 DMA 16.52/55 Friday low /Rising trend support
17.00 200 DMA 16.45 (23.6% of 15.18/16.81)
16.90 (50% of 18.65/15.18)/29 June high 16.30 26 July low
16.85 27 July high 16.25 25 July low
16.75 (61.8% pivot of 16.75/15.18)/Friday high 16.20 (38.2% of 15.18/16.81)

WTI: 49.77
24 Hour: Prefer to buy dips Medium Term: Prefer to buy dips
WTI settled higher on Friday, with data this week easing concerns about surplus supplies after Saudi Arabia pledged to lower exports, while U.S. crude supplies fell more than expected. WTI reached a peak of 49.78 on Friday and 50.00/20 does not now look too far away. Beyond the Fibo level at 50.20, there is very little to stop the price climbing quickly to 51.00, and beyond there to the next Fibo level and previous trend high at 52.00.

On the downside, support now lies at the 200 DMA (49.40), below which could see a run back towards Friday’s low at 48.84 and then possibly to 48.00 although that now looks rather distant.

Preferred Strategy: For Monday, I prefer to buy dips towards the 200 DMA (49.40), with a SL placed below 48.80, but looking for a run towards 51.00.

Resistance Support
51.97/52.05 25 May high/(76.4% of 55.21/42.03) 49.40 200 DMA
51.00 Minor 48.84 Friday low
50.20 (61.8% of 55.21/42.03) 48.23 27 July low
50.00 Psychological 47.85/92 26 July low /100 DMA /(23.6% of 42.02/49.21)
49.78 Friday high 47.30 Minor