Gold is trading at 1169 resistance

October 12, 2015 Forex Analysis

Gold is trading at 1169 resistance

Gold, Weekly
In my previous report I took the view that the price of gold has scope to move somewhat higher – even up to 1200 – 1232 range. I also wrote that we should see some bottoming action above the 1097 support and that could correct lower from the levels current at the time of the report. I said that if 1135 level breaks the next significant daily support level is in 1098 -1112 bracket. All this played out well. Price moved lower and after a wild swing higher moved to a support range I mentioned. After printing a weekly bar low at 1103 price has had a significant rally from this support range.

After creating two higher weekly lows the price of gold last week broke through and is now trading outside of medium term bearish channel. The width of the channel points almost exactly to the upper end of the long term bear channel at approx. 1260. This level roughly coincides with the 23.6% Fibonacci level at 1252. Gold is currently trading near 61.8% Fibonacci level and a previous support (now a resistance). At the same time Stochastics has moved right at the threshold of overbought territory. Price is getting close to the 50 week moving average while the upper Bollinger Bands are not very far from the current market price. The nearest resistance is at a pivotal weekly high at 1169 while nearest major weekly support is at 1103.

Gold, Daily

Price is trading near a resistance area between 1169 and 1187 created by a previous sideways move. While moving averages (30 and 50 SMA) indicate the short term trend is higher Stochastics is overbought while price is trading above the upper 2 standard deviation Bollinger Bands. The nearest potential support is at 1152 – 1154 region while the resistance area is wider, from 1169 to 1187. Since August the price of gold has formed a triangular formation and a projection from the triangle points to 1221 – 1232 resistance range.

Gold, 240 min

Price is trading near 1169 resistance and right at the top of a regression channel while Stochastics are in the overbought zone and moving sideways. This is a sign of momentum slowing down. At the same time price is trading outside the upper Bollinger Bands. Previous pivotal candle high at 1170 is very near to the current market price. The nearest 4h hour support level is at 1158.50 while the area between 1135 and 1143 is support range. Should this not hold, the next support range at 1104 – 1112 comes into play.

Conclusion

The higher lows in the weekly chart point to higher prices but there are several technical factors likely to slow the price down. Historical resistance at current levels, together with the proximity of 50 week SMA and the upper Bollinger Bands that coincide with 50% Fibonacci retracement are a challenge for the bulls. I expect this combination to turn the price of gold down to 1104 – 1125 support range. The 4h support range at 1104 – 1112 is a likely level to cause a rally should the price correct that far. Look for momentum reversal signals in the lower timeframes to confirm the analysis for both longs and shorts.

Janne Muta

Chief Market Analyst

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jmuta Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.

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EUR rallies as US Jobs report disappointed

October 2, 2015 Forex Analysis

US nonfarm payrolls rose 142k in September, with the jobless rate at 5.1%. August’s 173k job gain was bumped down to 136k, with July’s 245k now 223k, for a net -59k revision. Average hourly earnings were unchanged from a 0.4% increase previously (revised from 0.3%). The workweek slipped to 34.5 from 34.6. The labor force dropped 350k, with household employment down 236k. The labor force participation rate fell to 62.4% from 62.6%. Private payrolls increased only 118k (versus ADP’s +200k) with the goods sector seeing a 13k decline, with manufacturing falling 9k, while construction was up 8k. The service sector climbed 131k, supported by leisure, hospitality’s 35k gain.

EUR pairs are up across the board. EURUSD shot up to 1.1296 resistance while the next daily resistance level is at 1.1463. Nearest intraday resistance levels are at 1.1330 and 1.1388. The 50 week simple moving average is currently at 1.1405 and coincides with the upper Bollinger Bands. Gold rallied strongly at the announcement and is trading right below 1136 resistance.

Janne Muta

Chief Market Analyst

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AUDUSD at support while markets prepare for NFP Friday

September 28, 2015 Forex Analysis

AUDUSD, Weekly

Slowdown in the Chinese economy is pictured well in the AUDUSD weekly chart. The downtrend started roughly at the same time as copper, peaking in 2010, and has continued ever since with the declining copper prices. Speculators bought massive amounts of copper while the Chinese economy was still expected to keep on growing. Since then the Chinese authorities have been steering the economy away from investment and export lead growth into an economic model that relies more on domestic consumption. This transition, however, will take time and does not benefit metal producers such as Australia as much as government investment driven growth, which means that money is not pouring into raw material intensive infrastructure projects.

We are living in the time of deleveraging and the excess supplies are being worked out. Therefore prices are likely to stay low for the foreseeable future. The latest move lower from a resistance (identified in Sept. 18^th Currency Movers report) wasn’t a surprise but was rather pretty much in line with this development.

This week’s two important fundamental events are Chinese Caixin PMI on Thursday and the US Non-Farm Payrolls on Friday. The latter obviously moves the Fed due to the employment being half the Fed’s mandate together with the price stability. The former though is something new for the Fed to consider but since the latest comments by the Fed Chair Yellen it has been evident that the central bank is taking this globally significant economy into consideration in their policy.

AUDUSD, Daily

The pair rallied from current levels to where several technical factors came together and caused the price to turn lower again (a pivotal low at 0.7213 coincided with 50 day SMA and the upper Bollinger Bands). Price eventually formed two shooting star candles after which the original momentum resumed. Then I wrote in Sept. 24^th Currency Movers report that: AUDUSD is approaching daily Bollinger bands and support which indicates that it is time to close the shorts opened after the shooting stars were formed. This worked perfectly as the pair bounced from my support of 0.6950 after briefly moving below it.

Since returning to lower Bollinger Bands price has created a bullish pin bar but there has been no follow through. The pair has moved sideways inside the pin bar range since the Asian session on Friday. Stochastics are oversold and price moves near the regression line. Thursday’s pin bar low coincided with the 1.5 standard deviation lower Bollinger Band. The nearest support levels are at 0.6904 and 0.6941 while the nearest daily resistance level is at 0.7140. In addition, the weekly low value from last week is at 0.7063, only 20 pips above the 0.7043.

AUDUSD, 240 min

The intraday picture suggests indecision. Price is trading sideways without major attempts to move to either direction. The upside has been limited by a resistance at 0.7026 while the lower end was rising. This created a triangle that points to the 0.6938 – 0.6966 support bracket. The rising lower end is now broken while the Stochastics are rolling over and support the view of AUDUSD moving lower and retesting the support. However, at the time of writing the pair has attracted some buying at 4h Bollinger Bands.

Conclusion

The fundamental picture gives no reason to turn bullish on commodities or commodity currencies, and market participants wait for the Chinese PMI figure and the US NFP number to get further clarification on fundamentals. The economic growth in China has been trending lower. It is therefore likely that the trend will prevail until there are signs of a turn around. This applies to the long term trend in AUDUSD as well. However, based on the monthly chart the pair is now at the upper end of a potential turn around level, level that turned the price higher in 2009. Short term price is fluctuating above a support at 0.6938 – 0.6966 and a resistance at 0.7026. There should be intraday trading opportunities in side this band. If price moves below 0.6904 and there is no fast rally higher I expect the price to move beyond the latest lows. In the case of market rallying strongly from proximity of the low, the resistance bracket between 0.7138 – 0.7277 is likely to come into play.

Janne Muta

Chief Market Analyst

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GOLD TRADING AT DAILY RESISTANCE AFTER A HIGHER WEEKLY LOW

September 21, 2015 Forex Analysis

Gold, Weekly

Gold created a higher low in the weekly chart at levels where the downside was getting limited. I wrote in the previous report that after moving lower for three weeks it is not likely that price will have another significant down move and added that the Fed’s not expected to hike rates (only 28% probability for September rate hike). And furthermore, gold was trading relatively near levels that attracted buyers the last time. Now, whenever a market can’t move lower the probabilities of it moving up are higher. Gold rallied over the last three days with the market’s anticipating Fed’s decision to leave the rates untouched.

After last week’s close was decisively higher than the previous week’s high we now have a higher pivotal low in place. This is an early indication that the market might be attempting to rally from here. In terms of the long term down trend the price of gold has lately been close to the lower end of its likely range. Together with the higher low this suggests that we might see a corrective move inside the long term downtrend. For this to happen we should see some base building first. This would mean price reacting lower and testing the support again or creating another higher low. Weekly support and resistance levels are at 1097 and 1170.

Gold, Daily

The price of gold rallied to pivotal resistance between 1134 and 1147. This bracket is fairly close to the upper daily Bollinger bands while Stochastics are in the overbought area. The same goes with the RSI (7) and Money Flow Index (7). The move higher from 1098 support has been strong. Pivotal resistance area was reached with three wide range candles. However, this doesn’t mean that the price can’t correct lower. Price is trading at resistance and we should follow the intraday resolutions to get clues if and when gold starts to roll over. There is some support at 1136, caused by the daily high from Thursday last week. Significant daily support and resistance levels are at 1112 and 1147.

Gold, 240 min

Lack of momentum is not surprising after such a quick move into a significant resistance. This is manifested in a sideways move that has created a small triangular flag formation and indicates that some of the players have cashed their chips after the three day rally. Stochastics is pointing downwards suggesting overbought conditions while price is trading inside a pivotal resistance created on September 1^st. The nearest significant 4h support and resistance levels are at 1123 and 1147.

Conclusion

In the long term (weekly) picture we have early signs of an attempt to move to the upper parts of the channel. The lack of commitment from the Fed to raise rates has helped to create a higher weekly low, which is a significant indication of strength coming into this market and acts as an early indication that the price of gold has scope to move somewhat higher – even up to 1200 – 1232 range. However, before that we should see some bottoming action above the 1097 support. In the daily time frame price is at a resistance that coincides with the upper Bollinger Bands which suggests that the market could correct lower from here. RSI, MFI and Stochastics are right at the overbought area supporting the idea. Intraday support at 1135 holds the price up but at the time of writing but if that level breaks the next significant daily support level is in 1098 -1112 bracket. If gold breaks out of the triangle to the upside and manage to move beyond the 1147 resistance, the next likely target range is at 1170 – 1186.

Janne Muta

Chief Market Analyst

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AUDUSD Creating A Shooting Star At Resistance?

September 9, 2015 Forex Analysis

AUDUSD, Daily

AUDUSD rallied on the back of positive developments in the price of copper and Chinese stock market yesterday. Today the pair hit a resistance level at 0.7045 and after a brief move above the level the pair failed to maintain the gains and rolled over. The 0.7045 level supported price on August 24^th and created a weekly low that was later on penetrated. Stochastics is trying to move higher from oversold levels but in a downtrend such moves are typical and don’t provide the same value as in a sideways range. Oscillators tend to fluctuate near oversold levels when markets are trending lower.

The fact that 2 sd regression channel high coincides with today’s high suggests that this level is a potential turning point for AUDUSD. The level also coincides roughly with a 23.6% Fibonacci level at .4029. The next support level is at the recent low (0.6900) while weekly chart suggests that the pair has further to fall and should eventually hit a support level at 0.6532.

AUDUSD, 240 min

Traditional trend line based channel analysis in 4h chart provides us a different picture. Price has broken out of the bearish channel and is currently trading at the upper Bollinger Bands but also above 50 SMA. Stochastics is turning down from overbought zone indicating that upside momentum is reversing. However, the fact that price has been able to climb above the 50 SMA for the first time since the pair started to move lower in August 21^st could complicates the picture for shorts. Another potential complication is the pin bar that suggests price could move higher from the moving average support. The next resistance level is at 0.7099 while support levels can be found at 0.7015, 0.6950 and 0.6895.

AUDUSD, 60 min

The hourly timeframe reveals how price has created a pinbar at an intraday support at 0.7020, a level that coincided with the lower Bollinger Bands. This led to a rally that tried to challenge the latest high. At the time of writing this challenge is failing as the pair hasn’t been able to push into new highs.

Conclusion

AUDUSD is technically in a down trend and fundamentally should remain so as the Fed is more likely to raise rates than the RBA this year. The next significant long term support level is at 0.6532 which could be reached by November this year if the decline continues at the same rate as the pair has declined since May this year. Short term price has rallied to a previous support that has potential to turn price lower. However, there has been no strong momentum to the downside after price created a shooting star candle in the 4h chart in the Asian session today. Price has been fluctuating between 0.7015 and 0.7060 and has found support from 4h 50 SMA. This increases probabilities of price breaking higher and testing the next resistance level at 0.7099. Those looking to short at current levels should seek for bearish signals in the lower intraday timeframes before initiating shorts. If price keeps on making higher lows, look for a move to 0.7099. If price breaks lower from current levels my target 1 is at 0.6960 and target 2 at 0.6920. Lower highs in intraday resolutions indicate weakness and increase likelyhood that price will move lower.

Janne Muta

Chief Market Analyst

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S&P 500 Analysis for 09.07.2015

September 7, 2015 Forex Analysis

S&P 500, Weekly
As the US and Canada are celebrating the Labour day the markets are likely to be subdued today. We will take this opportunity to visit the US stock market as it has had strong moves since my last report on stock indices. I suggested in my previous report August 12^th (Click here to read) that S&P 500 index future (ES) will move lower after making lower highs and, that it would be the time to enter the short side of the market by selling rallies.

Two weeks ago ES found support at a weekly pivotal low from October last year and rallied strongly after printing a low of 1831. This suggests to me that the price volatility will settle down for the near term. In other words, I don’t believe ES will move below 1813 but that it will fluctuate between it and 2054 resistance over the coming week. MFI and RSI are oversold which hasn’t happened since October 2014. This supports my view that market was over stretched to the downside at 1831. Also, price has moved outside the regression channel and is therefore very much in line with my predictions on May 7^th: stocks are in a topping phase.

S&P 500, Daily
ES jumped higher when buyers stepped in at a pivotal support between 1813 and 1883.25. Price rallied strongly to 1992.75 after which ES has fluctuated sideways above 1900 – 1920 range. The last time market rallied from 1813 support (October 2014) was in a different context. Then market was still trending higher and upward momentum after the 1813 low was considerably stronger. This resulted in price moving into a new closing high by the end of the month. This time there is no such momentum and ES will stay below previous highs. Therefore, price swings between support and resistance levels provide traders with plenty of opportunities.

With the market participants waiting for the FOMC meeting on September 17^th I expect that price will move sideways between the now created low and the resistance levels above. I don’t think it likely that ES would move below 1813 but rather create a lower high above it. Nearest support and resistance levels are at 1883 and 1992.75 while the next significant levels are at 1813 and 2046.

S&P 500, 240 min

Support below 1920 and resistance above 1960 have forced ES to move sideways and this has created a triangular formation of which price has broken out on the downside. This suggests there will be weakness before a move higher can resume. This is supported by the fact that the number of stocks falling in the NYSE is increasing more than the number of stocks rising. In addition, the short term volume statistics indicate weakness in the intraday picture. As there is higher time frame support relatively close by, I am looking for short exits and long entries at and around of 1850 support.

Conclusion

In the long term, the US stock market has broken out of the rising trend channel and entered into a topping phase which is usually fairly volatile. This is obviously good for our traders as there will be increased number or opportunities to catch bigger price swings. I expect the 1813 – 1883 support area will hold and eventually move the market to test 2046 resistance. In short term the support area between 1850 and 1183 is likely to support price while the first significant resistance level is at 1992.75.

Janne Muta

Chief Market Analyst

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Gold Rally Halted Near Resistance

August 17, 2015 Forex Analysis

Gold Rally Halted Near Resistance

Gold, Weekly

I pointed out in my previous report that the long term picture stays weak and suggests lower prices for gold. However, I noted that in short term we should see 1080 support holding and market testing the 1130 – 1146 resistance area. If price moves to this resistance area we should monitor price action for potential signs of momentum reversal at levels identified in this report.

Market has since moved roughly as expected with the price of gold moving briefly below the 1080 support. This intraday move was quickly rejected and price closed above the support. This was followed by a sideways move and then a rally that almost reached the lower end of my resistance range last week. The long term weekly picture remains bearish with gold trading near previous support areas. The 23.6% Fibonacci level coincides with the 1130.40 low and therefore suggests increased significance of that level. Other resistance levels are approx. at 1142 and 1160.

Gold, Daily

Gold extended a move to the downside and moved outside the bearish regression channel. Then it took its time after forming a pin bar at support and moved sideways. Now gold has rallied into the the upper Bollinger bands near the first significant resistance level at 1130.40. This level also coincides with a price projection based on the triangle width created by the sideways consolidation.

Stochastics is somewhat overbought and rolling over indicating momentum to the downside should be followed by the recent failure to penetrate the Bollinger Bands. However, the support is fairly close at 1100 to 1103. This support area is roughly the higher end of the sideways move. Therefore the downside move from the current levels might not be that strong or long lived.

Gold, 240 min

Price is moving sideways after breaking below an ascending regression channel. A pivotal high candle low at 1120 limits the upside moves while the nearest 4h support is at 1111.50 coinciding with the lower 4h Bollinger Bands. The upper end of the 1100 to 1103 support area is where 50 period simple moving average is at the time of writing. At the same time Stochastics Oscillator quite correctly suggests that price is trading approx. in the midrange of the recent sideways move. The latest complete 4h bar is a pinbar that indicates lower prices but there has been now follow through.

Conclusion

Even though gold is near the lower end of the long term downward trend channel the proximity of previous support levels (now resistance) suggests that it is hard for the buyers to create a strong rally from here. Price of gold has been a lacklustre performer in the past when the US Fed has been raising rates. This time should be no different unless some external event turns on a need for safe haven buying. Daily time frame rally from a triangle formation failed at the Bollinger Bands where it also reached a price projection target. This suggests the initial thrust to the upside is over as the target has been reached. If the support at 1111.50 breaks we should see gold correcting slightly lower to 1100 – 1103 support area. All in all, the price of gold is in the short term more likely to correct lower than move beyond the 1120 – 1126.30 resistance. Therefore if price moves into this range of resistance I will be looking for sell signals in the lower time frames. Should this take place my targets for the shorts are at 1110 and 1103.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokers official website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

“My mission is to help you to become a confident and successful trader”

US Stock Markets and MSCI World

August 12, 2015 Forex Analysis

Dow Jones Industrial Average future, Weekly

For the first time since the year 2011 the Dow Jones Industrial index futures are now moving below the 50 week moving average for more than two consecutive weeks. This speaks of a changed market psychology and is in line with my predictions in May. Also, China’s decision to devalue Yuan twice hit the market sentiment from two directions. First of all, it is a sign that China’s economy needs artificial support from a lower exchange rate and secondly now the products imported into China are more expensive and therefore less competitive. For German companies for instance China is an important export market. As a result Dax is trading almost 2.5% in the red today. Also, this move has been interpreted a sign of desperation on behalf of Chinese officials.

On May 7^th I tweeted on MSCI World Index saying that the bull market for stocks is over. I pointed out that MSCI World etf charts (weekly and monthly) indicate that the markets have entered to a volatile topping phase. This phase typically takes place after a long move higher and leads to a severe correction or a period of bear market. Monthly chart showed an increase in volatility and a bearish shooting star candle with the next candle moving well below the shooting star low. The weekly chart showed how this MSCI World index tracking etf had moved outside the up trending regression channel, a clear sign of increased volatility and weakness.

Since my tweet in May, the technical picture in many of the stock indices has continued to degrade. Dow Jones Industrial Average (DJIA) has moved sideways and has been weaker than both Nasdaq and S&P 500 indices. Just lately DJIA created a lower high that eventually led to index breaking below the 50 week moving average. After such a long move higher this is a bearish indication. Many other indices have also given clear bearish warning signs and suggest that for long term investors it is the time to gradually move money from long stock positions to inverse ETFs and into trading the short side opportunities with CFDs. Let’s take a look at what the other indices are signalling on the state of the global stock markets.

S&P 500, Weekly

On July 27th I wrote about S&P 500: Long term picture has turned more bearish with the index making a lower high. The supports however are still in place and should attract buyers at levels not far from the current price action. This will probably lead to rally but due to the overall weakness in different sectors I expect that this rally will lead to another lower high and more sideways ranging before the market can become directional again.

This is indeed what happened market rallied the next day and created yet another lower high. S&P 500 index future (ES) is again at those same levels and is trading close to both the weekly lower Bollinger bands and 50 week moving average. However, the next clear support level is a little lower at 2034.25. After a weak rally from this support area and a lower high in daily chart it might well be that this support will not hold but support is still support until it is penetrated. The next support is at 1973.75. Over the past week money has been flowing away from cyclical stocks into the safe haven of utilities. Utilities are up by over 2.5% in relation to S&P 500 index while Financial stocks are only up by 0.72% on the same basis. Market participants have clearly turned into more risk averse direction although there are no signs of strong risk aversion yet as financial stocks are holding up rather well.

Nasdaq 100 index future, Weekly

Nasdaq has been relatively strong when compared to other US indices. In mid June index was able to push into new highs but this move was quickly faded and Nasdaq fell back below the previous high of 4551. If a market breaks into new highs but cannot then sustain the new levels, it generally means that market participants did not see the move as a sign of strength but rather as an opportunity for profit taking. Index has since fallen almost down to a potential support area between 4344 and 4448. The bottom end of the range coincides with the lower 1.5 stdv Bollinger band while the 50 week moving average is not far away from the level at 4314. I expect that this down move in Nasdaq will reverse inside this support area but then there will be an important resistance are between 4551 and 4638.

MSCI World Index, Weekly

June 12th I wrote about MSCI World index etf: Weekly chart reveals that the index etf has made a lower high and has since then moved back to the support at 32.73, which once more bounced IQQW higher. This is very bearish and the peak of the lower high is a clear sell area should the market still manage to rally up there.

We have since seen exactly this happening: price rallied to the previous peak and turned lower right there. This global index tracker etf has been moving sideways in what very much looks like a topping formation after a huge run higher. For three months global stock markets have been in a topping mode as I expected would happen. Unless something extraordinary happens these topping formations tend to lead to sizeable corrections that usually bring the markets down at least the width of the formation. In the case of this MSCI World index etf it would mean almost a 10% correction below the current levels and 16% correction from the highs printed in April. This correction would be more severe in more smaller and volatile stock markets such as South-East Asia or Scandinavia or a high beta markets such as German Dax. Even though two lower highs indicate that the MSCI World etf will eventually break lower it is now close to a supporting level and we need to see the support broken before such a move can take place. The next significant support level is at 30.08.

Conclusion

The most important stock indices globally are showing signs of weakness just as expected. Such behaviour after a long and extended move higher in these markets suggests that institutions are not buying but rather distributing their long positions in stocks. This is a time to gradually move from long term investing to trading stock CFDs as there will be money making opportunities during both the sideways move (topping formation) and eventually in the following correction. Once the correction is over and stocks are at levels that are attractive from both a valuation point of view and technically we can start considering them again. Currently many of the indices are near the lower end of their topping formations. This increases the chances of markets rallying from here and it therefore makes sense to look for rallies to previous peaks or other major resistance levels in order to time the selling (and in case of traders, short entries) correctly.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokers official website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

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S&P 500 TRADING NEAR LEVELS THAT SHOULD ATTRACT BUYERS

July 27, 2015 Forex Analysis

S&P 500, Weekly

At the time of writing Asian shares are on decline with Nikkei down by 1.2%, Nifty 0.97% and Hang Seng Composite down by over 3% and according to Bloomberg Shanghai Composite is down by 8% even in the government managed market. The US stock market finished Friday in the red, with S&P500 index losing 1.07%. Apart from the Fed expressing their commitment to raise interest rates market participants have been worried about valuations getting dear. S&P 500 P/E is getting close to 18 and disappointments with Caterpillar, 3M, IBM and Biogen Ideg’s earnings reports added to the worries of this market not being healthy enough to push into new highs. Additionally we had Apple publishing a record high quarterly result but the stock was hammered down by 9% the next trading day. This is not a sign of a bullish market but rather indicates that the willingness and commitment to pay higher prices and keep the uptrend intact is weak. China PMI being negative and a 6.8% drop in the US June New Home Sales report added to the negative sentiment. A look at the sectors reveals weakness in key sectors. All sectors came down last week but Industrials, Semiconductors, Basic Materials and Energy Stocks show signs of technical weakness.

S&P 500 e-mini future (ES) fell down from the resistance as expected and finished Friday’s trading inside the supportive range published in my previous reports. It is now trading near levels that should attract buyers .The price is at weekly pivot and fairly close to the lower Bollinger Bands and a 50 week SMA. Last week’s high was a lower high and suggests technical weakness in this index and price has now opened outside the up trending regression channel after wedging and then breaking out of the wedge.

S&P 500, Daily

ES reached my support range of 2073 – 2080 on Friday’s trading and the low of the day coincided with a 61.8% Fibonacci level. Stochastic oscillator is oversold and price is trading near pivotal support. As we have industrials etf XLI still is some distance away from the support levels I am expecting that ES cannot yet move higher but will either consolidate or correct further before finding serious demand. Financial sector also has space to correct lower and the same applies to Technology as well. This in fact applies to quite a few other sectors too and is likely to drag the US stocks lower before buyers emerge. Support and resistance levels in ES are at 2078 and 2116.50.

S&P 500, 240 min

Price is trading between two intraday support levels at 2064.50 and 2078 while Stochastics is at the oversold threshold. The nearest 4h resistance level is at 2091.50 where a declining trendline coincides with the level. There was a hammer candle on Friday night but no follow through after the candle was formed. Market has been dropping for 4 days so we might get a move against this trend and a test of next resistance level. If ES can create a higher intraday low and hold above 2078 price can move higher towards the next resistance at 2091.50.

Conclusion

Long term picture in S&P 500 index has turned more bearish with the index making a lower high. The supports however are still in place and should attract buyers at levels not far from the current price action. This will probably lead to rally but due to the overall weakness in different sectors I expect that this rally will lead to another lower high and more sideways ranging before the market can become directional again.

Intraday chart shows some signs of buying in a form of a hammer in the 4h chart. This was probably short covering before the weekend and this morning the quiet market has been ranging sideways with low liquidity. After moving lower for four days it would not be a surprise to see a move higher but we need to see how traders will react once the US market opens and some serious volume comes in. Look for momentum reversal signals at support levels.

Janne Muta

Chief Market Analyst

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About Janne Muta, HotForex’s Chief Market Analyst

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S&P 500 TURNED LOWER AS EXPECTED

July 23, 2015 Forex Analysis

S&P 500 e-mini future (ES) turned lower soon after hitting my projection level at 2122 and is currently trading at 2102.75. This move lower was triggered by substantial overnight losses in Apple and Microsoft shares after IBM had lost ground significantly in the earlier trading session.

Apple posted record quarterly profit but was strongly sold off. Apple shares tanked nearly 9% in after-hours at one stage trade iPhone shipments missed forecasts and forecast revenues shy of the $51.1 bln targeted, wiping of some $50 bln in market cap. Apple shares cut those losses back to -6%. The absorption of Nokia also tarnished Microsoft’s results to the tune of a $7.5 bln write-off and 5.1% revenue decline for a $3.2 bln net loss, knocking its shares over 4% lower after-hours. Yahoo also missed and sank 2.2%.

I have been suggesting in the last two reports on ES that this market will rally the above resistance and will hit significant supply between 2111.25 and 2134. This has now taken place and for the benefit of those that have shorted the index in the resistance or will be selling the rallies we need to focus on the likely moves from here. In the July 16th report I said that the supply inside the resistance area should bring the ES down to 2073 – 2080 range and there is no need to deviate from this view.

Stochastics are rolling over from the overbought zone indicating further move down. This is likely as the next support can be found at 2078 level. The 50% Fibonacci level coincides with this area at 2080, therefore I expect market to find support in 2073 – 2080 range. There is some intraday resistance at 2009 to 2010 that might provide a short selling opportunity for those not engaged at the short side yet. The next intraday resistance is at 2119.25. Look for momentum reversal signals to confirm the validity of these levels.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our TopForex Brokers official website:http://www.topforexbrokerscomparison.com

About Janne Muta, HotForex’s Chief Market Analyst

“My mission is to help you to become a confident and successful trader”