Australia | Oct 12 2013
The downtrend has ended after two weeks. The market was oversold last week and bounced to finish the week neutral. The market has been testing long term support on the monthly which has led to increased volatility. The weekly outlook shows upside to 5335 and downside to last weeks lows to 5128. The congestion zone from last week between 5257 to 5275 remains as key resistance and the weekly stop for next week is 5257. This indicates the bulls have a lot of work to do to avoid a dead cat bounce. Volume was up on the week and looks likely to continue rising.
The short term daily stop for Monday is 5190 and the daily upside can be seen to 5246. A close below 5190 on Monday will see the market on a downtrend on a daily weekly and monthly basis for the second time in a fortnight. The important supports for next week are 5204, 5170, 5156 and 5128. Upside resistance can be seen at 5241, 5264 and 5281. AUDUSD had a flat week and holds the weekly uptrend and is pushing upper limits at 0.948. SP500 bounced from oversold levels in a similar pattern to the ASX with 1711 last weeks weekly pivot.
The market has bounced from oversold and the trend is neutral. Volumes remain the key with limited selling at the lows indicating patience from sellers. . We continue to favour weakness with the start of a new weekly downtrend. We remain neural and look for new short positions with the weekly stop at 5257 and resistance to 5281.A close below 5257 next week will see the start of another downtrend and the market will look to test the lows of last week.
Bulls held the sellers and pushed the trend back to neutral. The market gapped higher on Friday and the bulls have a lot of work to do to maintain the trend. A close above 5258 next week will see a new weekly uptrend. Upside resistance can be seen to 5335 and a break of this level will lead to a breakout. The bulls have monthly support continuing to hold the sellers and have survived the first selling pressure in three months.
Bears broke supports and got the market to oversold but have relinquished momentum with the weekly trend back to neutral. The market will need to rise another 30 points to maintain a neutral trend and it is likely last Fridays bounce will turn out to be a dead cat bounce and a retest of last weeks lows is highly likely. A new daily downtrend will be the key to entering new shorts.
iQUANT FORECAST RANGE 5128 – 5335
PIVOT POINT 5258
Review of prediction from 4th October 2013 for last week
The uptrend has ended after 15 weeks. The medium term peak looks set above 5300. The weekly outlook shows upside to 5275 and a break of this level will retest recent highs. Congestion can be seen between 5257 and 5275. Supports continue to be tested and 5200 has provided solid support as volumes remain below average. The short term daily stop for Monday is 5245 and the weekly stop is 5226. The important supports for next week are 5200, 5175, 5150 and 5124. Upside resistance can be seen at 5225, 5257 and 5275. AUDUSD has reversed last weeks downtrend and is back on a weekly uptrend and waits for the next direction. SP500 found support at 1678 and this level remains a key support level. The market has fallen from the peak and volumes remain low with a lack of direction continuing. We continue to favour weakness with the start of a new weekly downtrend. Short positions are held with a tight stop. A close below 5226 next week will hold the downtrend. We wait for volume to enter the market and provide direction.
Bulls were unable to maintain momentum. A close above 5226 next week will reverse the downtrend. Upside resistance can be seen to 5275 and a break of this level will lead to a breakout. Sell volume was light and the downtrend is developing. The bulls have monthly support at 5200 holding the market and sellers on the sidelines.
Bears have gained control with the start of a new weekly downtrend. Volume was below average and solid support was found in the market at 5200.The short term daily is on a downtrend, The stop for next week is 5226 and the short term daily stop is 5245. Bears will need to increase selling pressure to break the long term support at 5200
iQUANT FORECAST RANGE 5124 – 5275
PIVOT POINT 5226
ACTUAL 5106 – 5235
The second week of the downtrend saw the market trade lower on Monday as it opened below the weekly stop. A small bounce saw the market test 5150 before hitting the weekly target at 5125 on Tuesday. The selling was low in volume and the bears were unable to break the market lower with two attempts to break 5100 rebounded. As predicted on Thursday a break above the 5153 mid week high saw the market rally back to 5200 and through to the weekly stop at 5226 on Friday.
The market was medium term oversold under 5125 and Fridays move has moved the market to neutral on a weekly basis with a close near 5226. The monthly stop also lies at 5218 indicating the market is neutral waiting for direction. Shorts should have closed at target or via a tight stop for a positive return. The SP500 showed the same pattern and is looking at peak levels again. The AUDUSD drifted between 0.94 and 0.948 and also waits for direction.
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ASX200 report tracks the December ASX200 SPI. The ASX200 index is currently trading at a 7 point premium to the futures. All levels in this report refer to the ASX200 SPI futures
The information contained in this communication is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Iquant Systems Pty Ltd (CAR No.435627) is a corporate authorised representative of Avestra Capital Pty Ltd (AFSL No. 292464).
Copyright © 2013 Iquant Systems, All rights reserved.
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