We believe in the European stock exchanges anyways, and with this market
in particular, we have had one of the nicest uptrends over the last
couple of years. Because of this, we believe that buying on the dips
will continue to be the way to go going forward, and this move may offer
just that type of setup. Of course, if we break above €4500 on a daily
close, we think that’s strong enough as well as the market would
continue to go much higher, ultimately touching the €5000 level as
mentioned above. We have no scenario in which to sell this market right
The S&P 500 initially fell during the week but found enough support
below at the 1850 level to turn things back around. However, we have not
broken above the 1900 level, a prerequisite for a buy-and-hold type of
situation. On a daily close above that level, we are more than willing
to buy this market as it should head directly to the 2000 level at that
point in time. Pullbacks here should offer nice buying opportunities as
we think the market will struggle to sell offer any real length of time.
The FTSE had a bullish week as we shot well above the 6700 level during
the week, testing the 6850 area. This area has been resistance
previously, so on a daily close above that area, we are buyers as we
believe the FTSE will continue to go higher at that point. Pullbacks on
short-term charts can be buying opportunities as well, recognizing that
the area will more than likely take a bit of momentum to get through.
Breaking out above that area is a sign that the market could head to
The Dow Jones tried to rally during the week, indeed we did accomplish
somewhat of a move higher, but we still see quite a bit of resistance at
the 16,600 level. This is an area that should be overcome given enough
time, but in the meantime we believe that a break above the top of the
weekly range would be necessary in order to start going long. At that
point time, we are very bullish of this market and recognize that it
would be a breakout. On the other hand, a pullback from here should see
plenty of support all the way down to 16,000.
The US Dollar Index initially tried to rally during the week, but ran
into resistance at the 80 level in order to push things back down. That
being the case, it appears that the market will find plenty of support
below at the 79 handle as well, so having said that we believe that the
market doesn’t have a lot of room to move lower. A break down below the
79 level does send this market crashing too much lower levels, probably
the 75 handle for that matter. However, we expect to see supportive
action in this area, so we think that the market will ultimately print
some type a supportive candle that we can buy in this general vicinity.
However, right now we are currently waiting to see what the market
decides on what to do.
On the other hand, if we did break down to fresh, new lows, we feel that
this market could fall apart and head to the $15 level given enough
time. That move could be rather brutal actually, so it might happen
quicker than you would expect. The market in our opinion though looks
rather bullish and we will continue to expect good things.
As far selling is concerned, if we broke through both of the hammers to
the downside, that would be a very negative sign. We still think that
there would be a significant amount of support near the $1200 level
though, so selling is going to be difficult at this point in time. It
really doesn’t matter though, even if you are bullish you have to
recognize the fact that it could be a bit of a fight to go higher from
here, and that the move might take some significant amount of time.
Regardless though, we only see buying opportunities at this moment in
the gold markets.
The USD/JPY pair tried to rally during the course of the week, but gave
back almost all of the gains after hitting the 103 level during the
Friday session. This area was in fact a significant barrier, and it held
true during this past week. However, we are starting head towards an
uptrend line that could come into play. Because of this, we feel that a
break above 103 is in fact going to be bullish enough to start buying
simply based upon the fact that has held so well. Ultimately, we do
believe that this pair goes higher.
The USD/CAD pair fell during the bulk of the week, but as you can see
found a little bit of support just below in order to form a candle that
looks a bit like a hammer. Nonetheless, we think that this market is
essentially stuck in the consolidation range that we’ve been in for some
time now. This being the case, we feel that the market should continue
to go higher from here, but breaking out above the top of the range is
what we need to see in order to start buying again.
The NZD/USD pair initially fell during the week, but found the 0.85
level to be supportive enough to push the market back around and form a
hammer like candle. This candle suggests that we are still within the
consolidation area that we have been stuck in for about 2 months now,
and as a result we feel that the market will ultimately breakout to the
upside but we have to wait and see whether or not we get the actual
move. We have no interest in shorting this market, we believe the 0.85
level will be the “floor.”