Weekly outlook for Nov. 27 Dec

Transcription

1 Weekly outlook for Nov. 27 Dec Summary For the ES we expect a minor pullback in the early part of the week, followed by a rally into the weekly close. There are four option expirations this week that will affect trading, and the GDP report on Wednesday will more or less determine how far the price can dip and then bounce. Oil broke last week's high and made the highest high since 2015, to establish a new intermediate-term uptrend. $58 was a breakout point last week and it may pull back to re-test that area. $56.75 has a breakaway gap. As long as the gap holds up, buying on dips will continue this week. $62.50 will be a major resistance line. $55 level needs to hold up to prevent oil from falling. GOLD is expected to hold above $1280 level early in the week. The GDP report on Wednesday will determine the price action. Gold could retest the $ zone again if the GDP report is as expected, and the USD continues to weaken. Page 1 of 8

2 SP500 index (ES mini, and SPY): LONG-TERM TREND DIRECTION: Up and bullish Trade strategy: Buy The long term uptrend remains strong and bullish. It expected to be make new highs again for the rest of the year. INTERMEDIATE-TERM TREND DIRECTION: Up and overbought Trade strategy: Buy The intermediate-term trend is up and bullish. Even though all indicators are moving into overbought territory, they can not stop buyers from entering at the top. We are moving into the holiday season and the traditional Christmas rally season is not too far away. The market could continue to rally. Page 2 of 8

3 S&P500 - SHORT-TERM TREND DIRECTION: up Trade strategy: buy on weakness SP500 index (ES and SPY) closed above 2601 last Friday. But the thin holiday volume suggests that Monday and Tuesday could retest last Friday's low, then rally into the weekly close. This week has four option expiration days. The 2575 level will be the first support area, and 2555 will be a major support line. As long as the index doesn't close below those two lines the short-term uptrend will remain in place. The daily PMO stopped declining last week and the slow STO indicator moves into the overbought area. The indicators give a mixed signal, but the daily PMO indicator has plenty of room to go up further. The pullback still is expected to be minor. Dip buyers will continue to show up. Weekly Option Strike Expiration Strike Expiration Calls /11/27, /11/30-12/ 1 Meanline Puts /11/27, /11/30-12/1 Page 3 of 8

4 2. Oil ($WTIC, CL) LONG-TERM TREND DIRECTION: Neutral Trade strategy: Sell on major Resistance and buy on Support The long-term trend is getting ready to change. The fast momentum trend continues a BUY signal and rising (the 10-month EMA line crossed over above the 20 month EMA). The 2015 year's high around $ could be the upside target. The key momentum trend indicators also turn up although they haven't crossed over to give a long-term BUY signal. Up to now we still assume the price will stay inside a long-term consolidation range. When the monthly PMO indicator reaches its zero line we will give a new assessment. INTERMEDIATE-TERM TREND DIRECTION: Up Trade strategy: Buy on pullback to the 10/20-week EMA area The intermediate-term uptrend is up and bullish. Oil closed above the 200-week EMA line for the first time since June But it hasn't given a final confirmation that the 200-week EMA line is broken. This week we need to see a follow-through and oil continuing to close above the 200-week EMA line to give confirmation that the uptrend will continue. Both weekly PMO and STO indicators are overbought but not extremely so. The weekly and monthly closing price will be very important. Usually overhead long-term resistance lines are not easily broken the first time they are visited. Page 4 of 8

5 OIL - SHORT-TERM TREND DIRECTION: Up Trade strategy: Buy on dip Oil returned above its broken steep support line (dotted red line). It not only held price above 20-day EMA line, it also managed to break the prior week's high to make the highest high since July It established an intermediate-term uptrend. $58 was a breakout point last week. Oil could pullback to the $58-57 zone area for testing. The 20-day EMA line at $55 remains a major support area. $56.75 has a breakaway gap. As long as the gap holds up, buying on dips will continue this week. $62.50 will be a major resistance line. We could see some profit taking when oil approaches that resistance area. Page 5 of 8

6 3. GOLD (GC, GLD) LONG-TERM TREND DIRECTION: flat Trade strategy: Buy The long-term trend remains flat. GOLD continues to hold above the 10/20/40-month EMA momentum lines (all overlapping) for consolidation. The two slow lines slightly favor the upside. The longer GOLD continues like this the stronger the breakout will be when it comes. Traders need to be aware of this is gold break out in either direction. INTERMEDIATE-TERM TREND DIRECTION: up Trade strategy: buy above the broken declining line GOLD struggled around its intermediate-term momentum support lines (20/40-weekly EMA lines). It still holds above the broken long-term declining line, but it need to exceed the year 2016 top to establish a long-term rising trend. So far we haven't seen it during last week's shortened trading. The weekly PMO indicator still declined last week, but the slow STO indicator is getting oversold. We may see GOLD hanging around in this area the daily overbought condition is resolved. Overall I don't any reason on the chart for a very bearish move, but be aware of the negative sentiment in the gold market. Page 6 of 8

7 GOLD - SHORT-TERM TREND DIRECTION: neutral Trade strategy: watch for range breakout and follow the breakout direction GOLD failed to break the $1300 level and pulled back into the 20/40-day EMA line area for closing last week. The range from $1300 to $1260 is a broad consolidation range. This week the GDP report may help GOLD to breakout this range, if it can overcome the daily overbought condition. So far $1305-$ zone is a major resistance area, and $ zone is support. As long as GOLD doesn't break $ we need to sell at the top of the range, and buy on any pullback to the support, be sure to use proper stops. Page 7 of 8

8 WEEKLY ECONOMIC REPORTS Page 8 of 8