Weekly outlook for April 30 May

Transcription

1 Weekly outlook for April 30 May Summary The S&P500 index is having trouble deciding if it will rally or decline. This indecision makes trading less profitable. Wait for a break-out direction to be established before opening new positions. Oil has broken out from a two-year consolidation area. We're expecting a brief retracement to test the break-out area. If it holds, the upside targets are $71 and $75. GOLD is being driven by the rally in the US dollar. We may see a small bounce early in the week, followed by a retracement if the dollar continues to rally. Page 1 of 8

2 SP500 index (ES mini, and SPY): INTERMEDIATE-TERM TREND DIRECTION: neutral Trade strategy: stay on the sidelines The intermediate-term trend is neutral, swinging between bears and bulls. Two weeks ago the market formed a bearish doji candle; last week it formed a bullish doji candle. This indecision is reflected in a big triangular continuation pattern. The weekly PMO indicator continues to fall while the slow STO is rising from an overbought area. The 50-wEMA line holds the price up. These are early hints that the index could break its consolidation range in May, but that is uncertain. Page 2 of 8

3 SHORT-TERM TREND DIRECTION: flat Trade strategy: none SP500 index continued to go sideways within a triangle frame. Daily PMO and Slow STO are lying at the neutral area, which indicates that the index could go in either direction. For it to rally, the index has to break out above the overhead downtrend line. For further decline it has to break the 200-dEMA line and long-term uptrend line. At the current stage, I am not interested in trading either direction until the index breaks out from the consolidation area. Weekly Option Strike price Expiration Strike price Expiration 2715 Meanline /30/18 **** 5/2,4/ **** see daily trading plan Page 3 of 8

4 2. Oil ($WTIC, CL) INTERMEDIATE-TERM TREND DIRECTION: up Trade strategy: buy on short-term pullback Oil intermediate-term trend remains up. As long as the breakout level continues to be held up in the longer time frame charts, the upside target at $71-75 should be within reach. Page 4 of 8

5 SHORT-TERM TREND DIRECTION: up Trade strategy: buy on the bottom of uptrend line area Oil broke out from a two-year consolidation area two weeks ago. The price has gone sideways since then. Now the daily PMO is trying to top and Slow STO is getting overbought, and we expect another pullback could be on the way to test the break-out zone around $66-$65. If the retracement stops there we will be looking for a short-term entry on the long side. Page 5 of 8

6 3. GOLD (GC, GLD) INTERMEDIATE-TERM TREND DIRECTION: up Trade strategy: none The Intermediate-term trend is up. But the weekly PMO indicator has topped and crossed down through the signal line to give a sell signal. Now the $1310-$1300 zone becomes a decision zone again with the possibility of a re-test of the long-term support line at the $1275 area. The price has retreated several times from the top of a long triangle pattern. Watch to see how this plays out this time. Page 6 of 8

7 SHORT-TERM TREND DIRECTION: neutral Trade strategy: none until the breakout direction is determined Gold pulled price back to the bottom of four-month trading range. Daily PMO indicator is declining to the zero line, which could be a neutral stage, and the daily slow STO indicator has an extremely oversold condition. Recently the strong US$ sent gold prices down. If the dollar continues to rally, Gold is likely to break down the trading range. This week watch to see if the price bounces from the bottom of the range or breaks below it. Use that to determine the trading direction. Page 7 of 8

8 WEEKLY ECONOMIC REPORTS Page 8 of 8