Weekly outlook for Aug. 27 Aug. 31, 2018

Transcription

1 Weekly outlook for Aug. 27 Aug. 31, 2018 Summary The S&P500 index is expected to have a monthly adjustment move this week, the volatility expected to be high, and price could have a big swing move. Oil is expected to hold up above $67.45 line. GOLD is expected to have a continuation oversold bounce. A short-covering could help to hold price up if there is an early dip move. Page 1 of 8

2 SP500 index (ES mini, and SPY): INTERMEDIATE-TERM TREND DIRECTION: up Trade strategy: The SP500 index is moving up in the rising long-term trend channel. The weekly PMO indicator shows a solid bottom. Even though the slow STO indicator is in overbought territory. it has some room to follow up. The end-of-month adjustments could cause short-term pullback, but an intermediate-term correction is unlikely at the current stage. Page 2 of 8

3 SHORT-TERM TREND DIRECTION: bullish with overbought condition Trade strategy: The SP500 index made new all-time intraday and closing highs. The price action was bullish, but volume seemed lower than we expected. The daily PMO turns up and gave a buy signal, but a potential negative divergence with high price. Because this week is end of the month we may see a minor pullback. But this pullback is not expected to change the short-term direction. Weekly Option Strike price 2935 Expiration Date Strike price Expiration Date Meanline /27/2018 **** 8/29, 31/ **** see daily trading plan Page 3 of 8

4 2. Oil ($WTIC, CL) INTERMEDIATE-TERM TREND DIRECTION: Neutral Trade strategy: buy on dip Oil has a bullish engulfing candle on the weekly chart. The price closed above the 20-wEMA line, which was bullish price action. It is clear that oil has a chance to go back to the July high at $74.50 area until the weekly PMO turns up. Page 4 of 8

5 SHORT-TERM TREND DIRECTION: up Trade strategy: buy on pullback Oil went back to the top of the downtrend channel (blue dotted lines) and below the upper boundary. Last week's bounce was strong and confirmed that $64.85 was a short-term low. The daily PMO turned up last week and crossed above the signal line to give the earliest buying sign. For a continuation high move, the 20/40 d-ema lines around $68-$67.45 zone need to hold up and help oil to close above $69.35 and push the price higher. Page 5 of 8

6 3. GOLD (GC, GLD) INTERMEDIATE-TERM TREND DIRECTION: down with extremely oversold Trade strategy: There is no reversal sign on the weekly chart. The weekly PMO still didn't cross above its signal line. If gold has made a bottom, the weekly PMO has not shown it yet. Given one more week the bottom may be made if the weekly PMO indicator turns up and crosses above the signal line. In any event an oversold bounce should be expected in the short term. Page 6 of 8

7 SHORT-TERM TREND DIRECTION: Neutral Trade strategy: buy on last Friday's low area Gold had a strong reversal on Friday in response to both a short-term extremely oversold condition, and the Fed Chair's comments on a future rate hike schedule. Both encouraged the previous sellers to take profits. The bounce may continue this week. The broken support at $1235 could be retested, but it should act first as a short-term resistance line. The Daily PMO indicator has a buy signal. Any early pullback near last Friday's low ($ ) should give aggressive buyers a chance to enter on the long side. Page 7 of 8

8 WEEKLY ECONOMIC REPORTS Page 8 of 8