Weekly outlook for May 21 - May 25, 2018

Transcription

1 Weekly outlook for May 21 - May 25, 2018 Summary The S&P500 index is expected to hold up for a higher level. The market broke to the upside from a symmetrical triangle pattern and is consolidating above the breakout. A retracement to the breakout is possible. FOMC minutes on Wednesday. Oil is expected to have a minor pullback this week. Oil had been consolidating on the top area for nearly two weeks. A pullback to test the breakout area at $69.50-$68.50 zone should still be expected this week. Buying on dips will be seen again. GOLD is expected to bounce from $ zone. The strong US dollar has been pushing the price down; but this is a key week for Gold; the price could bounce from the rising trend line. $ is a key zone. As long as it holds up we could see bargain hunters stepping in. Page 1 of 8

2 SP500 index (ES mini, and SPY): INTERMEDIATE-TERM TREND DIRECTION: up Trade strategy: buy The intermediate-term trend is up. The SP500 index broke out of a symmetrical triangle pattern two weeks ago, and the price is consolidating just above the breakout. If the index pulls down to close below the 20-wEMA line support (currently around 2678) we may be seeing a false breakout. Otherwise, the price is expected to hold its ground. Page 2 of 8

3 SHORT-TERM TREND DIRECTION: up Trade strategy: buy on dip The short-term trend is up. Last week the SP500 index stayed relatively calm. The volume was very thin, which implies that there are not many participants committed to the rally. However there is a potential bull flag pattern forming on the daily chart, so the narrow range may get more narrow until the index breaks out. That could be in either direction. For the upside, zone is an area to watch for resistance; for the downside, zone is possible support.. Both are control areas for the next breakout move, whichever direction it takes. FOMC minutes on Wednesday. Weekly Option Strike price 2785 Expiration Date Strike price Expiration Date Meanline /21/2018 **** 5/23, 25, **** 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 The intermediate-term trend still is up and still strong six weeks of steady advances from the lower boundary of the up-trend channel with only minor pauses. The weekly PMO indicator is overbought, but internal buying interest is strong and helps to hold the price up. The $75-78 upside target remains intact. But the momentum indicator (the 20-wEMA line) is getting too far away from the price. At some point the advance may stall and the price could retrace to re-test the momentum line. Any news about US sanctions on Iran will also affect the price. Page 4 of 8

5 SHORT-TERM TREND DIRECTION: up Trade strategy: pullback possible, but buy at $68.50-$69.50 zone Oil had been consolidating on the top area for nearly two weeks. A pullback to test the breakout area at $69.50-$68.50 zone still should be expected this week. The broken resistance line at $69.70 now becomes the first support area. Buying on dips could be seen again. Page 5 of 8

6 3. GOLD (GC, GLD) INTERMEDIATE-TERM TREND DIRECTION: flat Trade strategy: none There is not much change in the intermediate-term trend. Gold broke below its five-month sideways range and now is trying to reach the one-year rising trend line (green dotted line). The weekly PMO indicator is in a positive area, but the sentiment on the buy-side remains very weak. Page 6 of 8

7 SHORT-TERM TREND DIRECTION: down Trade strategy: scalping trades only; buy at support zone Gold was under selling pressure while US dollar strengthened. It broke through the bottom of the five-month trading range, and barely holds above the one-year rising trend line. This is a key week for Gold; the price could bounce from the support afforded by the rising trend line. $ is a key zone. As long as it holds up we could see bargain hunters stepping in. Page 7 of 8

8 WEEKLY ECONOMIC REPORTS Page 8 of 8