Weekly outlook for May 1 May

Transcription

1 Weekly outlook for May 1 May TREND DIRECTION S&P 500 Oil Gold Short Term Intermediate-Term Long Term strong weak strong strong neutral Strong weak weak weak Summary The S&P500 index is expected to hold above the 2365 breakout early in the week. Later in the week the price direction will depend on employment report and the FOMC decision. Oil could continue to have an oversold bounce as long as price stays above the 200- day EMA line. GOLD is expected to form a short-term bottom. But a strong move in the US dollar could continue inhibiting any rally in GOLD. Page 1 of 9

2 1. SP500 index (ESmini, and SPY) Long and intermediate term Based on Feb the Long-term momentum trend has a strong BUY signal and outlook for long term is bullish. But the seasonal bias will soon turn bearish. May through October is often a bearish season for the stock market. It could act against the market rally. Based on the Feb, 2016 the intermediate-term trend momentum also has a BUY signal. Due to the short-term breakout, the weekly PMO indicator corrected its SELL signal into FLAT. The outlook is bullish. Both weekly PMO and Slow STO have more room to move and support the price holding up the breakout level. Page 2 of 9

3 ES/SPX - Short term Based on Dec the short-term momentum trend returns a BUY signal. The SP500 index had a strong breakout move last week. The follow-through supported by heavy volume confirmed a short-term pullback had been posted. The daily PMO indicator gave out BUY signal in early days last week, and has a plenty of room to move up. It encourages the buyers to enter on the dips. The 2365 level is a breakout level. It needs to be tested this week and hold up for the market to move to new highs will be the upside maximum target for this week. Also we should be prepared for the market to sell off from that maximum target due to the bearish seasonality. However a move under the 2340 level will cancel all bets on the upside. A further decline should then be expected. Page 3 of 9

4 ES/SPX Weekly Option Strike price Expiration Date Strike price Expiration Date /5/ /5/5 Meanline /3/ /5/5 This week the cash index has 3 option expiration (Monday, Wednesday and Friday) and ES has 2 option expiration. ADP report on Wednesday and non-farm payroll report will largely drive moves in the index price for option expiration. Page 4 of 9

5 2. Oil ($WTIC, CL) Long and intermediate-term Based on Dec Long-term Trend momentum remains bearish and a strong SELL signal. The monthly STO indicator shows long-term overbought, this is negative for long-term outlook. Based on Nov intermediate-term trend momentum is deteriorated, but no sell signal yet. The weekly PMO indicator accelerated its decline last week, and the outlook for intermediate-term is not optimism. The uptrend channel (green) will be the focus for the following weeks. If there is a break below this channel, oil price is likely to move further down toward $42-$39 zone. Page 5 of 9

6 Oil ($WTIC, CL) Short-term Based on Jan 18, 2017 the short-term momentum trend indicator gave a SELL signal last week. The daily PMO also gave a SELL signal and moves into negative territory. But oil got a short-term oversold condition and meets the long-term support line at 200-day EMA line area. Oil broke that line once and managed to close above it on Friday. The consolidation pattern for the monthly move could lead to a price bounce if oil buyers manage to hold the price above 200-day EMA line at $ Page 6 of 9

7 3. GOLD (GC, GLD) Long term and intermediate term Based on Oct Long-term momentum trend indicator remains in Neutral signal but slightly favors upside. Based on Dec the intermediate-term momentum trend BUY signal slowed down the GOLD decline. The top of the weekly triangle pattern held GOLD price down and caused a short-term retracement. But weekly PMO indicator is rising, which hints the price may break out. $1243-$1239 is an important support zone for May. As long as GOLD stays above it, intermediate-term trend should be up and bullish. Page 7 of 9

8 GOLD (GC, GLD) Short term The Jan short-term trend momentum trend signals a weak BUY. The short-term outlook is negative since GOLD recently made a pullback move from long-term resistance line. The daily PMO topped out and crossed down through its signal line. It indicates that the shortterm correction from $1298 to $1195 range could be a normal correction on the intermediateterm uptrend. Now the Slow STO indicator has an oversold condition. We may see GOLD resume its rally soon. Page 8 of 9

9 4. WEEKLY ECONOMIC REPORTS Page 9 of 9