Hey all, below are some technical analyses for the upcoming week. It takes hours of work to go this far into detail so I hope you guys find a good bit of use out of it. There are charts involved so I'll post the link that includes them at the bottom.
Market Summary
The week past we saw reversion in a big way. The Fed kept the price actions returning toward unchanged for the week into the even, then had a nice rally afterward and gave it back the next two days in trading. The markets are starting to show interesting signs of volatility and seem to be making a case that they won't be making up their mind just yet. Whenever Volatility rises, which we saw two weeks ago, it gets absolutely collapsed by trading. So the good news here is that there's still plenty of opportunity on the vol trade both long and short. It's been a slow two month buildup, but we're feeling like the ATM premium sale that we advertised is going to come in over the next week or two. If vol collapses again this week it's going to be profit time on much of the straddles/iron flies...if vol expands and we get a move then we have other things to do and positions to put on and we'll all be happy. So then, how about next week?
Key Events for Next Week
Next week is quiet on the Fed front, most likely Yellen will go back into her Darth Vader style habitat to recoup and remove her helmet and breathing apparatus for a while. We 're guessing in November she'll return to shake out her voluminous robe sleeves and pronounce more inaction as if it were a decision. We assume her kitchen smells like saltine crackers and sprite--She doesn't strike me as a curry-wurst or lasagna person, we think those require too much commitment. So then, if the Chairperson can't save us from complacency, what will? This week we expect to see oil make up its mind about the move and we don't really see upside as a large problem there. The charts in oil are almost useless here so it's a good opportunity for a small directional trade. Gold and Silver could rally on market weakness this week but if we grind higher in the indices again we may get a good break that sends the miners (GDXJ) to hell where they belong.
SPX Overview
Last week we stated, “Heading into next week SPX does not look that great still. The MACYD is dry and the stochRSI is going sideways, both of the short term indicators are neutral. . . .The only thing that is bullish heading into next week is the support being shown. 2,120 is showing excellent support and that is also right where the 100 SMA (light blue) is resting.” Last week SPX trended better than we had anticipated, it is important to note however, the reversal came after the FED meeting. The type of news that is announced during the FED minutes is nothing that can be detected via technical analysis. What we did see was solid strength at 2,120 and the 100 SMA. After the fed announcement of no interest rate hikes we started to rally again making our way back toward 2,200, getting up to around 2,180. Heading into next week SPX is looking a bit better. I think we are still susceptible to red days. But for now we look slightly more bullish than bearish. The SMA’s still do not look too fantastic, which is why I think we can have selloff days however, the short term indicators look good. The MACYD is above the 0 line and sloping up and the stochRSI, after a red day, is still above the 80 line. The best thing to do right now is to play each weak day by day. September is historically bearish so despite the recent bull action this is something to keep in the back of our minds. Commodities (Technical Analysis):
Natural Gas, /NG
Last week we said, “Heading into next week Natural Gas still looks bullish. It is in the full Steph Curry pattern, the MACYD is above the 0 line and sloping up, and the stochRSI is in breakout mode. Next week look for a breakout over 3.00.” We have been overall bullish for NG for months now and yet again we see new highs. Heading into next week NG actually looks less bullish than usual. With the close under 3.00 and the short term indicators bearish, we may see a little more selloff. The stochRSI is heading towards 20 and the MACYD had a bearish cross. Overall natural gas still looks solid so this looks like a dip buy right now. A selloff in the early week followed by a recovery is what the charts are suggesting since we are still in the full Steph Curry pattern. Look for a breakout again on the close over 3.00 and a down trend on a close under the 13 SMA and 2.95.
Oil, /CL
Last week we said, “Heading into next week the indicators are sloppy. The MACYD is below the 0 line and the stochRSI is below the 20 line, this is bearish. However, both are sloping up. Another bearish aspect is the SMA’S, there is only support at the 200 (dark blue) and the faster SMA’s are sloping down. So overall oil is still slightly bearish.” Last week we saw the short term pop from the short term indicators sloping up however, since we knew we were overall bearish the denial was exactly where we expected. We had those trend lines already drawn in and as you can see the denial was right on point. Heading into next week the short term indicators look bearish, the MACYD is about to cross (please note it hasn’t just yet) and the stochRSI is running out of steam. Neither are fully bearish yet, but in combination with the downtrend line it doesn’t look bullish. The SMA’s are still ugly as they are all just clustered. While oil looks bearish it has also been showing incredible strength at 43.00. So even if there is a selloff unless we close under 43.00, that area has been a dip buy. A bullish move would be over the trend line, which would be roughly 46.00.
Gold, /GC
Last week we said “Heading into next week the indicators do not look good still. The MACYD is below the 0 line and sloping down and the StochRSI is below the 20 line. The 13 SMA (green) and 20 SMA (orange) are sloping down as well. This shows that the short term indicators are still bearish.” Sure enough the short term indicators were bearish as we sold off at the start of the week. Gold then had a strong recovery after the FED minutes. We kind of new there would not be interest rate hikes, as most did, so we were able to remain overall bullish, “Gold does still have some stuff working in its favor, the most obvious are that the long term SMAs, 60 (red), 100 (light blue) and 200 (dark blue) are all still sloping up. The other thing working in its favor is the long term trend line. Gold has been holding this trend line well and it is testing it now.” Sure enough, even with the FED holding it down and then shooting it up, gold stayed right inside of the trend lines. The lows and highs both this week were nearly perfect plays off the trend lines we already had identified. Right now gold is squeezing. It is playing inside this tightening wedge and when it breaks in one direction, it will be a massive move. Overall the long term indicators look good still so we are leaning towards a bullish breakout.
Biotech / SPBIO
Last week we stated, “Heading into next week with the close over 5,000 SPBIO is looking solid. If you look there has however been really strong resistance around 5,050. So it could get denied there. Overall the MACYD is looking good as its over the 0 line, the stochRSI is in breakout mode and the SMA’s after Thursday are in the full Steph Curry mode. . .Next week if there is a close over 5,050 SPBIO will be ready for blast off.” Last week we actually never got a close over 5,050, it actually gapped over it on Monday and then like we said “blast off”. It ran hard all week long until giving some back on Friday. SPBIO outperformed our expectations even despite how bullish we were. Heading into next week we may see a selloff in the early week. You can see this week we got denied by the YTD highs. Not the 52 week highs, but the highs for 2016. Right now nothing has fully crossed but the MACYD and stochRSI both look extremely close, this could indicate a selloff at the start of the week. The overall indicators looking super bullish still is what suggests a dip buy. Look for support at 5,270, 5,220, and 5,140. A further breakout comes on the close over 5,360.
Submitted September 26, 2016 at 04:41AM by FirstAlways http://ift.tt/2d2Ztdf
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