Australia | Oct 07 2013
The uptrend has ended after 15 weeks. The medium term peak looks set above 5300. The weekly outlook shows upside to 5275 and a break of this level will retest recent highs. Congestion can be seen between 5257 and 5275. Supports continue to be tested and 5200 has provided solid support as volumes remain below average. The short term daily stop for Monday is 5245 and the weekly stop is 5226. The important supports for next week are 5200, 5175, 5150 and 5124. Upside resistance can be seen at 5225, 5257 and 5275. AUDUSD has reversed last weeks downtrend and is back on a weekly uptrend and waits for the next direction. SP500 found support at 1678 and this level remains a key support level. The market has fallen from the peak and volumes remain low with a lack of direction continuing. We continue to favour weakness with the start of a new weekly downtrend. Short positions are held with a tight stop. A close below 5226 next week will hold the downtrend. We wait for volume to enter the market and provide direction.
Bulls were unable to maintain momentum. A close above 5226 next week will reverse the downtrend. Upside resistance can be seen to 5275 and a break of this level will lead to a breakout. Sell volume was light and the downtrend is developing. The bulls have monthly support at 5200 holding the market and sellers on the sidelines.
Bears have gained control with the start of a new weekly downtrend. Volume was below average and solid support was found in the market at 5200.The short term daily is on a downtrend, The stop for next week is 5226 and the short term daily stop is 5245. Bears will need to increase selling pressure to break the long term support at 5200
iQUANT FORECAST RANGE 5124 – 5275
PIVOT POINT 5226
Review of prediction from 27th September 2013 for last week
The uptrend holds for a 15th week. The market is back at peak levels and Monday will be the end of a very good quarter for the markets. Weekly support levels show congestion between 5300 and 5325. Supports continue to be tested without conviction and volumes are very low. The short term daily stop for Monday is 5291 and the weekly stop is 5286 The important supports for next week are 5265, 5234 and 5221. Upside resistance is limited and a break of last weeks high will see resistance at 5337, 5362 and 5400. AUDUSD has failed at 0.95 and moved onto a weekly downtrend. Similar pattern in SP500 sees peak levels in place and a new weekly downtrend this week. The market has retested the peak from a fortnight ago and waits for volume to confirm the next direction. We continue to favour weakness after a 3 month long rally.
Bulls continue to hold gains with targets to 5400. A close above 5286 next week will continue the trend. The 15th week of the uptrend shows upside potential which has not been seen for the last few weeks. A lack of volume has assisted in support levels holding and any increase in volume may see the bulls resolve tested,
Bears had another attempt at ending the rally. Volume was low on the dips and supports held. The stop for next week is 5286 and the short term daily indicates this level should be tested early in the week. A close below 5286 next week will be the start of a long awaited downtrend. Downside target is 5221 then 5119. A break of 5119 will lead to a rapid sell off – Flash crash.
iQUANT FORECAST RANGE 5119 – 5400
PIVOT POINT 5286
ACTUAL 5191 – 5271
iQuant highlighted the market was overbought above 5300 for the past fortnight and we waited for supports to fail. As predicted the short term weakness hit the market on Monday. The market broke the weekly pivot point at 5286 and fell to the monthly 5200 support.
A short squeeze occurred on Thursday as predicted in our daily morning report. The 15th week of the uptrend was the last of a very long and positive trend. This week provided a SELL signal and shorts have been entered. The market finished down 104 points for the week. Volume continued to be low and Friday’s market action and volume confirmed a lack of interest.
Short term daily and the medium term weekly closed on a downtrend. The monthly outlook for October sees the monthly on a downtrend. This is the first time since May 2013 that all three timeframes have been on a downtrend. The SP500 is testing a critical level at 1678 and a close below this level on Friday will put the SP500 weekly on a downtrend. The AUDUSD drifted between 0.93 and 0.94 as expected.
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ASX200 report tracks the December ASX200 SPI. The ASX200 index is currently trading at a 5 point discount to the futures. All levels in this report refer to the ASX200 SPI futures
The information contained in this communication is general information only. Any advice is general advice only. Neither your personal objectives, financial situation or needs have not been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice. Iquant Systems Pty Ltd (CAR No.435627) is a corporate authorised representative of Avestra Capital Pty Ltd (AFSL No. 292464).
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