Australia | Dec 16 2013
The weekly closed last week on a downtrend for a fourth week. The market had another volatile week with a range of 178 points just below the previous week’s 200 point range. iQuant predicted weakness and a target at 5092 and it is exactly what happened. Our downside targets from 31 October of 5220 and 5125 have been exceeded and we look to this weeks target for the next downside targets, December futures expire 19th December and volumes continue to increase as funds are rolled to March 2014. We continue to expect weakness and the weekly chart shows support down to 4907 and a break of this level will see the market oversold for a third week in a row and may lead to a flash crash. The weekly downside target continues to fall with a test of 5000 expected. We continue to expect new short term lows to be set on the way to our weekly target at 4907– down from 5092 last week.
The daily short term shows a stop for Monday at 5137 with the weekly stop at 5084. Volumes are increasing as sellers are now increasing and looking for support. 5092, 5125, 5157 and 5210 are the key resistances for next week; A close above 5084 at the end of the week will reverse the four week long downtrend. iQuant indicates short positions with a stop at 5084. The weekly chart shows support at last weeks lows near 5037 and we expect the market to retest the lows and set new lows for the Quarter. iQuant indicates weekly downtrends on 9 of the top 10 ASX stocks, WPL is the uptrend.
AUDUSD has failed at resistance and is trading under 0.90. The yearly low at 0.886 is a key level for any support. SP500 will move to a new weekly downtrend with a close below 1798.5 on Frdiay – market has managed to rally at the end of each week to maintain the uptrend for the last month and a change of trend now looks likely. Refer to website for all reports including whether SP500 has hit a peak.
Bulls are capitulating fast with expiry aiding their exit. Daily for Monday shows a short term stop at 5137 and Bulls will need a close above 5137 on Monday to regain control. Bulls need to continue to be patient and wait for a confirmed bottom before entering longs. A close above 5084 at the end of the week will regain an uptrend for the Bulls.
Bears have now secured a big fall. Weekly downside target at 4907 and last weeks low near 5037 are the key supports to be broken this week. Bears have good stops in place and watch the short term daily report for signs of a bottom. Congestion can be seen between 5037 and 5095 and a move outside this range will be a key to the medium term trend A close below 5084 will hold the downtrend and short positions.
THE DECEMBER 2013 FUTURES CONTRACT EXPIRES ON THURSDAY – IQUANT WILL MOVE TO THE MARCH 2014 CONTRACT AFTER THURSDAYS EXPIRY. TRADING FUTURES DURING EXPIRY PHASE IS VERY HIGH RISK.
iQUANT FORECAST RANGE 4907 – 5209
PIVOT POINT 5084
Review of prediction from 6th December 2013 for last week
The weekly closed last week on a downtrend for a third week. The market had its biggest weekly fall since June 2013 with a 200 point range. iQuant predicted volatility and a test of 5200 and it is exactly what happened. Our target from 31 October of 5220 has been met and we wait for a bottom and capitulation of the bulls. December futures expire 19th December and we expect volumes to pick up at the end of the week as funds are rolled to March 2014. With two full trading weeks left for the year the market is currently up 12.5% for the year and traders will be looking to lock in profits. Downtrends can be seen on all three timeframes. We continue to expect weakness and the weekly chart shows support down to 5092 and a break of this level will see the market oversold and may lead to a flash crash. The weekly downside target continues to fall with a retest of 5200 expected. We continue to expect new short term lows to be set on the way to our weekly target at 5092 – down from 5246 last week.
The daily short term shows a stop for Monday at 5205 with the weekly stop at 5255. The December downside target at 5217 has been hit and is now important resistance. Volumes are increasing as sellers are now increasing and looking for support. 5217 and 5255 are the key resistances for next week and any test and break of this level will reverse the weekly downtrend. A move above this level will indicate another short squeeze and a retest of 5465 highs.
iQuant indicates short positions with a stop at 5255. The weekly chart shows support at last weeks lows and we expect the market to retest the lows and set new lows for the Quarter. iQuant indicates weekly downtrends on 9 of the top 10 ASX stocks, RIO is the uptrend. AUDUSD has found short term support at 0.90 and a bounce to medium term resistance is anticipated. SP500 survived a sell off and break of the weekly uptrend below .1800 and a bounce from support at 1780 saw the uptrend hold for a 5th week in a row. Weekly stop for SP500 for next week is 1798 and is a key level to watch for the week. Refer to website for all reports including whether SP500 has hit a peak.
Bulls are starting to capitulate and finding bids thin. Daily from Monday shows a short term stop at 5205 and Bulls will need a close above 5205 on Monday to regroup. Resistance remains at 5217 and 5255 and Bulls need patience and wait for a confirmed bottom before entering longs. A close above 5255 at the end of the week will regain an uptrend for the Bulls.
Bears patience has been rewarded as the predicted increase in volume has come on the sell side. Weekly downside target at 5092 and last weeks low near 5150 are the key supports to be broken this week. Bears have good stops in place and watch the short term daily report for signs of a bottom. Support can be seen between 5154 and 5184 and we expect bids to be found at this level A close below 5255 will hold the downtrend and short positions.
iQUANT FORECAST RANGE 5092 – 5365
PIVOT POINT 5255
ACTUAL 5028 – 5206
“With two full trading weeks left for the year the market is currently up 12.5% for the year and traders will be looking to lock in profits – expect weakness and the weekly chart shows support down to 5092 and a break of this level will see the market oversold and may lead to a flash crash. .” – Another good week for the bears and iQuants weekly outlook from last week predicted the price action and levels precisely. Traders moved to lock in profits and look ahead to next year. The high for the week was 5206 below the iQuant weekly stop at 5255 and the market sold off as predicted. The weekly target at 5092 was hit on Thursday and a mini flash crash occurred as Bulls got taken out. The market was oversold in the medium term under 5092. A bounce on Friday saw the market reverse from oversold closing just above the weekly lower range. iQuant Trader’s Notes provided 1 trade which was profitable (40 points) with a short on Mondays open – traders who held for the week from the 5190 entry reaped a 140+ point return. December futures expiry next Thursday made intraday trading high risk and Traders notes did not provide any suitable trades for most of the week,
iQuant continues to indicate a downtrend for the market on all three time frames. Our medium term target at 5092 has been exceeded and we see a possible bottom forming in the markets below 5100. Further capitulation of the bulls may be required with a retest of recent lows before the market turns. Medium term weekly traders are short from 5340 plus and the risk management and stops are working well,
We continue to expect weakness as the market searches for support. The VWAP on the futures for the week was 5110 down from 5251 the previous week. Bulls are looking for support which is yet to be found. Volumes are high due to futures expiry on Thursday 19th December 2013.
Log Into http://www.iquantsystems.com to view real time reports on ASX top 20, international indices, currencies and commodities.
ASX200 report tracks the December ASX200 SPI. The ASX200 index is currently trading at a 0 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).
Copyright © 2013 Iquant Systems, All rights reserved. Re-published with permission.
Technical limitations
If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.