Technicals | 10:30 AM
Earlier today, Tony Sycamore, Market Analyst, IG updated his views and thoughts on financial markets, including technical analysis.
All material has been re-published with permission and does not by association represent FNArena’s views (we have none, we simply report).
First Up, Nasdaq100
The rally from the September 22,977 low is viewed as an extending Wave V from the April 16,542 low.
Within our preferred Elliott Wave framework, once a five-wave advance is complete, the expectation is for a correction to commence.
An initial indication that a Wave V advance is complete and that a correction has begun would be if the Nasdaq100 were to see a sustained break/close below short-term support at 25,000/24,800ish.
This would likely then be followed by a deeper pullback towards a band of support between 24,200/23,950.
Aware that while the Nasdaq100 holds above short-term support at 25,000/24,800ish and medium-term support at 24,200/23,950, allow for the uptrend in the Nasdaq to continue towards a revised upside target of 27,000.
ASX200
Yesterday’s break of support of our short-term support at 8990/8970ish was a negative development, which leaves the ASX200 vulnerable to a deeper pullback.
Short term support is viewed at 8850/40ish coming from the mid-October 8843 low, and trend channel support 8850ish.
Aware that a sustained break below here would open the way for a retest of the 8730/8630 support region, coming from the lows of July and August.
Crude Oil
WTI Crude Oil is trading marginally higher at US$60.36 (up 0.32%), as crude oil inventories in the US fell by a larger than expected -6.858m barrels.
Its rise was also supported by reports that US sanctions have resulted in a tanker carrying Russian crude oil to India to return to the Baltic sea, providing evidence that new US sanctions are proving somewhat effective.
We are currently holding a neutral bias in crude oil, needing to see a sustained break of US$63.00ish to signal that the rebound from last week’s US$55.96 low can extend towards the next layer of resistance at US$65.50/US$66.50, which includes the 200-day moving average.
Gold
Gold is trading lower at US$3944 (-3.22%), poised for a sixth day of losses over the past seven session.
Despite this and the inclement weather in Sydney yesterday, we were impressed to see a queue of buyers lined up out the door of Sydney’s ABC Bullion Exchange, which suggests there remains good interest in buying the dip in gold.
Technically, we view the break of support at US$4000 earlier this week as a warning that a deeper pullback has commenced towards US$3500, which would be a clean -20% pullback from the US$4381 record high.
Technical limitations
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