Saturday, November 27, 2010

Weekly Forecast - Nov. 28th

Markets experienced some sell off last week check out how it ended in the Weekly Digest.  Markets experienced a lot of weakness and we could see that carry into this week.

Taking a look at the charts...
S&P 500
The S&P 500 is currently bouncing on the line of indecision as the bulls and bears fight it out.  The bulls need to claim the 1200 price level before moving this market further up.  The bears need to claim the 1173 price level to finally put in a lower-low.  The SPX has already pushed below the upper trendline.  If we do see a push down we could see support in the 50 day moving average.
S&P 500 (hourly)
Here is the hourly chart to just show after the trendline break how we have created a choppy market.  You can see the 1200 resistance that was put in and the constant selling off at that point.
We had some major weakness out of the EUR/USD currency pair when it broke through the upper trendline.  This is a bad sign for the bulls as the USD has been leading the run up in prices.  We now have the currency pair trading in a downward channel.  Except more downside until we see support at the 1.31044 fibonacci retracement which is also around the 200 day moving average. 
The pound/dollar pair saw a lot of weakness when it broke down below the upper trendline and the 1.58 support level.  The pair could see some support around the 1.552 level but it won't gain major support until 1.53.  This is also the around the 200 and 150 day moving averages.
The USD/JPY pair saw a big break though from its consolidation level.  It was able to break through the fibonacci retracement and could now move onto the 84.77 price level.  A break through of this level would put the 85.80 level as the next resistance.
Here is the UUP chart showing the bullish dollar fund.  As you can see it finally retraced back up to the breakout level.  A break of this level would be further weakness for the bulls.  There is a chance we could see a bounce back down to lower levels, and this chart will be key to watch this upcoming week.
Here is the weekly NYSI indicator still showing a down trend.  This is the NYSI overlayed with the slow stochastics that has been key in calling the reversals.  We need to wait till the lines reach the extremes and cross to head back before going serious long.

We have a bunch of economic reports coming out this week.  Here is a short breakdown of the reports (more detail in Morning Madness reports)

: Nothing major due out
Tuesday: Home Price Index, Consumer Confidence, and Ben Bernanke talks
Wednesday: Employment Report, Productivity, Mfg Index, and Construction Spending
Thursday: Jobless Claims and Home Sales
Friday: Employment Situation

There is some support in the markets but the weakness is still strong in most charts.  A further downside move should be expected for this week.  I would wait till we move into the week before going long.  There could be some good setups coming out of this week.

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