ca technically us indices and commodities 29-09-2010

8/8/2019 CA Technically Us Indices and Commodities 29-09-2010

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WEEKLY UPDATE29 September 2010

Disclosures available on www.cheuvreux.com www.cheuvreux.com

TECHNICALLYSPEAKING

US Indices and Commodities

S&P-500 Index

NASDAQ COMPOSITE Index

Brent Crude Oil

CRB Index

CRB Non-Energy Index

Edouard Garrana +33 1 41 89 73 [email protected]


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29 September 2010 Technically Speaking

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COMMENTS ON THE S&P-500 INDEX as of 29-Sep-10

the long-term view: the S&P-500 index rallied and almost reached the ideal 1,250 objective of the bullish H&S pattern posting a top at the 1,220 level on April. The profit taking triggered a panic situationunfolding in complex ABCDE pattern. The overall weakness was supported by the Februarys low and the38.2% retracement level and bounced up.The common 4-Year Low-to-Low Cycle favoured July as a potential basement or/and the monthof September as an extreme period to end the profit taking or the congestion phase. The month of

July proved to be the low of the correction. In addition, the 1 September was also a second and probably the last down-leg of this congestion phase followed by a steep rally.

The weekly momentum turned positive resuming the uptrend. the short/medium term view : the S&P-500 index has almost reached the ideal objective of the H&S

formation and reversed direction down from the projected April timing signalling an intermediate top. Therally has lasted 14-month in time duration. The corrective phase dropped by 17% and unfolded incomplex ABCDE pattern lasting 2.2-month in time duration.We remind you that the weekly momentum indicator turned positive. moreover, the S&P-500 indexbreached the neckline of the Head-and-Shoulder formation confirming additional strength ahead.The market broke the top posted in August and making now higher highs and higher lows. All theabove positive triggers could bring back the investors into the stock market, favouring theresumption of the main uptrend.

Therefore the short-term correction could witness some profit taking and would be limited in timeand price action. The neckline of the H&S will hold the pullback at the 1,108-1,122 strong supportwindow.However as long as the momentum indicator is supporting the progress, we expect the S&P-500index to move towards 1,175-1,185 target window or even higher towards the top posted this yearwithin 1,220-1,240 target window.The Institutional Investors Survey voting period has started. If you appreciate our analysis, please votefor us. Timing : the next timing for a directional change points to end-September. The current rally couldprobably persist lasting until mid-November timing.

Resistance 1,156-1,162 strong 1,178-1,182 strong 1,220-1,240 strong Support 1,116-1,125 strong 1,088-1,095 strong 1,036-1,040 strong

The timings for a directional change are (change in trend 1 day)

30 Sept. 1 Oct.(key) 17-19 Oct.(key for a low? ) 15-17 Nov.(key for a high? )

see charts next pages


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DAILY CHART: S&P-500 INDEX

July August September November 2010 February March April May June July August September Novem

0-10

010203040

the weekly MACD turned positive

Weekly MACD on daily chart (-0.97536, 5.80286)

0 0

buy trigger

900

950

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1150

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complex correction in ABCDE (completed!)

neckline of H&S

(3)

5-wave ended in April followed by profit taking.The correction has completed near the wave(4)retracing 38.2% of the prior upmove!

12-M avg.

3M avg.1M avg.

(4)

(5)or(3)

(2)

(a)

(b)

(c)

(d)

(e)

DAILY CHART SINCE 2007 AND THE 200-PERIOD MOMENTUM INDICATOR

t Nov Dec 2009 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Feb Mar Apr May Jun Jul Aug Sep Oct

-50-40-30-20-10

010203040506070

-50-40-30-20-10

010203040506070

long-term Momentum Indicator

overbought zone

eased overbought conditionby moving to the zero line

N

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0.0%

38.2%

100.0%

12month-MA

necklinebounced from RET(382)

potential uptrend channel

the H&S objective almost reached+RET(62%)


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COMMENTS ON THE NASDAQ COMPOSITE INDEX as of 29-Sep-10

DAILY CHART: NASDAQ COMPOSITE INDEX

Septem ber October Novem ber Decem ber 2010 February March April May June July Augus t Septem ber October Novem

0

50

100

0

50

100

the weekly MACD turned positive

Weekly MACD on daily chart

0

5

0

5

exp

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3M

12M avg.

(3) or (5)?

(a)

1M

(b)

(c)

(d)

(e)

neckline

correction completed in ABCDE

positive H&S pattern confirmed

prior low=support

The weekly momentum is bullish combined with positive pattern!

the Nasdaq composite index has reversed direction down from the channels resistanceand the forecasted late-April timing signalling an intermediate top. The profit takingunfolded in complex triangle formation. The overall correction dropped by 18.7% andbounced up from the channels support and the 38.2% retracement level (see chart).

We remind you that the weekly momentum indicator turned positive. In addition, theNasdaq composite index confirmed a bullish Head-and-shoulder formation. Thesefacts could help bringing the investors back to the stock market.However, any potential weakness towards the support of the neckline could be usedfor long trade. Therefore the correction could be limited in time and price and has toholds above the neckline of the H&S formation at the 2,225 level close. We expectthe Nasdaq composite index to move towards the minimum target at the 2,435-2,455window and extreme towards the 2,500-2,535 window.

Timing: The projected 25 August timing halted the weakness. The next timing for adirectional change points to 30 Sept. - 3 Oct.


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COMMENTS ON THE BRENT CRUDE OIL as of 29-Sep-10

DAILY CHART: BRENT CRUDE OIL

ec 2009 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Feb Mar Apr May Jun Jul Aug Sep Oct Nov

-35

-30

-25

-20

-15

-10

-5

0

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100-MA1M

uptrend line

200-MA

RET(38.2%)

The sideways continues!

the Brent crude oil has reversed direction down right at the forecasted mid-May timing.The corrective phase or the pullback has been completed right at the projected mid-Julytiming. The prior swing low held well the correction and offered a tactical buy.The uptrend line triggered a bounce. The positive momentum indicator is supportingthe progress. But the rally is lacking upside strength.

As long as the trend is supported by the uptrend line, the market could retest theprior swing top 82.85. The current rally is limited in time duration and would last untilend-September/earlier October then followed by correction.The medium-term picture looks stuck in a broad congestion phase.

Timing: the low posted in July would trigger a potential top during the monthly ofSeptember followed by profit taking. Therefore, the timing for a directional changepoint to end-September/early-October for a potential top then down.


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COMMENTS ON THE COMMOSITIES CRB INDEX as of 29-Sep-10

DAILY CHART: COMMODITIES CRB INDEX

2009 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Feb Mar Apr May Jun Jul Aug Sep Oct Nov

-10

-5

0

5

-10

-5

0

5

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50.0%100d-MA

the low posted in January 2007 capped

200d-MA

neckline of potential H&S

N

Well supported with no follow-trough the broad congestioncontinues!

The CRB index breached the support of the long-term moving averages. The pullbackwas supported by the 50% retracement level and bounced up.The momentum indicator turned positive resuming the uptrend. As long as the

momentum indicator is oriented north and the CRB index holds above 260 levelclose, the index could move again towards USD282-288 window.However and in order to resume the main uptrend, the CRB index has to breach thetop posted in December 2009 on consecutive higher closes. On the contrary, weexpect the market to stay in congestion phase.

Timing: The next timing for a directional change points to early-October.


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COMMENTS ON THE COMMOSITIES CRB NON-ENERGY INDEX as of 29-Sep-10

DAILY CHART: COMMODITIES NON-ENERGY CRB INDEX

Dec 2009 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 Feb Mar Apr May Jun Jul Aug Sep Oct No

-15

-10

-5

0

5

-15

-10

-5

0

5

buy trigger above zero line

165170

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Major uptrend channel

200-MA

100-MA

50-MAbounced from RET:38.2%

bullish breakout

The main trend is up, buy on dips.

the commodities CRB non-energy has been trending within a major uptrend channel.The buy trigger on the momentum indicator has resumed the main uptrend.

As long as both the prior swing low holds at the USD240.00 close, the CRB non-energy could move towards the resistance level of the uptrend channel within 275-280 target window or higher towards 287-290. The rally could persist until midDecember timing.

Timing: We expect the index to rally until mid-December timing. However, we donot exclude earlier high by early-mid November.


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ca technically us indices and commodities 29-09-2010

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