The week just passed was one of the slowest week. On my blog on August 19th, I had posted the possibility of one scenario which could play out. I mentioned the following:
“S&P takes out 1422 this Monday and heads toward 1430-1435 (that is very close to the target of 1435-1440) and then pulls back to 1390-1396 level and then start rising upward again and moves towards 1445 by Labor day holiday.”
On Friday August 17th S&P had closed at 1418. On Tuesday August 21st, S&P made intraday high of 1426.88 and then started pulling back. On Friday, August 24th, S&P made a low of 1398 and closed at 1411.13
It is now logical that S&P must take out 1422 again this week and not only take out 1422 but must go above 1426.88 (the high made on August 21st) and close. After conquering 1426.88 then S&P will head towards the target range of 1435 – 1440. It can go as high as 1445 though. There is a bullish sentiment this week due to Jackson Hole meeting on August 30th and then usual buying and selling just before the Labor Day Weekend. Market will be closed on Monday – September 3rd.
NASDAQ 100 resistance is at 2810-2815.
One thing to note is that Chinese Market which has been going down since May of this year is finding double bottom support. This could also be a catalyst for US Market to move up. European markets are also moving up, however, last week they went nowhere just like in USA.
If S&P closes above 1440 and NASDAQ 100 above 2815 by August 31st, then these markets will trigger higher targets for the year end. S&P target would be 1480-1500 and NASDAQ 100 target of 2965. There is a chance, however, that market may see pullback just after Labor day holiday. Historically, during Presidential election year market is bearish from Labor Day holiday to Columbus day. Will this happen during this year’s election?
As we know Gold had been consolidating for last several months and was going nowhere. Last week Gold moved up aggressively. From seasonality point of view Gold starts to move from September, with a dip in October and then continue rising upward till late Spring. Then summer doldrums kicks in for Gold. The immediate target for Gold is 1685-1690. If Gold closes above 1690 then it will head towards 1735 which is a major resistance. Silver resistances levels are $31.60, $32.80 and $34.25. The support for Silver is at $29.50. Charts for Gold, Silver and Gold Bugs Index ($HUI) are shown below:
To understand Gold Bugs Index $HUI please visit the following link on the blog: http://financialmarketswizard.com/archives/1951