Deciding factor reached for Stock indices and Gold

This week has seen some choppy price action creating a difficult trading environment for trend traders. However intra-day traders have enjoyed the volatility whilst being able to capture short term swings within the larger fluctuations. Currently the stock indices have reached technical decision levels which should provide an opportunity to see either a trend continuation to the upside or a reversal to the downside going into next week. However the alternative scenario is that the indices continue choppy activity for a few weeks before seeing a further sharp reversal to take the markets lower again in line with the longer term trend. See key levels below:  

FTSE 100 unsure at 5500 level

For several days now the FTSE 100 index has attempted to get above the 5500 level without much success. If the index manages to break through then it will have to face the 5595 target to prove it has the strength to continue its short term bullish bias. The support level at 5250 has helped the bulls to provide a base to work from. Heading into next week the index will need to maintain a hold above 5380 to confirm the test of upper levels. Right now the index is at a minor decision level and will need to show its hand by either breaking above 5500 or below 5380 to lead the way for next week.

FTSE 100 Daily

Dow Jones tests 12680 level

As expected the Dow Jones has now reached the 12680 level. If Friday sees a close above this target then the index is likely to reach 12835. Pattern traders will note that there is a minor bullish head and shoulder pattern developing that may assist in lifting the index higher. We also have a bullish blue bar setup also suggesting a move higher. But the weekly charts remain in a bearish trend and this move may just be a corrective bullish move to set the stage for further sell setups over the coming weeks. Next week should provide further volatility and offer good trading opportunities.

Dow Jones Daily

Gold looking to retest $1630

We can see that Gold has tested the $1630 level and failed to get above this resistance level this week. Short term the metal has provided bullish blue bar setups. If the trend is to continue higher then Gold will need to clear past $1630 – $1660 by next week. Momentum needs to stay bullish otherwise the commodity may turn bearish again only to fall back down to the $1525 level. The $1560 short term support level must remain intact to lift prices higher. A failure to hold support would only help the bears to push the bulls aside and see the $1525 main support being tested again. Above $1660 we have $1725.

Gold Daily

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