- S&P500’s uptrend is still intact. 1,850pts is the key support level.
- Dollar Index should peak in 1Q16 and trade sideways in 2016.
- Crude oil prices should also bottom, in line with the likely Dollar Index US$ peak in 1Q16.
- Gold prices showing potential bullish wedge formation. Prices should bottom soon.
- Asia’s equity market is still in a rebound phase but could see new lows in 1Q16 before it finally bottoms.
S&P500 still in uptrend
S&P500’s rally last Friday tells us that the immediate-term trend is upward for US equity
markets. A weekly RSI breakout above the resistance trendline should be a mediumterm
bullish sign for the S&P500. A key long-term support is at 1,850-1,860 levels.
Dollar Index peak in 1Q16?
We are looking for the Dollar Index to peak sometime in 1Q16. If we are right, this
should be followed by sideways consolidation for 6-12 months. Crude oil prices should
bottom sometime in 1Q16.
Gold in bullish wedge formation?
Gold’s weekly chart is showing the formation of a potential bullish declining wedge since
end-2014. Prices could see a little more downside first but we are close to a major
bottom. Weekly MACD and RSI are showing potential positive divergence signs.
One more downleg for Asia in 1Q16?
The MSCI Asia ex-Japan Index (MAxJ) should see another leg down after completing an
‘a-b-c’ wave rebound since the recent Oct bottom. This will be in line with our wavecount
for the Dollar Index peaking in 1Q16. Singapore’s STI and Indonesia’s Jakarta
Composite wavecounts are similar to the MaxJ’s.
Malaysia’s FBM Small-Cap still looking positive
The FBM Small-Cap Index is facing resistance at the 40-week SMA (15,747) and it is
possible the index will test the resistance-turned-support trendline at 14,800-14,900
levels over the next few months. The MACD and RSI resistance trendline breakouts are
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