Weekly Review. S&P500, Brent, gold | 17 March 2017

S&P500

Monthly chart: there are signs of oscillator divergence, which matches expectations of index weakening in weekly upper Bollinger band region (2414.6), so we may look for possible downward signals in this region. It is also worth to mention February upper Bollinger envelope breakout and growing ADX. That causes difficulty in making forecasts at the moment.

Weekly chart: ADX and RSI are at their extremes, so resistance level at 2414.6 (upper Bollinger band) can be considered very strong. Support levels at 2358.7 and 2249.1 may be potential correction targets.

Daily chart: on the local chart we see that ARX/RSI are ready for reversal, so we may expect reversal to the downside from 2399.0-2414.6 area towards 2358.7 and 2317.6 (middle and lower Bollinger bands)

Expectations: we expect the price to touch 2399.0-2414.6 region and then decline to 2358.7 or, maybe, lower 2317.6.

Solutions:

1. Consider buying to 2399.0-2414.6

2. Consider selling from 2399.0-2414.6 to 2358.7 or 2317.6

Brent

Monthly chart: as expected oil is not capable to increase yet, as there was not even upper Bollinger band breakout (60.77), and we are observing how bears during the small period of March have completely undermined all the February bullish achievements, although ADX doesn't show trend reversal, so there is no reason to expect decline yet. Wait and see how the price would behave at support level of 48.79 (middle Bollinger band) which protects the chart from drop to lower Bollinger envelope towards 34.97.

Weekly chart: here we have middle Bollinger band breakout, nothing stops the price from dropping towards 45.99 (lower Bollinger band)

Daily chart: three pinbars beyond Bollinger envelopes indicate upcoming correction. However, bears still have a chance to touch 48.79 region before rollback to the upside.

Expectations: continuing drop to 48.79 possibly followed by correction to the upside.

Solutions:

1. Consider selling to 48.79

2. Consider buying from 48.79 (in case of upwards signals in this region on the daily chart).

Gold

Monthly chart: gold keeps rotating around middle Bollinger band (1215.13) and it's likely to continue rotation.

Weekly chart: on this chart we may see smooth decline towards lower Bollinger band (1121.99), as ADX is falling.

Daily chart: here we have aggressive ADX that doesn't make trading easier, as it is unclear whom it supports. Bears are active, however, bulls managed to leave some pinbars beyond lower envelope, so we may see bullish rollback towards middle Bollinger band (1231.81)

Expectations:

First scenario - continuing decline to 1180.38

Second scenario - upward correction to 1231.81

Solutions: set-up is not good for trading and scenarios are equally possible. We would recommend either refrain from trading or look for one of the scenarios signals on smaller charts to enter the market.