[2014] Derivatives Market Outlook] Still Bullish, Don’t Stop the Party

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year-fcpo-2014-weekly-outlook2014 is around the corner and we are still bullish on the financial markets since 2012. Don’t stop the party. Let us study their weekly charts shall we? 

DOW JONES INDUSTRIAL AVERAGE –Yankee Bulls Still In the Dow

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Contrary to popular belief, the Dow still poised to continue it’s 2014 yearly bull run. This is simply because the Dow is still trading above 14,413 support zone (red moving support). In addition, the Dow will continue to trend higher especially when Weekly MACD also showing short term price rally signal.

That being said, there will be ups (rallies) and downs (corrections) in any market. If the Dow is tired and ONCE Weekly MACD forms a price correction signal, it could have a price correction to the around 15,114 support zone. A healthy market correction to around 14,413 could happen if 15,114 support zone is also violated. Keep in mind, the Dow will still be in a yearly bull run mode as long as it is above this 14,413 support zone (red moving average).

S&P 500 –The Bull Party Goes On

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The bull party goes on for the S&P 500 throughout 2014 based on the fact that Weekly MACD still showing price rally signals and prices are trading well above 1,574 support zone (red moving average).

Eventually when the S&P 500 is exhausted and needs rest, it could have a price correction to around 1,669 support zone (yellow moving average). Further healthy price correction could occur if the market managed to break 1,669 support. But keep in mind, the bullish S&P 500 party goes on as long as it is still trading above 1,574 support zone (red moving average).

NASDAQ Composite -Back to 5,000

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The Nasdaq will continue to trend higher throughout 2014 because weekly chart still showing short term price rally signal (refer Chart 3 above). Besides that, for 2014, we could see prices trading back to it’s historical high of 5,048, which was last recorded during the dot.com bubble.

In contrasts, when Weekly shows price correction signal, the Nasdaq could have a correction to around 3,643 support zone (yellow moving average) and a healthy correction to 3,408 (red moving average) if prices unable to stay above 3,643 support zone. Keep in mind, the Nasdaq Outlook for 2014 is still bullish and will rally around 5,000 as long as prices are trading above it’s 3,408 (red moving average).

NIKKEI 225 -Abenomics Will Destory 18,275 Resistance

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Armed with Abenomics, the Nikkei 225 entered it’s first year of long term bull run on Feb 2013. Likewise, the Nikkei will continue to trend higher throughout 2014. In addition, the Nikkei could easily break 18,275 resistance zone with Abenomics’ massive economic bazooka.

However a bullish market will have it’s price correction and when it happen, the market could have a correction to 13,805 support zone. If prices could break 13,805 support zone, the next support zone will be around 12,647 (red moving average). However, do remember that Nikkei is still bullish throughout 2014 as long as it is still trading above 12,647 (red moving average).

KUALA LUMPUR COMPOSITE INDEX FUTURES –Like it or not, 2,000 is coming

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Like it or not, our FKLI is entering it’s 3rd year of bullishness and it will rally to around 2,000 by end of 2014. This is because the market had broken thru it’s 6 month old 1,834 resistance zone on December 2013. Consequently we could see the market to continue to trend higher throughout 2014 especially when it’s weekly MACD currently still showing price rally.

In contrast, when price correction signal do appear, FKLI could have a price correction to 1834 support zone. If 1,834 support zone is also broken thru, do not worry as the market just having a healthy correction. The FKLI is poised to reach around 2,000 by end of 2014 as long as it is still trading above 1,756 (red moving average).

CRUDE PALM OIL FUTURES –New Year, New MAD Trend, 3,450 Is Not A Problem

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New year and new MAD Trend for our FCPO as it is entering it’s 1st year of Bull run in 2014. Consequently, FCPO could easily break 2,695 zone and rally to around 3,450 zone by year end.

In contrast, if price corrections signals do appear in weekly chart, the market could have a correction to either 2,521 or 2,500 support zones (yellow & red moving averages respectively). That being said, FCPO is in a MAD BULL MODE in the long run and is poised reach 3,450 resistance zone as long as it is still trading above 2,500 (red moving average).

NOTE: 

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Above is a basic description of what a general yearly bull or bear market behaves. In a yearly bullish market it’s rallies will be larger whereas corrections will be smaller. In contrast, a yearly bearish market it’s corrections will be larger where as rallies will be smaller.

DISCLAIMER The opinions and information contained herein are based on available data believed to be reliable and for educational purposes only. It is not to be construed as an offer or solicitation to buy or sell the securities covered by this report. No individual financial strategy or goals have been taken into account in the preparing of outlooks. Readers should seek independent advice from author for detailed analysis and strategies.

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David Lee

(Futures commission broker & equity remisier, Contributor of futures market trend following)

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