Gold: Gold made a low of $1672.90 last week, a little above its 200 DMA, which was then positioned at $1662, to close the week at just under its 50 DMA at $ 1730.30. The pullback from the recent low of $1672.90 is reactive in nature. Gold could to above $1700 but below its 50 DMA for the next week or two before retesting, and possibly breaching its recent low. The long-term correction in gold from its $1920 peak is not yet over.
Silver: Silver, like gold, bounced back from its 200 DMA closing the week at $32.56 after having made a low of $30.67. The pullback appears reactive in nature and may not top the 50 DMA significantly. Expect a retest of $26 area before a tradable rally ensues.
WTI Crude: WTI Crude made a low of $84.05 during the week before staging a pullback and closing the week at $86.07. The weekly crude chart above shows crude to be in a terminating C with a target $76. It will take 2 to 3 weeks to get to the target.
US Dollar: Reproducing last week's chart for the US dollar that showed the Dollar Index headed up towards 81.20. DXY closed the week at 81.09 after having made a high of 81.175. The DXY has a very strong overhead resistance at 81.50 following the immediate one at 81.20. I expect the Dollar to turn down from the 81.50 region as the correction from recent top of 84 is not yet complete.
Minor reactive pullbacks could see the Euro$ retest the overhead resistance at 1.2800 over the next week before proceeding towards 1.26. A fall to 1.26 from current levels before a rally can't be ruled out either. Note, 1.26 is just a support.
With this rally in place, my preferred wave count is shown in the chart above. Clearly, this wave count indicates a retest of the INR 57 level in due course. Note, the $ has a strong resistance overhead at 55.75. Should the $ pierce through this level, the probability of a retest of 57 region becomes most likely.
NASDAQ Comp: NASDAQ Comp closed the week at 2904.87. The index is due for a pullback from current levels that could hold a few surprises. The big question before traders is to decide if the current fall to 2850 is a wave 4 with wave 5 up yet to come or the next pullback will fall short of the previous top and the fall will continue on to 2700. Short-term wave counts favour a pullback all the way to 3200 although; the index could fall short of the target. Not exactly bullish on the NASDAQ but expect a pullback.
S&P 500: What applies to NASDAQ Comp, applies to SPX as well. The current fall to a low of 1373 just atop the 200 DMA could turn out to be a wave4 correction with a wave 5 to follow towards the top of 1475. It isn't certain though. What we can expect is a pullback from current levels and the strength of that pullback will tell us if we have a wave 5 or just wave 2 up following the fall from the recent top of 1475. Either way, a deeper correction is sure to follow.
CNX NIFTY: NIFTY's current stance is very similar to that of SPX and NASDAQ although the structure of wave counts is very different. After making a high of 5815, NIFTY has made a low of 5583 [ignoring the mini-crash low of 4888.20 on October 5]. It is currently on a pullback from there and the target of the pullback could be previous top of 5583 or even higher.
However, a higher high from this rally will not negate a deeper correction to follow sometime in December. Terminating C waves can be very violent and erratic and there is nothing to indicate that we are not in one so far.
NB: These notes are just personal musings on the world market trends as a sort of reminder to me on what I thought of them at a particular point in time. They are not predictions and none should rely on them for any investment decisions.
Sonali Ranade is a trader in the international markets