With the US Federal Reserve much more hawkish than expected, this week looks to be a further round of musical chairs as investors figure out where each central bank stands – ahead of the Fed, or dovishly far behind it. Expect volatilty in gold, and in AUD this week.

Will prices of Gold rise? Track Gold with us:

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Call Levels users think that AUSUSD will drop past 0.712. Track with us:

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Will prices for WTI Oil continue to rise?

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Trading updates

US stocks continued their advance reaching the 2100/2105 level where a consolidation of some sort is likely to take hold from here. Not much to add for now, with the market likely to wait till after Friday’s non farm payroll report to decide it’s next move. Going by the initial jobless claims so far though, it is likely the number should be a pretty strong. We think that the green path continues to be the likely the path playing out and that the coming consolidation and correction should go to around 2040/60 before continuing to advance. A break below 2040 and the 2000 level could be a warning something more bearish is playing out.

Watch SP500 at 1570


SP500 @ 1570

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Red: The Index goes to 2100/05 and falls to test the 1700s with a potential to extend to the 1570s. This would still not invalidate a longer term bullish scenario, with the bounce that follows likely a determinant of the longer term trend direction.

Watch SP500 at 2200


SP500 @ 2200

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Green: The Index goes to 2100/05 before declining. The Index should stay above 1940 before moving onto new highs in the 2200-2300 region as illustrated in the longer term chart.

Stock pick of this week!

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For this week’s Stock Pick, we are looking at a potential Short Position on GS-NYSE. Goldman Sachs Group had a reasonable earnings announcement mid October which helped lift its Stock price away from $168 low at the end of September. There is so much news that comes out for GS-NYSE, including investigations into Fraud in Malaysia and the fact that it has under performed in the Financial Sector this year means the overall Bearish Trend that started in June 2015 could well take over again.

Watch $GS Target Price at $152.00


$GS @ $152.00

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Technically this pull back during October is a classic Elliot Wave 4 pull back with its peak finding resistance just under the $192 price, 89 Day Moving Average and the 0.5 Fibonacci Retracement level taken between the extremes of Wave 2 and Wave 3. This resistance level is also a previous resistance level during the Wave 3 when the Stock price went into a corrective phase and is backed up by my TJ’s Ellipse being taken out at the Wave 4 extreme.

Watch $GS Stop Loss at $192.25


$GS @ $192.25

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The Oscillator Pull back is also with parameters, in that it has not breached 140% of the Wave 3 extreme, which can be seen on the Oscillator study at the foot of the chart below. (Oscillator compares the 5 and 35 day Moving Averages and displays them in oscillator form, in yellow).


With all this in mind I still want to be conservative on my entry, just in case the US markets have a very Bullish week and drag up financial sector stocks in a corrective pattern. The entry will be outside of my trend channel and below the 6/4 MA Low (RED MA line close to Red Trend channel exit).

Watch $GS Stop Sell Order at $182.69


$GS @ $182.69

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Stop Sell Order at $182.69 with my Stop Loss at $192.25. The potential target price of $152.00 gives a great 1:3 Risk to Reward Profile.

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