Market Forecast for 01-04-13

EURJPY: The Euro-Yen cross had a temporary high followed by a tradable pullback. We expect at least a shallow rally and perhaps one more high on lower momentum either now, or after a slightly larger pullback to 112.00.

ACTION 1: BUY 114.58 stop to open, use 114.19 stop loss, move stop to breakeven at 114.80, targets 115.00, 115.26 and potentially 116.20 or greater. If the pair cannot get above 115.03, then it may roll over and head south again. Keep an eye on the 60 minute trends for a roll over.

ACTION 2: SELL short on a break of support at 113.71, with targets of 112.00 to 111.25. See daily and 4-hour charts below with the complete analysis.

eurjpy daily chart for january 4, 2013

eurjpy 240 minute chart 01-04-13

AUDUSD: The Aussie-Dollar pair sold off to its 240 minute Andrews Median line, which may give it enough support for a little rally to sell into.

ACTION 1: Ideally, I would like to see a rally back up to 1.0476 to try a short position if the 240 or 60 minute trend is sloping lower.

ACTION 2: A break of 1.0417 would likely mean that a much larger drop is to be expected. If that break lower occurs before a corrective bounce to 1.0476, then use short-term chart to enter a short position below 1.0417. If a rally to 1.0476 occurs first, then there is a break of 1.0417, sell there, with a stop loss at 1.0443.

S&P500: The S&P index has rallied up a bit too fast and should have a pullback to 1441, or potentially fill the gap opening at 1410.75.

ACTION: We will look to likely fade (sell) this rally once the 5 minute and/or 15 minute trends roll over to the down side, with targets of 1440 and 1411. See the 240-minute S&P chart below with the forecast.

s&p500 240 minute chart for 01-04-2013

Thanks to all our fans for their support. For those traders who have stuck around past New Year's, we wish you good trading for the remainder of 2013!

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