Market Forecast for 01-16-13

Asian crosses are selling off as expected with room for additional downside only after the initial corrective counter swing retracement, which may have already begun. See charts for updated price action and targets. It is possible that this move is only the top of larger wave (3) and perhaps only the top of Wave 3 of (3). See daily charts with analysis below for USDJPY, EURJPY, and CADJPY.

usdjpy dollar-yen daily chart for 01-16-2013

euro-yen daily chart with analysis for 01-16-13

cadjpy chart for january 16, 2013

Stock indexes also sold off a bit with the Nikkei 225 (see JP225 daily chart below) making a nice move thus far. Expect US indexes (Dow and S&P500 charts below) and the Euro STOXX50 (see  chart below), Europe's leading blue-chip index for the Eurozone, to get hit more in the coming days, as long as long as this week's high is NOT taken out, which would likely mean the indexes would attempt to take out last year's highs before the before the cycle top is in.

The 60 minute charts suggest we are at or close to the LOW of the first leg down on the hourly chart. We recommend selling into this rally ONLY after short-term intra-day chart's trends' turn lower again or if the market takes out a 2 day low anytime this week.

As of yet we still do not know if this sell-off will begin the 2013 down phase, or we make new highs, but we are in the time window for a top and the recent highs could be a Wave-2 corrective high, although the waves are not as clear as we would like them to be to make that call. We will be more cautious until things clear up. If this was mid March or late August, and the price waves were a bit clearer on the Sept to November down move, we might say bet the ranch, but but there will be many huge opportunities over the next few years as volatility really picks up, likely beginning this year. Wait for the markets to confirm themselves before getting too bearish.

dow weekly chart 01-16-13

s&p500 daily chart with forecast 01-16-13

sp500 60-minute chart for january 16, 2013

nikkei 225 jp225 daily chart sell off 01-16-2013

euro stoxx50 daily chart 01-16-2013

ENERGY: Heating Oil is close to a breakdown, with crude oil (OIL) providing a daily system sell signal, so watch these closely. Gasoline has already been getting hit for the past few days. See daily crude oil chart below.

crude oil daily chart for january 16, 2013

GOLD: XAUUSD has broken to the upside but not with any gusto as of yet. Move stops to Tuesday low less 3 pips. We will not risk much on this move, and may raise stops intra-day if there is no upside movement today. We can always reenter (see daily chart below).

gold xauusd daily 01-16-2013

Please leave your comments below and social votes if you enjoyed this market report. Good trading!

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