BIG WAVE COMING! We are still expecting FIREWORKS on the downside for stock markets in the USA, as the European situation deteriorates further, and that a tsunami rolls eventually onto the US shores. Stay on alert!
S&P500: A break of the 1319.63 and 1303 swing lows (IF IT HAPPENS THIS WEEK) would likely confirm the beginning of a crash, with 1303 being a likely acceleration point (again, if it is broken). However, the SP and ND indexes are near short-term support with the oscillators mildly oversold, so it is not a sure thing yet, and, a breakout up out of the 240 minute wedge pattern on the SPOOS (S&P500 contracts) could happen, even though it looks like a Wave 4 corrective bounce off today's low, meaning we will likely see one more low to follow before a bigger bounce and then the potential fireworks on the downside.
That said, should the market FAIL to break down past 1319 in the next 7 days, or if it breaks above 1370, then we will have to reassess the bearish wave counts we've posted since the April high and the likelihood that the S&P will get into alignment with the ED Interest rate futures contract shifted forward by 6 months, which suggested back in late May that the market would bottom around June 3-6, and work its way higher until October or November (how convenient). Nothing is certain now, so be patient. We are almost at the tipping point, one way or the other.
Bottom line: you should be prepared for the break but don't bet the farm until perhaps 1303 is eventually broken, sooner or later. See the SP chart below with all the analysis.
ND: The analysis for the NASDAQ Stock Index (ND) is the same as the SP500, but see its breakout points and targets on the daily chart below. It has a cleaner looking pattern.
Euro: The EURUSD has continued lower as we mapped out, but it is in the 5th wave of this intermediate wave, which should bottom more or less the way it is mapped out in today's 240 min and weekly charts. See both Euro charts below.
British Pound: GBPUSD is in a huge wedge pattern as shown on the weekly chart (see below). The borders are well defined. Use breakouts of 240 minute chart to position your trades within the pattern, but if it breaks the lower boundary, you will likely have a huge move set up. Yes; it may move to the upper boundary, but after a likely test of the lower line.
CADJPY: The Canadian Dollar vs the Japanese Yen tanked as we projected and it is likely in the 1/3 part of its down move on this leg. We should see 75.60 and 74.18 or lower before this more is over. See daily chat below.
Gold: XAUUSD is in the apex of a triangle and WILL exit the pattern with a big thrust. DO NOT miss this trade, since the risk to reward is very favorable. Use the breakout points and targets marked to guide your trade. Have a SAR stop and reverse should it fake and go the other way.
Since the daily and weekly trends are down, the odds favor the downside, but the center bands are flat so, have it both ways if the market does a fake out. See gold weekly chart with analysis below.
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