Market Forecast for 08-13-12

USDCHF: Swissy has moved almost in perfect alignment with our manually drawn forecast.

Here again is the chart for your review (see below). However, we are at an inflection point where the USD will either rally up the the Wave B (capitalized) before dropping or begin to drop again now.

Since this correction in the USD is likely of a larger degree than the May-to-June-2012 correction, I would expect it to last at least 30% longer or be 30% or more deeper in price or both. This far, neither has occurred, but it could still go up before it drops more, so be a bit cautious here.

The first few hours of London Trading with likely determine the next few day's trend direction.

usdchf swissy daily chart with analysis

EURUSD: This currency pair is in a similar but opposite position as USDCHF.

ACTION: BUY 1.2315 stop to open, use1.2263 stop loss, move stops to break even @ 1.2350, exit 1/3 of position at 1.2370, hold remaining for potential move to 1.2714 to 1.2770 area. Use 240-minute or daily trailing stops until stopped out or targets are reached. If the Euro reaches 1.2650, then use 1.2604, as a stop loss.

IF EURUSD breaks below 1.2260 first, then it will likely continue to 1.2258 area. But since our system is already short from 1.2373, I cannot in good conscience sell it here. Instead, we would wait until a bigger pop up occurs to recommend a sell from that price range. See the daily and hourly charts with the analysis posted below.

euro daily chart with forecast

eurusd hourly chart

NASDAQ: ND had breakout to the up side and is now at an Intermediate Andrews pitchfork resistance line. These are often areas of price reversals, yet there is one more Andrews pitchfork resistance line slightly above this level. Therefore, the market will either reverse lower from here @ 2723.10, or from the next level higher around the 2820-30 price area (see weekly and daily NASDAQ charts below).

ACTION FOR SHORT-TERM TRADERS: If long, stay long with a stop and reverse (SAR) to short at 2700 stop to open, with a stop loss at 2724.10. Since the short potential is very larger here, we will refrain from short-term targets and use trailing stops for short, day trading positions for now.

ACTION FOR POSITION TRADERS CURRENTLY LONG: use 2619 stop loss on the ND and 1323 SAR to short  for the S&P500.

nasdaq weekly chart

nasdaq daily chart

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