Market Forecast for 09-05-12

The markets have reached our forecasted profit targets posted from last week and the prior weeks.

Markets that were long: EURAUD, EURCAD, EURUSD, GBPAUD, GBPCAD, XAUUSD (gold) should be ready for a pullback or reversals around this area of time and/or price, with gold possibly popping up for one more short-term high, before a pullback – but be ready for its pullback or reversal as well. Longer-term, gold may diverge from the currencies and still make a bull move new high. We will now more shortly, as the wave patterns develop on any down move (caution with gold – see chart below).

xauusd daily gold chart with analysis

If still long these currencies, consider exiting and looking for quick intra-day short positions for a few days, perhaps longer, as long as the 60-240 minute trends are heading lower (see Pound and Euro Aussie daily charts below).

british pound australian dollar daily chart

euro aussie daily chart

See the EURUSD weekly chart (below). Notice that its high last week came close to exceeding the down-trend line that made up a large clam-shell pattern that the Euro has been following since April 2010. If it does stop here and reverse lower, we could then expect the currency pair to potentially drop into 1.20 to 1.1950 area over the same time-frame that the USDCHF is making a  Wave (5) terminal high for this bull move (see also daily chart of the Euro below).

euro weekly chart

eurusd daily chart with forecast

Markets that were short: USDCHF and S&P500:

Also supporting the view of reversals in the currencies is USDCHF, the only currency short we had recommenced. Swissy, has the clearest Elliott Wave pattern and a system buy signal as of 09/04/12. The pair reached our 1st forecasted profit target and our 2nd time target exactly on time. The USDCHF also appears to have completed its corrective Wave C, of a larger Wave (4) corrective decline. Thus, we now have several indications of a reversal, at least for 4-7 days, and it is looking more likely that the Dollar-Swiss (and the US Dollar) will be on to new highs and a final top for this bull move in the US dollar (see daily chart below).

usdchf daily chart

S&P500 Stock Index: Well margined traders should still be short from both our manual recommendation and a system trade. Smaller traders were stopped out at breakeven. There is now a clear breakout bracket up and down. Use these upper and lower boundaries as stops on your shorts,  and possibly reversal points if the higher bracket at the two-day high of 1408.88 is exceeded on the upside. The lower bracket @ 1394.38 may be used to add to shorts if broken. Use 3 ticks above the high or low in your daily charts for the action entry point, in case your prices are different than ours. See S&P daily chart below with the analysis.

sp500 stock index daily chart

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