Market Forecast for 10-23-12

AUDCHF: Aussie-Swiss in a wedge that counts best as a Wave 4 correction of the recent leg down. However, since it is in a compressed wedge, we recommend placing both long and short breakout orders:

ACTION 1: BUY AUDCHF @ .9600 stop to open, use .9534 stop loss, move stop to breakeven @ .9648, Exit 1/3 to 1/2 @ .9711 limit OCO exit at your trailing stop, and trail to .9833 or .9946 if it really runs.

ACTION 2: SELL AUDCHF @ .9514 stop to open, use .9560 stop loss, move stop to breakeven @ .9450, Exit 1/3 to 1/2 @ .9416 limit OCO exit your trailing stop, and trail to main lower target at .9318 or terminal target of .9201 if it really tanks. See the Aussie-Swiss daily chart below with the complete analysis.

audchf aussie swiss daily chart

AUDJPY: Is now short on the 240-minute charts from what counts best as a Wave 5 top of the recent leg up since October 12th. We recommend shorting intra-day rallies, which we expect for the next 4-8 hours, as long as the 60-minute trend is heading south, with target of .8170 to .8160 area. Then, perhaps we well look to the long side if appropriate. See 240-minute Aussie-Yen chart below:

aussie yen audjpy 240 minute chart for october 23, 2012

NZDUSD: Much like the AUDCHF, the Kiwi Is is a compression pattern with the 240-minute and daily system currently short, even though the selloff thus far look like a correction, not yet a trend move. However, since it is in a compression pattern, we recommend placing both long and short breakout orders:

ACTION 1: BUY NZDUSD @ .@ .8195 stop to open, use .8146 stop loss, move stop to breakeven @ .8260, Exit 1/3 @ .83.07 limit OCO exit your trailing stop, and trail to main lower target at .8345 limit (another 1/3 to 2/3rds) use or higher target of .9474.

ACTION 2: SELL NZDUSD @ .@ .8143 stop to open, use .8184 stop loss, move stop to breakeven @ .8196, Exit 1/2@ .83.07 limit OCO exit your trailing stop and trail to main lower target at .7816 limit. See Kiwi daily and 240-minute charts with analysis below:

nzdusd daily kiwi dollar 10-23-2012

nzdusd 240-minute chart for 10-23-12

EURAUD: Euro-Aussie is also in a compression pattern (running out of time here) so take the breakout in either direction. Use the manually drawn red lines for the entries and targets. Move stops to break even at 60% of risk. See daily chart below.

euraud daily chart 10-23-12

EURCAD: The Euro-Cad pair has likely completed a 5 wave advance but the count is less clear and is therefore still bullish, at least for the next 4-12 hours. han the and therefore is topping, at least for this leg (see wave counts on chart).

ACTION: If the 24 hour low of 1.2943 is broken, or we see a shallow small range bars rally with a reversal bar on the 240 minute chart, then we would recommend shorting intra-day rallies, as long, as the 60 minute trend is heading south, and you find overbought rallies on shorter-term charts. See Euro-Cad 4-hour chart below:

eurocad 240-minute chart 10-23-12

EURJPY: The Euro-Yen has also likely completed a 5 wave advance and therefore is topping, at least for this leg (see wave counts on chart). The 240-minute chart has a manual pattern trade and is pending several system short signals for this currency pair.

ACTION: We recommend shorting intra-day rallies, which we expect are possible for the next 4-12 hours, but when, or as long, as the 60 minute trend is heading south, hit it for a short on the overbought rallies on shorter-term charts. See daily and 240-min charts below for Euro-Yen:

eurjpy euro-yen daily forecast chart for 10-23-2012

eurjpy 240-minute chart 10-23-12

EURUSD: The Euro a 240-minute system sell already in place, with potential targets (not quite as probable as the other trades mentioned above) of 1.2877, if 1.3011 is taken out on the downside.

However, breaking 1.3064 to the upside would negate the bearish view and set it up for one finally rally for this leg, on the daily charts (see daily and 240-minute charts for the Euro below).

euro daily chart for october 23, 2012

euro 240-minute chart 10-23-12

SGDJPY: The Singapore dollar-Japanese Yen cross is likely at a short to intermediate top at a upper trend-line and while exhibiting a Gartly Asymetrical BAT like RANGE pattern.

ACTION: We recommend shorting intra-day rallies, which we expect are possible for the next 4-12 hours, but when, or as long, as the 60 minute trend is heading south, hit it for a short on the overbought rallies on shorter-term charts. See daily chart below for this pair:

sgdjpy singapore dollar yen chart 10-23-2012

US Stocks, which have been on crash watch, and have likely topped from a long-term rising wedge and shorter-term triangular patterns. If this is the case for stocks, then a potentially massive sell-off is setting up now. A break below the two-day low would likely decidedly turn the tides lower and we would then have to be on the look out for a market tsunami in the weeks and months ahead. There remains the low possibility that the market will stop in here and rally into November 18th. The action over the next two session should clarify the long-term trend. If the break down happens, we have high odds that the bear is uncaged (roooaaarrr!!!).

SP500: Should the Spoos take out 1433 (24 hour high is 1432.88), then we would see one more rally to new highs (less likely here).

ACTION: We recommend shorting intra-day rallies as long, as the 60-minute trend is heading south, hit it for a short on the overbought rallies on shorter-term charts. See daily S&P chart below:

s&p500 daily chart 10-23-12

ND: NASDAQ sold off exacty to our second longer-term target and had a one-day rally. As you can see from the chart, we have a 2 bar box pattern that we can bracket both the low and high for a quite move to the upside should it pull up, and a big move to the downside should it head lower. Breaking above 2725 would negate the bearish view for now and possible send the ND to 2800 area, where the upper Andrews Pitchfork resistance line is…

ACTION: We recommend shorting intra-day rallies as long, as the 60-minute trend is heading south, hit it for a short on the overbought rallies on shorter-term charts. See daily NASDAQ chart below:

nasdaq daily chart with analysis for october 23rd, 2012

LONG-TERM US EQUITY MARKET VIEW: Thus far, the stocks are following the ED Interest Rate Futures contract Commitment of Traders (COT) report skewed forward by 52 weeks as we have posted many times since last May when it showed a likely rally beginning June 3-5 and ending in late September to mid October. So far, that has been amazingly accurate. Long-term cycles are mixed until March 2013 when everthing I have is heading lower into 2016 +/- 6 months.

DE30: The DAX 30 stock index is short from two system sell signals on the daily charts. This market is in a trangulating rectangle pattern and could go either way, but we are leaning to the downside at this time.

ACTION: We recommend shorting intra-day rallies as long, as the 60-minute trend is heading south, hit it for a short on the overbought rallies on shorter-term charts. Initial targets are 7172, the first trend-line of support, then 6850, the initial measured move target. Below that is air down to 6281 area.

dax 30 de30 daily chart 10-23-12

OIL: Crude oil finally broke lower so it may be corroborating a shift back to the USD and out of OIL, stocks, Euros, for now for within a few sessions.

ACTION: REMAIN SHORT: We recommend shorting intra-day rallies as long, as the 60-minute trend is heading south, hit it for a short on the overbought rallies on shorter-term charts. Should the two-week low of 87.50 be broken to the downside, targets become $85 then $70.

Should OIL reverse to the upside and take out 92.50 then a new bull move would be in motion (less likely). See the weekly logarithmic and linear scale weekly charts for crude oil below, followed by the daily chart.

crude oil weekly log chart for 10-23-2012

oil weekly linear scale chart 10-23-12

crude oil daily chart for october 23rd, 2012

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