Quick Update: USD and USDCHF held support and are experiencing a bounce as suggested. The EURUSD could experience a Wave B counter correction pop up, so use caution for today's trading session. US STOCKS, and JP225 (Japan) stock index are correcting down as suggested. Continue with the the trading suggestions from 11/27.
There was some news that the FED is toying with what signals they will be looking at to make the move on the next interest rate hike. In the meantime, Bernacke said he would keep liquidity primed forever, if needed. When the Federal Reserve does hike, it may come as a surprise and shock the financial markets. They did that in 1929, 1987, and many other times. Forget what they say and keep and eye on their behavior for clues to when the next hike might be. They say maybe in 2016, which our cycles also show as a potential market low. If they raise before that time, they may be trying to cause something (see Fed rate-hike screen shot below)…
EURAUD and the EURNZD both have short-term sell signals on the daily charts with mixed trends. We are providing the Euro-Aussie cross here for a potential quick sell. With 90% of the retail public on one popular FX site currently short the AUDUSD and NZDUSD, it is likely nearing a time for a rally.
ACTION 1: SELL EURAUD @ 1.2347 stop to open, use 1.2382 stop loss, move stop to break even at 1.2308, exit 1/2 of the position at 1.2253 and trail remaining on 60-240 minute stops (if you don't understand the terminology behind these orders, the pending order page of our platform user guide might help).
ACTION 2: If we are wrong and the EURAUD reverses up, BUY 1.2420 stop to open, use 1.2360 stop loss, move stops to break even at 1.2446, exit 1/2 @ 1.2547, exit the remaining at 1.2675 OCO trail your stop loss on a 240 minute basis (see daily EURAUD chart below with detailed analysis).
The EURUSD pair sold off as we previously suggested, but the daily and 240 minute trends are still heading up.
ACTION: Unless 1.2908 is broken on the downside by the time you read this, we suggest taking a quick profit and sell again (or look to sell rallies), IF 1.2908 is broken on the downside (see 240-minute chart for the Euro below).
We caught the top so far on the S&P500 and now we have a system sell signal earlier with it already being short.
ACTION: Again, our emphasis would be on selling intra-day rallies as long as the 30-60 minute trends are sloping south. We would get excited on the long side if there was a pullback on the daily and 240 minute charts with the trends still heading up (see charts below for the S&P [weekly and daily] and NASDAQ [daily] stock market indexes).
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