Market Forecast for 08-15-12

USDCHF: Dollar-Swiss is in a compression pattern. As such, we usually recommend to traders to straddle the market with entry orders on both sides of the compression boundary, taking the eventual breakout in either direction. There is usually a slight directional emphasis in the direction of the main trend. Currently, the daily trend is flat, while the 240-minute trend is down, and the weekly trend us up. Therefore, there is no real trend bias right now.  However, daily and 240-minute systems are currently short already. See potential breakout trade below and daily chart with analysis.

ACTION:

TRADE 1 = BUY @ .9770 stop to open, use .9705 stop loss, move stop to breakeven @ .9783, exit 1/2 @ .9840 limit, trail stop on remaining position with 240-minute chart/indicators until stopped out and exit remaining position @ .9971 limit.

TRADE 2 = SELL @ .9689 stop to open, use .9752 stop loss, move stop to breakeven @ .9658 exit 1/2 @ .9575 limit, trail stop on remaining with 240 minute chart/indicators until stopped out and exit remaining position @ .9460 limit.

usdchf daily chart with analysis

EURUSD: Euro-USD currency pair still long, but it too has a similar pattern as the USDCHF, but inverted. Continue with prior numbers.

ND: NASDAQ stock index and other stock indexes had Key Reversal bars down today and provided a Hanging Man candle stick pattnern. Both of these patterns are often reversal points. Since the NASDAQ was at its upper Andrews Pitchfork Resistance Line when it reversed, its time to short it again.

ACTION: Picking tops can be tough, so this is a fairly high risk trade. Therefore, only LIGHTLY SELL ND @ 2719 OR BETTER, use 2741 stop loss, move stop to entry breakeven @ 2695, use daily trailing stops for this one rather than targets now, since we are in the timeframe where seasonal tops often occur and, a crash phase is likely to begin sometime between now and April next year. Thus, we have to be open to it from now on. A Weekly Key reversal this week would likely lead to a monthly reversal as well. See ND weekly and daily charts below.

nasdaq weekly chart

nasdaq nd daily

GBPUSD: Cable is still in the giant wedge pattern we marked off months ago. IF there is a breakout to the upside, we have a good solid target area around 1.6490 to 1.6530, which would be a very nice move. It has a good way to go for a downside breakout, so we likely have time before that could come into play. Keep your eye on that and look for a breakout move within the next 7-10 days or so. See weekly cable chart below.

cable weekly chart

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