EURUSD and GBPUSD: The Euro and the Pound are working to put in lows for this wave down. Exceeding the marked breakout levels (horizontal red lines) to the upside will turn into a tradable corrective rally. We are at the low of this wave or possibly have one more stab lower.
ACTION (EURUSD): The breakout will likely provide confirmation of a 5-9 day corrective rally. The Euro has two levels for a breakout up, and a potential stop and reverse to short should it fall back below 1.2990. The higher breakout level at 1.3075 is the place to be long at if you are a longer-term trader or a place to likely confirm the 5-9 day rally. If that happens, consider buying oversold pullbacks as long as the 60 and/or 240 minute trend is sloping up.
ACTION (GBPUSD): Most of the forecasts call for a low on this currency pair now and thus, a rally is to be expected should the breakout level be exceeded. The breakout will likely provide confirmation of a 5-9 day corrective rally. If that happens, consider buying oversold pullbacks as long as the 60 and/or 240 minute trend is sloping up. See daily chart for the Pound below.
USDJPY: The Dollar-Yen pair is topping on the 3rd or 5th wave of this larger wave (5).
ACTION: A breakdown lower will likely provide confirmation of at least a 5-9 day corrective sell-off/retracement and perhaps a 13-21 day correction. Consider selling overbought rallies as long as the 60 and/or 240 minute trend is sloping down. Options traders should consider buying a bear put spread or outright puts 60-90 days out to expiration. Daily USDJPY chart with analysis is provided below.
DX: The US Dollar Index (DXY) is eking out a top of this leg here or one more 1-3 day push higher. Should the Euro and Sterling break out to the upside now, rather than after one more low, then the DX would very likely head south now rather than after one more high.
ACTION: consider selling overbought rallies as long as long as the 60 and/or 240 minute trend is sloping down. Options traders should consider buying a bear put spread or outright puts 60-90 days out. See DX chart below.
US STOCK INDEXES are likely working out a top for the March 2013, potential highs that I have been discussing since early last year (Hong Kong has broken a trend-line and appears to be heading lower. Japan will soon be heading south too for at least a correction, but may make one more high first. Watch for a break lower, possibly today or by Friday/Monday).
SP500 ACTION: A breakdown lower now, or possibly one more stab higher, will likely provide confirmation of a the March 2013 cycle top. When that happens, strongly consider selling overbought rallies as long as the 60 and/or 240 minute trend is sloping down. Options traders should consider buying a bear put spread or outright puts 60, 90 & 120 days out to expiration, covering some on the initial break to cut your cost or potentially give you a free trade. See daily and 4-hour S&P500 charts below.
XAUUSD: GOLD is long, but it is trading inside the prior correction so it is not clear whether or not Gold will fall to one more low before a larger rally kicks in or if this is the real deal now. Breaking 1610 to the upside will likely portend a move to 1658. Conversely, breaking the red horizontal breakout line at 1563 would induce a move to 1524 or lower. See daily gold chart below.
NOTE: Other dates to look for major tops or bottoms will be +/- 3 days of 07/17/13 and 12/17/13. So if the stock market hasn't begun to tank by late March to early April, then it may top in July or have a secondary corrective bounce into mid to late July if March was the top. Either way, watch for potential lows in stocks and GOLD around 12/17/13, if both are heading lower into that date, or a reversal of market trends, whatever the direction is round those two dates.
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