Market Forecast for 01-08-13

EURJPY: The Euro-Yen cross has compressed and offers both a buy and a sell breakout opportunity. Use the horizontal red lines on the 240-minute chart below for the long/short breakout levels and the dotted horizontal lines for the upper and lower targets.

eurjpy 240 minute charts for 01-08-2013

S&P500: The US stock market did roll over on the short-term chart as suggested, but here too we have some short-term compression with the possibility of it breaking out in either direction. The longer it goes sideways, the more it favors a continuation up.

ACTION 1: BUY–A break up through 1457.41 should be good for new highs.

ACTION 2: SELL–The oscillators have rolled to the sell side on the 240 minute chart. If the index breaks below 1450 in the early session, the weakness should carry to 1437-38 and possibly to fill the gap at 1410.75. See daily and 240 minute S&P charts below with complete analysis.

sp500 index daily chart for january 8th, 2013

s&p500 240 minute chart with analysis for 01-08-13

XAUUSD: Gold reached the 61.8% retracement level and we can likely expect some bottoming action and at least a small rally attempt, perhaps more. See daily gold chart below.

xauusd daily graph 01-08-13

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