SUMMARY: GBPUSD LONG and up over 200 pips, and we now have a counter-trend buy signal on the EURUSD. Stocks are likely hours away from the next intermediate retracement from this possible top, or at least the top of this 5 wave up on the daily charts. Dollar Index DX-USD is likely getting ready to have a 4 to 9 day correction. ASIAN crosses are about to sell off with the Yen about to strengthen for days to a few weeks. Gold is in a system long trade, but still in the box pattern and may go the other way, so continue to use breakout levels from Wednesday for new or additional positions (see gold chart below).
ACTION: BUY Euro @ 1.3045 stop to open (the horizontal breakout line), use initial stop loss @ 1.2911 (the 2 day low), move stops to breakeven @ 1.3095, exit 1/3 to 1/2 @ 1.3158, exit remaining at 1.33 OCO your trailing stop. We will likely short again on this bounce after it completes and ABC 3 part rally (up, then correction, then new high, then we short again, as long as daily trend is still down). See daily chart below with forecast.
GBPUSD: LONG near the low. Since this was a counter-trend trade, peel off 1/3 to 1/2 and move stops to breakeven point on remaining position. We will likely short again on this bounce after it completes and ABC 3 part rally (up, then correction, then new high, then we short again, as long as daily trend is still down) over 5 to 9 days. See daily Pound chart below.
DX-US: US dollar index is likely topping out on this leg, as suggested on our last report.
ACTION: consider shorting at horizontal breakout lines and/or on intra-day rallies once the breakout line has been penetrated to the downside and as long as the 60 minute and/or 240 minute trends are heading down (see chart below).
USDJPY: LONG on Dollar-Yen, but topping and about to generate a system sell signal on the daily chart, likely within hours of this analysis or by Monday's close. See weekly and daily charts below.
SP500: LONG TARGET REACHED. See 240-minute chart below and analog chart further down.
ACTION: EXIT LONGS and REVERSE to SHORT at the market with stop above Asian and European session high.
ACTION 2: Consider shorting on overbought intra-day rallies as long as the 60 minute and/or 240 minute trends are heading down.
ACTION 3: Buy VIX (volatility index) CALL options out 90 days to expiration, or BULL CALL SPREADS, out 120 days or more.
NOTE: See SPX Analog chart comparison below of the current market to that of the market during the 2006-2009 prelude to the market top and subsequent crash.
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