EURUSD: The Euro hit our second resistance target mentioned on the 11/23 forecast, and appears to be in the 5th Wave (final wave) of this leg up that began on 11/21/12.
Note that the upper channel resistance line (purple on chart) now has lower momentum and lower angle of positive slope suggesting a top soon.
ACTION: Unless there is an increase in momentum up by the early US session, we may have may have a temporary high for this leg up. Look to lighten longs here and prepare for a potential short-term trend reversal on the 60 minute trends. It is best to place short-term trades either way now, since the easy money has been made in this up leg. We will look to buy another larger pullback, or a breakout if there is an acceleration up, with the next higher target being 1.3052 (see daily and 240-minute charts for the Euro below).
NOTE: If the USD/CHF breaks resistance just below where it is now, the EUR/USD would likely really run! So be ready either way at this juncture!
EURJPY: This pair is forming a small triangle pattern which often occurs in wave 4 corrections and typically leads to a 5th wave rally-often the final move in that leg.
Either way, a top of this leg is likely close at hand.
ACTION: Prepare for a tradable correction down, either from one more brief high or immediately if the market breaks lower out of the triangle pattern. See Euro-Yen daily chart below.
USDCHF: The USD is around support now across various pairs, with the Dollar-Swiss on critical support on the weekly charts.
ACTION 1: The most likely scenario is at least a few-day bounce from here. However, if .9250 is broken on the downside, it may provide a downside breakout, if not, then the 7-week low @.9212 likely would, and that would then portend a likely huge down move with targets to the .8408 price area.
Bottom line: Trade a potential short-term bounce, but if .9212 is broken, hold on and look to short USDCHF intra-day rallies in a big way.
NOTE: We present below a chart neural-net prediction on the US Dollar from www.NowAndFutures.com.
This is not to confuse you, but to show you that this prediction corroborates a potential bounce here in the USD – Just a bit of extra info. We'll have to see if it is correct or if the USD breaks the support and tanks.
DXZ: The US Dollar Index is at support consisting of the weekly Andrews median line and should provide an area to bounce off from. See the weekly chart below.
S&P500: US Stocks are at multiple resistance areas provided by both trend-lines and indicators. Therefore, a pullback from here is the most likely scenario. However, at these junctures, it could plow through resistance (less likely) and accelerate up.
ACTION: Look for retracement rallies on short-term charts as sell opportunities for a penitential 2-5 day pullback, as long as the 30 to 240 minute trends (your choice) are sloping down. Should the market accelerate up in the early AM, then we may have a legit breakout to the upside, but that is less likely without some consolidation (see daily S&P chart below).
HISTORY: In 1987 there were 55 days (a Fibonacci number) from the high in August to the low on October 19, 1987, when the market crashed. Coincidentally, this year, the sell off from the high on 9/14/12 to the low on 11/16/12 materialized in also 55 days.
While this moved down was not a crash, we have to be aware of a potential fit of past market movements. The rally thus far has been 7 days (8 days would be a Fibonacci number, but its still close), while the corrective rally before the crash in 1987 was about 3 weeks. So unless we take out the low of 1340.13, we should not worry about a crash just yet. Again, we keep pointing out that we are in "crash watch" territory, but like a Hurricane further out in the Caribbean, the crash warning is not yet given. So far, the S&P500 has not hit major support trend-lines on the downside and as we have been saying, some cycles are still favorable until March of 2013 to possibly August 2013; March to May being a potential turn date. We will keep you posted. In the meantime, check out the 1987 & 2012 comparison below.
JP225: The Japan stock index is in the SELL range based on a measured move from a trend-line breakout up AND also based on a BEARISH GARTLEY BUTTERFLY Pattern. Just be aware that a top will likely occur between yesterday's high of 9485 and a bit higher to 9577.
ACTION: Look to short the rallies once 30 to 60 minute trends on JP225 turn lower. See daily graph below with complete analysis.
XAUUSD: GOLD broke to the upside as suggested. No new trade info (see daily XAUUSD graph below).
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