Euro setting up for rebound, gold poised to breakout

Daily Market Analysis (SHORT TERM) Monday 07/16/12

KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

METALS

COMEX Gold (August):

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 07/06/12 @ 1595.20. Confirmation of a top with a close violation on 07/06/12 @ 1578.90. Downside Targets = 1549.90 – 1522.70.
  • C > HOLB (Close Above High Low Bar) generated on Friday. Possible confirmation of a bottom with a range violation @ 1596.60. Possible TREND REVERSAL to bullish with a close @ 1596.60 or higher.
  • August Gold moved sharply higher on Friday as it closed at its highest level of the week before stopping just shy of $1,600/oz.
  • With gold generating its second consecutive VRCB week last week, this market is poised to breakout of its sideways trading pattern it has been stuck in since mid-May.
  • Projected Daily Range: 24.10
  • Projected Weekly Range: 52.40
  • Projected Monthly Range: 105.00

CURRENCIES

Euro FX (September):

  • Short Term Trends are bearish.
  • Confirmation of a top with a range violation on 06/21/2012 @ 1.2590. Confirmation of a top with a close violation on 06/21/2012 @ 1.2563. Downside Target = 1.2246.
  • Bullish OVB generated on Friday after making new lows on current move @ 1.2171. Downside Target 118% achieved.
  • The September Euro FX reversed course on Friday as it generated a bullish OVB after making new two-year lows in overnight trading, possibly signaling an end to the current downward move and a short-term bounce higher.
  • With last week being a VRCB week it shows that volatility in this market to the downside may be running thin and traders should expect a bounce higher to 1.2472.
  • Projected Daily Range: .0088
  • Projected Weekly Range: .0290
  • Projected Monthly Range: .0601

INDEXES

E-Mini S&P (September):  

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 07/09/12 @ 1342.00. Confirmation of a top with a close violation on 07/10/12 @ 1335.50 Downside Targets = 1308.25 – 1291.50.
  • C > HOLB (Close Above High Low Bar) generated on Friday. Possible confirmation of a bottom with a range violation @ 1353.50. Possible confirmation of a bottom with a close @ 1353.50 or higher.
  • The September S&P’s saw another great day to end the week on Friday, closing at their highest level of the week and narrowly edging out a gain for the week.
  • The S&P’s should setback on Monday in early trading as a small round of profit taking enters the market ahead of a jam-packed week full of both economic reports and Fed Chairman Bernanke’s semi-annual testimony before Congress as he lectures them on the dangers of getting too close to the Fiscal Cliff.
  • Projected Daily Range: 19.75
  • Projected Weekly Range: 42.25
  • Projected Monthly Range: 95.75
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