Stock indexes look for central bank assurances, risk 3%-4% losses

Daily Market Analysis (SHORT TERM) Wednesday 08/08/12


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

METALS

COMEX Gold (December):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 08/07/12 @ 1618.90. Confirmation of a top with a close violation on 07/31/12 @ 1614.60. Downside Targets = 1596.10 – 1586.60.
  • VRCB generated on Tuesday. Possible confirmation of a bottom with a close @ 1618.90 or higher.
  • December Gold was able to trade above Monday’s high to partially confirm a Short Term bottom in the market but due to its low volatility and bearish price action, gold has yet to see the needed positive rate of change to push this market out of its near 3 month slump in which it has generated the smallest trading range over the past 4 years.
  • Projected Daily Range: 20.50
  • Projected Weekly Range: 61.20
  • Projected Monthly Range: 105.00

CURRENCIES

Euro FX (September):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 08/03/2012 @ 1.2398. Confirmation of a bottom with a close violation on 07/26/2012 @ 1.2293. Upside Target = 1.2512 – 1.2609.
  • Inside VRCB generated on Tuesday. Possible confirmation of a top with a range violation @ 1.2346. Possible confirmation of a top with a close @ 1.2346 or lower.
  • The September Euro FX was able to close at its highest level since before the July 4th holiday on Tuesday but the bearish volatility and neutral price action adds to the case that this market could be nearing a Short Term top.
  • If/when Tuesday’ low of 1.2381 is violated during normal pit session hours, the Euro should then continue to slide lower to make new weekly lows and retest the 1.2258 price.
  • Projected Daily Range: .0132
  • Projected Weekly Range: .0267
  • Projected Monthly Range: .0601

INDEXES

E-Mini S&P (September):  

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 08/03/12 @ 1387.75. Confirmation of a bottom with a close violation on 08/03/12 @ 1387.75. Upside Targets = 1401.25 – 1414.25.
  • New highs made on current move Tuesday @ 1403.25. Upside Targets over 80% achieved.
  • The September S&P’s moved higher again on Tuesday as they closed at their highest levels since the April highs were formed.
  • With the market moving higher on earnings and hopes for additional central bank stimulus across the globe, any shortfall by central bankers to give markets the reassurance they need could spark another 3-5 day selloff resulting in 3%-4% losses.
  • Projected Daily Range: 18.25
  • Projected Weekly Range: 47.25
  • Projected Monthly Range: 95.75

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