Stock indexes see rough road before debt ceiling fight

Daily Market Analysis (SHORT TERM) Wednesday 01/09/2013


KEY TERMS

OVB       Outside Vertical Bar
VRCB    Volatility Reduced Compression Bar

INDEXES

E-Mini S&P (March ’13)

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 01/08/13 @ 1450.50. Confirmation of a bottom with a close violation on 12/31/12 @ 1420.00. Upside Targets = 1452.00 – 1471.50.
  • The March S&Ps continued their drop lower to begin the week on Tuesday but battled back to close above the daily mid-range as the S&Ps remain very resilient heading into earnings reports.
  • I expect the S&Ps to drop back to 1420 over the coming weeks where it should then find some support until we approach what will become the debt ceiling “crisis.”
  • Projected Daily Range: 11.75
  • Projected Weekly Range: 59.25
  • Projected Monthly Range: 76.00

METALS

COMEX Gold (February ‘13):

  • Short Term Trends are bearish.
  • Confirmation of a top with a range violation on 01/04/13 @ 1661.10. Confirmation of a top with a close violation on 01/04/13 @ 1648.90. Downside Target = 1625.70 – 1611.90.
  • Second consecutive inside compression day generated on Tuesday.
  • February Gold rebounded from Monday’s bearish settlement to close just off the session’s high after narrowly missing out on confirming a ST bottom.
  • Gold has recently digested the losses it incurred at the end of last week and should continue to find some support near $1,650 as it pushes higher to $1,676.20.
  • Projected Daily Range: 21.10
  • Projected Weekly Range: 52.00
  • Projected Monthly Range: 90.30

CURRENCIES

Euro FX (March ’13):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 01/08/12 @ 1.3129. Confirmation of a top with a close violation on 12/21/12 @ 1.3187. Downside Targets = 1.3093 – 1.3036.
  • The March Euro FX erased most of its gains for the week so far on Tuesday as it ran into some ST resistance at 1.3150 to close in the lower 40% of the day’s trading range.
  • Tuesday’s price action suggests that the market will rally back near 1.3124 and then drop to test the weekly lows.
  • Projected Daily Range: .0094
  • Projected Weekly Range: .0193
  • Projected Monthly Range: .0381

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