Charts I’m Watching: Jul 29, 2013

Short, my friends.

Though ES climbed back into the purple channel by the end of the day Friday, it has since stayed in line with the falling white channel.

UPDATE:  9:34 AM

We’re getting a bounce here at the former 1687.18 high, so I’ll play the long side with tight stops (1686.75ish.)   I don’t necessarily expect a breakout, but it’s the logical play.

The USDJPY has reached the purple channel midline as we discussed and should get a bounce here at 97.62.  Though a drop through it would also drop the pair from the white channel, which would target the yellow midline and H&S neckline at below 95.

EURUSD reversed at the white .786 almost where it intersects with a falling channel top. The .886 at 1.3339 looks to be next up unless the purple channel line and narrow acceleration channel fails.

UPDATE:  10:15 AM

SPX just stopped out at 1686.75, back to short with target of 1680-1683 and stops at 1688ish.

Bears are chomping at the bit, and bulls are likely thinking IH&S — the theme behind the bullish scenario on the above chart (last Thursday’s forecast shown in purple.)

UPDATE:  11:20 AM

SPX has reached our initial target area (1680-1683.).  The bottom of the red channel is just below at 1678-1679, but an IH&S from here would be well formed.  Watch your stops.

UPDATE:  11:30 AM

Should get a bounce here at 1682 — the .618 of 1676 to 1691.  Normal bounce should be to the last channel line at 1685ish.  But, keep your eyes open for any higher.

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