Charts I’m Watching: Sep 12, 2013

Initial claims plunged to the lowest level since 2006, but there are questions about the accuracy of the numbers.  In any case, it sure doesn’t hurt the prospects for a taper this month.

The USDJPY has fallen back below the “breakout” point — the top of the white channel — after slightly exceeding the latest .786 and the purple channel midline.

It appears to be backtesting the yellow channel midline, so we should see more weakness to back below 99 — perhaps 98.66 or lower.

DX has fallen significantly in the past few days, testing the white channel midline and putting in a potential bottom in search of a Bat Pattern Point C.

It dipped as low as 81.595 overnight, very close to the .618 (81.535) retracement of the gains from 80.77.

ES poked up slightly higher in the after hours yesterday, but has since settled back down to its .786 and is still butting up against resistance at the red channel midline.

UPDATE:  10:00 AM

SPX is still reaching for its .786 after having closed the last remaining higher gap yesterday.  Its sweet spot could be up at 1695.  The purple 1.618 intersects there with the top of the falling red channel and the former H&S neckline (purple, dashed.)

Note: another 8 points higher for SPX would mean ES tagging its .886 at 1695.85.  In either case, I see a possible drop here to flesh out the red channel bottom as we have a series of lower highs and lower lows since yesterday’s highs.

I think it’s prudent to remain short, reconsidering if ES exceeds 1690.50.  ES target is 1679.20.

UPDATE:  10:10 AM

The EURUSD has reversed off its .618 at 1.33 at a channel top.

However, the light blue channel line it tagged overnight is a potentially bullish support level.  It belongs to a channel dating back to Jul 2012, though this channel is notorious for its frequent excesses in both directions.

UPDATE: 11:45 AM

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