ORIGINAL POST: 9:25 AM
Futures are showing a big jump this morning, with the last high of 1448 obviously threatened. But, the currencies suggest this morning’s rally should be only a very deep retracement.
The dollar sank a good deal, but only to the bottom of the purple channel (so long, white channel.) Immediate downside risk has to be to the .618 at 79.41.
The EURUSD still hasn’t retaken its key level — the .886 of the last swoon at 1.329. It reached 1.3298 late yesterday evening, but has since fallen back below the key major white channel.
Bottom line, I wouldn’t chase this rally unless it exceeds 1448. But, taking a long position on the opening just plain makes sense. Overhead target if it exceeds 1448: 1459.56, which is the .886 of 1474.51 to 1343.35.
Of course, exceeding 1448 completely rewrites the harmonics targets, as 1448 can no longer be considered a Point B.
ISM data is due out at 10am. The market will likely care if it’s very negative. But, a slightly negative report would probably be shrugged off as Fiscal Cliff related.
UPDATE: 9:55 AM
Along with the harmonics picture being rewritten by exceeding 1448, we have to consider whether the analog has been busted.
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