Technical forecast for US and Euro Stock markets

Dow Jones Industrial Average hit 13830 as expected which we predicted to hold the downside & we bottomed at 13802, above our stop level. We are stuck in a 13800-13955/62 range for 2 weeks now & should be getting ready for a break. Although the market is severely overbought & in need of a correction, the longer we go sideways & test 13955/62 , the more chance we break to the upside. A break above 14000 means that the bulls are back in control and we should push on towards 14097 then 14205.

13899 and 13864 then 13810/00 can act as support today. However a break of 13800 confirms the triple top for a target of 13750, possibly 13674 in the days ahead.

EURUSD held resistance at 1.3540/60 as predicted but then broke support at 1.3465/55 to hit 1.3375 which we saw as a good buying opportunity with strong support. The low was in fact 1.3371 so this trade has worked perfectly as we look for resistance at 1.3451. We can take profit here in case of a move back to 1.3375/70 support but be ready to buy back in to longs no a break higher looking for 1.3501. We can probably go no further today but if we push through 1.3445 we should find a selling opportunity at 1.3581.

A break of 1.3350 however needs to trigger stops as we target 1.3310/1.3290 & an excellent buying opportunity with little chance of any further losses.

FTSE failed at 6274 where we tried shorts and we broke 6225 to hit our next target of 6179 and this held the downside nicely. We bounced & face resistance at 6231 then 6248, with 6266 likely to hold the top side today. However a break of yesterday’s high at 6273 could see 6291 next.

Below 6209 we could see a retest of 6179/74. Good support here again could see us bottom out but on a break look for 6150/45. Exit all shorts for today & buy in to longs for a bounce expected here. Longs will need a stop below 6130 for a test of 6095. If we do not bounce from here then 6041/35 could be the next downside target.

Dax futures hit 7658 resistance as hoped. The market now looks like it may have bottom after we hit our target for the correction this week. 7612/19 is resistance but above we could stretch to 7660/70 and a break higher today targets 7700/12 where we may top out. However above here 7753 is a good target.

Yesterday’s low at 7565 then excellent support at 7536/26 very likely to hold the downside but a break targets a 9 month trend line and 100 day & 21 week moving averages at 7475/55 where we would expect a low for the day if seen.

EuroStoxx did break lower and did target 2589/83 where we predicted a low for the week & the exact low was seen at 2587. This should now be the end of the correction at this stage. Target for today is 2626 then above here we look for 2651. Good chance of a high for the day here but if we keep going look for 2661 then 2671.

2589/83 remains good support and a second chance to buy in to longs with a stop below 2564.

S&P fell back as predicted and bounced from 1494 support. We have been stuck in a 1491-1511 range for 2 weeks now & should be getting ready for a break. Although the market is severely overbought & in need of a correction the longer we go sideways and test 1510/11, the more chance we break to the upside. Go with a break above 1513 today for 1515 then on to 1521 and eventually 1527.

Good support at 1500/98 may hold a slide today but below here we should exit shorts down to 1494 then 1491/90 looks a very good buying opportunity.

Jason Sen began his career in the options pits on the trading floor of LIFFE in 1987 at the age of 19, making markets on his own account. In 2001 when the trading floor closed he successfully made the transition to day trading on computer screens. Jason always had an interest in technical analysis throughout his trading career but began to study this area in depth from 2006. www.daytradeideas.com has established itself as the leading provider of... More