Monday, January 4, 2010
EUR/USD Should Drop in a Wave 5 Soon; Stock Market in Blowoff Top
Short update today as I'm fighting a cold and want to crawl back into bed. The above 8hr EUR/USD chart shows that the move is incomplete, and that a wave 5 is due soon that will draw the pair to a new low before rallying in a longer and deeper rally. This pair is the practically the mirror opposite of the US Dollar Index, so just flip this chart upside down to get a picture of the dollar as a whole.
The stock market's surge to a new high today looks like the start of a "blowoff top" to me. We had several weeks of sideways action, not quite looking like a triangle but the same concept. We are now thrusting from this consolidation which is a terminal move. Thrusts tend to be sharp and quick, but are quickly completely reversed. The wave count is not clear right now in the short term, but I think the bulls are getting impatient and want to push the S&P to 2000 soon to fulfill their prophecies that the worst is over and the bull run is back on. The past several weeks of sideways action has frustrated them and they are now going to throw everything they have left in on this final thrust upward. But it will be the final sprint of a marathon that the bulls will lose. I'm practicing patience now and am waiting for signs of a reversal. Until, I think the best thing is to get out of this rally's way and wait for the market to give up the goods to the downside in a manner thought would be very opportunistic for the bears.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.