Monday, January 11, 2010
Stock Market a Borefest; EUR/USD Broke Key Levels to the Upside
I wish I had something interesting to say on the markets but I really don't. The stock market has done almost nothing the past week. It has not soared aggressively higher in the proposed wave 3 of C of Z of 2 (or B). But it also hasn't broken below the key levels I cited January 5th of 1115 or below (click here for chart from January 5th). It seems that the bulls are out of gas but yet the bears are still in hibernation, so the market just floats sideways or higher on mild buying interest. One thing of note is that the EUR/USD shot higher in what is probably a wave c within a larger wave 4. This rise allows the EUR/USD to now fall in a wave 5 for over 300 pips. When you combine this with the extreme complacency of the stock market, the fact that it's not shooting higher in the projected wave 3 I mentioned last week, and that the market has been awfully quiet the past week or so; it makes the market ripe for a sell off soon. A break below 1115 will open the door to an almost certain break of 1100. From there, we'll look at the structure to determine what might happen next.
So the evidence suggests that the EUR/USD and the stock market are setup to decline in at least the short term in a decisive manner sometime this week.