Stocks traded very well today. They started off floating higher and continued a slow methodical and healthy move higher without much volatility during and after the Fed action today. This is either a great stepping stone for the bulls, or a big fakeout made to lull the unsophisticated bulls to sleep as the bears pull the rug out from under this market tomorrow. I see no evidence of that happening though, so saying it will happen would simply be a guess. Right now the evidence suggests the uptrend is still intact and higher levels will be achieved.
Trading Market Sentiment
With diverging momentum on the RSI, weak volume, and fairly optimistic sentiment, it's hard to think that the S&P is at the start of a 3rd wave higher which the bullish count might suggest. Instead it still fits well with the combination WXY correction I've been tracking the past few weeks. The X wave is a flat correction that will give way to a sharp 3 wave drop for wave Y. But with the market looking strong at the moment, I'm not going to gamble on a short position here though. I'd rather be long here with a VERY tight stop if I absolutely had to take a position. But I don't, so I'm neutral at the moment.
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The dollar's slow choppy grind to new lows the past several weeks has been quite tidious to watch since I'm waiting for a major dollar bottom and reversal. But as you can see here, there are no signs of reversal at the moment. Today's big volume was a result of the Fed action, and a nice sharp rally tomorrow might be a sign that today's decline was a capitulation move, meaning that a bottom is in place. So a sharp rally in the dollar (sharp decline in the euro), would get me long the dollar and/or short the euro. Until then, I'm neutral the buck.
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.