Monday, April 18, 2011
Wave (ii) is Over, Wave (iii) Down Now Underway
Wave (ii) was quite shallow and short, but that was probably a hint as to how strong the downward pressure is on the market. Today's breakaway gap and sharp selloff is indicative of a 3rd wave. And since we were expecting a Minuette wave (iii), this fits well within my wave count I've been tracking lately. Expect lower levels in the coming days/weeks. Risk should remain just above the wave X high.
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END OF DAY POST:
Just a quick addition to this morning's post: the market sold off hard today and spent the rest of the day floating higher. But it still closed solidly lower. And the move down was much stronger than the weak float to the upside, and overall volume and internals that include the move higher were still quite bearish as you can see above. Volume finally spiked above the 1 billion share mark on the NYSE, but still quite short of my 1.2 billion share mark I'd like to see on a down move. All-in-all though, with the wave count looking bearish and internal weakness accompanying it, this market looks bearish here for the short term at least. That doesn't mean we won't see some pops here and there along the way, but the series of lower highs and lower lows should continue in the coming days.
The dollar broke out of its range and it did so to the downside as I suspected it would. With sentiment at an extreme before the decline, and the long standing momentum divergences we've seen in the RSI over the past few weeks, the euro is certainly poised to continue lower from here. I'm short and remain short.
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.