Stocks Indecisive, but Price Action Looks Corrective; Euro Resumes Downtrend

Internals today were fairly bearish and volume hit the 1 billion share mark on the NYSE, no doubt options expiration played a big part in puffing that number up  The first and last 30 minutes of trading pushed the market down towards the triple digit level on the Dow, closing barely in double digits at -93.  The first and last 30 minutes are usually when options expiration factors are the strongest.  Outside of those two timeframes, the market was fairly flat.  Tough to get any solid conclusions from this action in my view.

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The S&P, and especially the Dow, sport structures that definitely look corrective right now from an EWP perspective.  Sure, a sharp decline can easily give us wavers some creativity in our pens to start an impulsive wave count to the downside.  But right now, as it sits at first glance and keeping it simple like I talked about the other day, this decline over the past few weeks looks corrective.  A break of 1351.05 in the S&P and 12,718 in the Dow will confirm that it is in fact a correction.  Until then, the possibility that we're in the early stages of a large impulsive decline after a major top on the year is still on the table.

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Wednesday I said, "The euro appears to be in a flat correction.  Wave c should finish shortly after it exceeds the wave a high.  Once it does so it will be open for a sharp reversal to the downside."  Well that's exactly what happened.  When the price action fits the forecast it usually means we're on the right track in wave labeling.  I'll stick with the count above so expect sharp selling in the near future for wave (iii), with today's high remaining intact.

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Also worth noting, the euro had a very choppy and sloppy slow grind higher, typical corrective behavior, which led to today's big and sharp impulsive looking decline.  Today's action formed a nice bearish engulfing formation where the high exceeded yesterday's high but then closed well below yesterday's intraday low.  This is bearish and a good signal that a top is in place.

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.