Tuesday, June 28, 2011
Downtrend May Have Been Broken in Stocks
Since we don't have an impulsive decline yet, and so far there's only a choppy 3 waves down from the high on the year, this recent development in swing highs/lows makes bearish positions very risky here. A break above 1311.80 would solidify the entire decline from the highs on the year was a 3 wave move, which is corrective, and that new highs were right around the corner. Staying below 1311.80 keeps the bears hopes alive, but it would take a new low to rejuvenate the bears' chances and create what could be interpreted as an impulsive decline.
How to Set Protective Stops Using the Wave Principle
The euro is a mess. My impulsive wave count I was tracking is not looking good as the euro is having a hard time making new lows. It's consolidating on the daily chart in a triangle looking pattern. This will lead to a breakout soon. If it's an EWP triangle then that means the breakout will be to the upside. It would take a sharp reversal to a new low soon for me to get bearish this pair again.
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.