Stocks took a pounding today with the Dow losing almost 300 points and S&P losing over 30 points and closing on their lows. It was an across the board selloff as all the major indices/sectors were punished with exception of the safe haven sectors Staples, Utilities and Health Care down the least. Internals in the overall market were also bloody as declining stocks, and declining volume, well exceeded the advancers. Normally there is a relief rally after such a bloodbath internally, especially since today is the first day of a new month. But seeing as that the downtrend was held intact yesterday by failing to make a new swing high, and today's S&P close was right at support, it's quite possible we'll get some good follow-through to the downside tomorrow, especially in the morning.
I changed the degrees of waves up one notch since the flat correction I've been tracking has really expanded here. I mentioned yesterday that I wanted to see if the euro followed through higher, or reversed and broke down lower, in the overnight session. Well it didn't really do either last night, but today it showed some shakey legs before finally falling late in the trading day. Other counter US dollar pairs like the AUD/USD and GBP/USD were punished much more than the euro, so looking at the EUR/USD alone for overall US dollar action wouldn't give you a comprehensive picture. Looking at the big picture, the US dollar appears to be getting its legs back again and poised to rally hard here which means the euro should fall hard. And looking at the euro's wave count here it suggests that a wave ((ii)) top is in. This means heavy selling directly ahead for wave ((iii)) down. I remain firmly bearish this pair as long as yesterday's high remains intact.
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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.