Friday, July 1, 2011

Stocks Should Get to New HIghs on the Year Soon; Euro Faltering

Keeping it simple and looking at the pattern of swing highs and lows earlier this week paid off.  Once the series of lower highs and lower lows was broken, the market has been surging higher and higher.  Those who followed that made a nice profit very fast.  So it looks like the recent decline was a 3 wave move, a correction which I labeled ((a))((b))((c)).  So stocks should be working their way to new highs on the year shortly.  It's possible we get another down leg to a new low if the correction decideds to turn into a double zig-zag, but it would still be a 3 wave move, giving us the clue we need to know the larger trend.  But seeing as this correction for a Minor wave 4 is already quite large compared to its brother Minor wave 2, I doubt wave 4 will materialize into anything larger. So look for the uptrend to remain intact in the coming days.

Although it it's a little late to get bullish here at these levels, it does seem the path of least resistance right now is up.  I'd be bullish, or on the sidelines.

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The euro might be running into trouble here.  It tends to follow stocks, more or less, and despite todays big rally in stocks, the euro is struggling.  In fact, it appears to be establishing a head and shoulders top with the right shoulder falling short of the the left shoulder's level, suggesting a lot of internal weakness.  When you combine that with the diverging RSI you have the potential for the euro to slide soon.  I'm bearish the euro here against this week's high.

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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.

1 comment:

james moylan said...

I have a web site where I research penny stocks and stocks under five dollars. I have many years of experience with these type of stocks. If theirs anyone thats interested in these type of stocks you can check out my web site by just clicking my name. I would like to comment about elliott wave. I have a much simpler way of picking stocks. It consists of buying decent companies that have very very low price to sales ratioes or market cap when a stock trades at a extremely low valuation than you have a margin of safety that does not exsist in say growth stocks' you are simply buying a company for half or less than half of its net asset value its net asset value being what the company would sell for on the open market if it were put up for sale. 

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