Wednesday, August 10, 2011
The Sideways Minor Wave 4 Takes Hold; Euro Set to Breakout Soon
Internals calming down a bit today relative to the last few major triple digit moves we've seen the past couple weeks. Volume was still very high overall though at 2.14 billion shares. Of that volume, 93.5% was to the downside. Overall, again a very bearish day. My guess is that margin calls are hitting traders and fund managers' desks forcing the large selling of their assets, which in turn facilitates further margin calls and more forced selling. Then speculators are jumping on board and riding the short term trends, magnifying the impact of these moves. So we get these wild swings on huge volume. As far as price structure and internals go, this market looks ugly and in severe trouble. Somebody better do something "magical" to calm the markets down at least short term or this thing will continue to fall off a cliff in the coming days. Things are bad.
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Nothing new here for the euro as the bears and bulls keep exchanging blows in a truly consolidative pattern. The bears have a slight edge here in my view though since there is a series of lower lows and lower highs in place, suggesting the making of a larger downtrend is at hand. But with no clear EWP count on the bearish side, it keeps me honest and cautious of getting too aggressively short. The euro is due to breakout from its consolidation at any moment, and the weight of evidence slightly favors the breakout being to the downside.
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.