I wasn't going to post anything today but the euro declined in 5 waves and I wanted to post it. Internals in stocks still show a feeble rally. Volume increased today but still farely light relative to the declines the past several weeks, and end of month positioning is probably playing a role in the bullishness and uptick in volume now. Plus, the ratio of buyers to sellers isn't that compelling to the bullish side either. The rallying can easily continue until after the holiday Monday, but reversing at a nice level today opens the door to a selloff.
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Yesterday I said to look for a reversal at the 1225-1230 area and we got that today. Although I'm far from sure it's the mark of a top. The reversal at the 50% fibonacci level certainly has my attention though. I'm eager to add to my small short position if the evidence swings in favor the of the bears overnight or tomorrow.
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Simply put, the euro and and the pound declined in 5 waves against the dollar which has me looking to the downside for the "breakout" I've been talking about the past couple weeks or so. I'd be looking to short into any rally I can get with a stop just above the start of the euro and/or pound's 5 wave decline.
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.
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