Thursday, September 29, 2011

Thursday's Action - Stocks Working Lower; Euro May be Topping

The S&P is moving more as less as planned so there's not much to add from my last set of comments.  The S&P carried higher to the maximum comfortable retracement level at 78.6% fibonacci at 1197 before reversing sharply.  Yesterday's decline was much stronger internally than the preceding rally the day prior suggesting the larger trend is down.  Today's big rally should fade away by the end of trading.  The Nasdaq has been traversing in and out of negative territory all day despite the Dow being up triple digits all day. This is a telling sign that favors the bears.  Rallies are weaker internally and fractured whereas declines are internally strong to the downside and moving uniformly.  That's bearish.  And the wave count above suggest big moves lower if it's correct. 

Even though the structure right now may not be ideal for the resumption of the downtrend being underway, this type of imperfect movement is typical for 4th and 5th waves, i.e. 4th waves are often very choppy and unpredictable, and the following 5th wave can be even more unpredictable and imperfect.  We have been seeing that play out the past few weeks.  Yesterday's high should not be broken so I'm shorting into rallies against yesterday's high.

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I thought the euro would charge toward 1.4000 again before topping but it's possible a top is already in, at least in the short term.  There's a near head and shoulders pattern in place now, but besides it not being textbook it still tells the same story, a rally that is in trouble.  I favor the short side here against 1.3700.

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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.

3 comments:

Perthx said...

It would really be nice to see the price numbers on the right hand margin.

PrincipleAnalysis_Blogspot_Com said...

They are actually there.  Perhaps its your screen resolution or you're using a smart phone.  Click on the chart and it should enlarge it to where you can see the prices.

Perthx said...

Clicking on the screen does it ty, and keep up the good work.

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