Tuesday, October 11, 2011
1195.86 Broken, Stock and Euro Trends are Up
Stocks have been moving firmly higher the past few days leading into today's split market. Volume was real light again at 881 million shares on the NYSE, but that should be expected since this rally is part of a larger Intermediate wave (2). Today's volume with the fractured market MAY mean the rally is taking a break. Regardless, the larger trend looks to be up over the next few weeks.
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Looking at fibonacci retracement and resistance levels we can get an idea of where Intermediate wave (2) might reverse. 2nd waves tend to get to the 61% and 78% fibonacci levels before ending.The 61% level around 1258 looks like a good area to give the market some trouble since it's where Minor wave 1 ended, it's just above the previous 4th wave which is where a lot of corrections end, and it's a 61% fibonacci retracement level. With that hard resistance in place, I would think the market will have a tough time getting through that area without a major upswing in volume and intensity. But then it will have the 78% fibonacci level to contend with at 1308 which is also a prior congestion area over the past several months.
So, in summary, the market appears to be in an uptrend for at least the next few weeks. There will be pullbacks along the way, but overall, the trend looks up and I'm looking at the 1258-1307 area as a good reversal zone for Intermediate wave (2).
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The euro has bottomed along with stocks and should continue higher with stocks. I don't see any good opportunities in the euro right now, but when I see one I'll announce my thoughts on it.
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.