Monday, October 31, 2011
Stocks Go Flat After Big Rally Last Week; Evidence of Euro Top Mounts
The action into the close will be telling. And keep in mind, it's the last day of the month so end of month trading can make things a bit whacky. I have a feeling this week could get pretty wild as November gets underway, and it's a month that has been particularly brutal to the euro in past years which could be reflective of what will happen to stocks.
Free Trader's eBook Until November 7th, 2011 from EWI
And speaking of the euro, here she is. On the daily chart you can see the top from last week took place at a very convenient spot, the 78% fibonacci retracement level. If the big bearish candlestick on the day holds into the close, I will definitely be taking another stab at the short side on this pair.
Learn Elliott Wave Principle
In addition to the reversal right at 78%, the euro declined from the high in five waves. This in-and-of-itself is enough to get EWP bears in on the short side in my opinion. I'd like to get a nice bounce from here to give me better positioning on the short side though. And when you combine this with the fact that November, and especially the Thanksgiving US holiday, tend to be very bearish for the euro, it definitely has me salivating to short this pair soon.
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.