Thursday, October 27, 2011
Stocks Well Into Reversal Zone; Euro Slaps Me
But being wrong in the short term does not make me wrong in the longer term. With the high on the year still intact, stocks are right in the typical topping area for 2nd waves right now, and the fact that this rally is based on some bailout nonsense in Europe, I feel this is simply just another time for me to nibble on the short side some more. I'll get more aggressively short on a nice reversal day, or simply a sharp decline on very bearish internals. But I have little doubt this market will not make it easy on me. I just have to put my emotions in a box, lock them up, and keep them under the bed for now so I don't do anything stupid.
Free Trader's eBook Until November 7th, 2011 from EWI
Looking at the euro chart I posted yesterday it still looks great for a top and reversal and has me salivating to get short. Then when I look at the above chart from this morning, I think I'm an idiot for wanting to get short. But that's the market. Right around major reversals in likes to suck you in and then slap you, making you feel stupid in front of your friends. And this slap hurt, I tried twice to short this pair yesterday and got stopped out twice. I'm waiting now for another reversal sign and will try again. I'm not giving up simply because I was wrong yesterday. Being wrong is part of trading. It will happen, and happen often. The key is to adhere to the bottom line we all have, which is to make money trading. Well, that's what I plan to do.....make money shorting the euro. Yesterday's decline looks like a 4th wave and the 5 wave rise into this morning looks like a 5th wave at some degree. I'm not sure if it will subdivide further into 4th and 5th waves so I'm going to wait for now. The top in the euro should align with stocks more or less.
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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.