Wednesday, November 16, 2011
Thursday Should Eliminate One of the Two Top Counts; Euro Trend Remains Down
Internals flipped bearish with the declines today and volume increased as well. 915 million NYSE shares traded today which is a strong increase from when the market was pushing higher, however in the big picture this is still fairly weak. It instills confidence in that in the longer term picture, the trend is still down, but for the short term I'm not sure this lends itself to the start of a wave 3 at various degrees. But we'll see.
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A sharp move higher on solid volume would put this count as top choice and give wavers a good opportunity to start establishing short positions above 1300 in my view since thrusts from tirangles are finishing moves are quickly and completely reversed.
A break below 1225 would pretty much erase this count from contention and put the first bearish count post at the top as the best viable count. For those of you who subscribe to EWI's Short Term Update you saw what Steve Hochberg had to say about the triangle scenario and I feel it's very compelling myself. It's also a big reason I have the two counts listed the way they are.
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After a nice clear ABC rally with a B wave triangle in the middle and a C wave that stopped around 78% fibonacci, the euro did what was expected, it fell to a new low. The euro continues to decline impulsively and rally correctively (3 waves). I see no reason to abandon the bearish stance here. I remain short this pair.
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.