This Elliott Wave blog is dedicated to sharing Fibonacci ratios and other technical analysis for forex signals, index futures signals, options signals, and stock signals. Elliott Wave Principle puts forth that people move in predictive patterns, called waves. Identify the wave counts, and you can predict the market.
Stocks continue to trade horribly and so the downtrend remains well intact. The bulls were at it again today, trying to put a floor in this market and surge the market higher. However the rally stalled late in the morning and flip flopped around until eventually collapsing into the close. The buying power just isn't there, and yet there is no panic despite the constant selling pressure the past few weeks. Bottom lin: expect the market to continue lower for at least the short term as it keeps the trend of lower lows and lower highs intact.
The euro is still looking farely strong although starting to show signs of possible weakness. But right now they're only "possible signs" of weakness, nothing convincing. Momentum has started to diverge and the euro is having a hard time sustain its recent strength on the surges higher. Once I get a reversal bar or impulsive decline, I'd be slamming the short side on this.
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.
Stocks continue to trade very heavy. The bulls attempted to put a floor in the market through the first half or so of the trading day but gave up as the close neared. The bears still have control and today's internals highlight that fact. Volume was modest at 954 million NYSE shares traded with 92% of stocks trading to the downside, and 449 of the S&P 500's stocks closing the day down. The selling in June is probably more than just some kind of new month profit taking since May failed the rally for the year. The decline has developed into a little more than that. But without a clear EWP count, I'm still cautious getting too excited and overleveraged on the bearish side here.
Without a clear impulsive count on the decline I have to use retraint on the short side. On the last swing high (3rd red line to the right on above chart) I thought shorting after that day's close was a good risk/reward opportunity on the short side since a new swing high failed to be established. That "bet" paid off well as the market has slid ever since. Late last week I thought taking profits on part of that short position to protect gains was a good idea. The market has continued lower though. But I would not close the rest of my short position here since there is no sign of a bottom. Granted, those signs often come in the overnight futures session and there's little one can do to protect themselves from a monster rally in the cash market first thing in the morning. But I'm going to play it tight and protect gains and simply trail this decline lower until I'm stopped out.
The play here is simple, as long as the market keeps making lower highs and lower lows, I want to remain short. If this is the big Primary wave ((3)) then there will be plenty of opportunities to pile on after we get some big impulsive wave counts. I don't want to get ahead of myself though, I want to trade what I see now, in the short term. And the short term action tells me to play it on the short side, with a small position, and have a quick trigger finger to stop/exit out of the position.
The euro has been a bit frustrating lately. Stocks have fallen and yet the euro has continued its rally. It's now very deep for the projected (c) wave of a flat correction so I'm not that confident in the count here. There's nothing suggesting the euro's rally is nearing an end other than this wave count. If the count is correct, there is little room for the euro to move any higher. As a euro bear I'd like to see it reverse lower very soon to keep this count in play.
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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.
News headlines are looking awfully bleak this morning. I said yesterday that I expected some follow through to the downside this morning and I'd take profits when that happened. Well that's exactly what we got, and taking profits seems like a good idea with these gloomy headlines above. I'd still keep some position on short, but I'd trail the stop down with the market. It's approaching oversold on at least a short term basis pretty soon.
Bottom line: The market has fallen so much so fast that we are approaching oversold on a short term basis. When you combine that with the gloomy news headlines we see this morning, I'd like to take some profits here to protect gains, and then trail my stop lower as the market heads lower.
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.
Stocks took a pounding today with the Dow losing almost 300 points and S&P losing over 30 points and closing on their lows. It was an across the board selloff as all the major indices/sectors were punished with exception of the safe haven sectors Staples, Utilities and Health Care down the least. Internals in the overall market were also bloody as declining stocks, and declining volume, well exceeded the advancers. Normally there is a relief rally after such a bloodbath internally, especially since today is the first day of a new month. But seeing as that the downtrend was held intact yesterday by failing to make a new swing high, and today's S&P close was right at support, it's quite possible we'll get some good follow-through to the downside tomorrow, especially in the morning.
Yesterday the market's rally came dangerously close to making a new swing high which would break the series of lower highs, and therefore put the overall downtrend in serious jeopardy. After that failed new high, the market sold off sharply today. Those of you who took advantage of the bearish side for a short term risk/reward trade like I mentioned yesterday did real well. And I think the market will continue lower through the current support level at least through tomorrow morning. From there, getting an over 300 point Dow drop in less than two days would be good enough for me to exit at least some of that short term trade. Since the longer term trend still seems to be up since we don't have an impulsive decline yet, I'm still leary about getting too aggressive on the bearish side too long. So very short term, I'm still bearish, but longer term I'm cautiously bullish.
I changed the degrees of waves up one notch since the flat correction I've been tracking has really expanded here. I mentioned yesterday that I wanted to see if the euro followed through higher, or reversed and broke down lower, in the overnight session. Well it didn't really do either last night, but today it showed some shakey legs before finally falling late in the trading day. Other counter US dollar pairs like the AUD/USD and GBP/USD were punished much more than the euro, so looking at the EUR/USD alone for overall US dollar action wouldn't give you a comprehensive picture. Looking at the big picture, the US dollar appears to be getting its legs back again and poised to rally hard here which means the euro should fall hard. And looking at the euro's wave count here it suggests that a wave ((ii)) top is in. This means heavy selling directly ahead for wave ((iii)) down. I remain firmly bearish this pair as long as yesterday's high remains intact.
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.
