Nothing has changed in my view of stocks since my last post. But the euro has presented itself with a nice setup for the aggressive bears here. The Minor 5 wave count I labeled in my llast post has become invalid since the 4th wave entered into the 1st wave's territory. What's important now though is the strong impulsive nature of the decline and where the current rally has so far stopped at. You can see on the above chart that the euro has rallied sharply and closed an open gap left from a few days ago, but has then sharply reversed after doing so, hence the long candlestick wick. What's also of interest is that the reversal took place near a fibonacci 61% retracement level, which is a common reversal point for 2nd waves.
Although very risky, I thinking aggressive bears could attempt a short position here with a stop just above the overnight high. Sure, the euro can blast right through that stop like nothing at any moment. But that tight risk level is dwarfed by the reward potential of a catching the very early stages of a large 3rd wave down.
How to Find and "Hook" Potential Trade Setups
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.