Stocks reversed nicely today but volume held at the same level it's been at the past few days while it was rallying. Probably the same folks who bought up this market just took profits today, lol. I would have expected to see higher volume for the kickoff of Minute wave ((iii)) down of Minor wave 5, but with most people waiting for Bernanke's comments tomorrow, the big volume probably won't come in until Friday or Monday. And I expect that volume to be slanted heavily on the sell side.
Using simple candlestick analysis you can see that the daily S&P cash chart shows a nice reversal pattern was put in today. A strong new high was made today compared to yesterday, and then a new low was made compared to yesterday, and today's close was beneath yesterday's open. All-in-all, a bearish formation. I expect today's high to remain intact for at least a few days while the market falls hard.
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I expect today's highs to remain intact and the market to fall hard Friday and/or Monday. A break above today's high will probably mean the Minor wave 4 high will also be broken soon as well. So as long as today's highs remain intact, I'm firmly bearish in the short term. The risk/reward strongly favors the bears here.
The GBP/USD traced out a 5 wave decline and made me a quick 100 pips in less than a day so I closed my short position this morning. I feel the pair can easily continue lower but I don't want to be greedy. Looking at the EUR/USD above, the sideways consolidation has really tightened lately, suggesting it is about to breakout hard and fast. Looking at the daily chart alone would have me thinking the pair will breakout to the upside, but the series of lower lows in combination with the fact that it appears gold has formed a major top, have me leaning towards the euro breakout happening to the downside. I expect gold and the euro to fall hard in the coming days.
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.