Tuesday, January 24, 2012

Strong Sell Signal in Place; Euro Slaps Me


Comments from Friday's post remain in play today.  Volume today was extremely light suggesting major market players continue waiting on the sidelines.  News-watching seems like a good choice since the wave count and momentum indicators suggest a sharp reversal at any moment.  Maybe some Fed news will shake this market up in either direction.  So be alert.

And while you're waiting for the market to give you a reason to stay awake, check out Elliott Wave International's free 14-Page eBook, "How You Can Use Fibonacci to Improve Your Trading".  I always take advantage of free tools from reliable analysts.


The projected wave count remains unchanged.  The daily stochastic has been overbought for some time now, and needs relief, i.e. it needs to fall.  The short term average crossed down today so it's possible a top in price is in, although I would definitely not put in a short position solely based on this indicator.  It is quite primitive and not a good stand alone indicator.  It's much better used in conjunction with several other pieces of analysis, to include the wave count and internals for me.

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I got so bored with this market I did not notice that the market's lethargy triggered and then executed a VIX sell signal.  I only realized this after reading Steve Hochberg's Short Term Update from EWI.  The daily close beneath the lower bollinger band, and then the later close above it, executes a sell signal.  This is the most reliable timing indicators I know of.  Usually a reversal in stocks occurs within 3-4 days suggesting a reversal will occur this week in stocks.



The euro stood me up, reached back, and laid a huge slap down on me.....I mean just a hard 5 across the eyes.  I had a sell stop order almost right at the bottom this week which executed and then reversed sharply to a new high and stopped me out.  I mean, I lost money and had the position closed before I even got up in the morning.  Slap!  But that's the game.  There's a long reversal wick in place right now and 1.3050 should stop any rally attempt if a top is in and a head and shoulders pattern wants to unfold.  My jaw still hurts though, so I'm waiting for more selling and a series of lower lows to get printed before I tackle this one on the short side again.

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.

4 comments:

Curiousmind3861 said...

Do you see the spx going higher? Everyone is bullish now because of the fed and the breaking of Monday high all the way o 1328. Do you thnk ths is the v wave unfolding or iii wave? I am fully loaded in shorts, been squeezed real hard. But i am not cracking. When it goes down, it will be monmental. I can wait....

PrincipleAnalysis_Blogspot_Com said...

I personally wouldn't be fully short right now since the market's uptrend has not been broken.  I'd nibble at the short side on rallies, but I'd wait to get "fully loaded" when we get confirmation a top is in.  But that's just my opinion and my trading style.  The evidence supports a top at any time, the fact that everyone feels bullish is more reason to be BEARISH right now. 

selleurotickets454 said...

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