Wednesday, April 25, 2012

Stocks Look to Fall; Euro Firmly Bearish

Below I list my projections and stop levels.  As long as the stop levels remain intact and nothing significant develops, this post will stand as guidance for the foreseeable future.

The bottom line is that the S&P looks poised to fall soon.  It has either topped already with wave (ii), as seen above, or will do so with one more poke higher before turning down hard.  As long as 1422.38 in the S&P cash index remains intact, the index is very vulnerable to a big decline at any moment.  Remember, the Fed will make an announcement later today which could result in some volatility at the end of the trading day and into tomorrow. 

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The daily euro chart is very bearish as you can see above.  There have been several attempts to break down the 1.3000 level that have failed.  But with every attempt, more and more of the support is eroded until eventually there's almost nothing left.  The decline from 1.3384 is strong and the recovery from the 1.3000 area is choppy and weak.  I expect the euro to stay below 1.3384 and continue lower through 1.3000 quite soon.

Stock Market Turning Points: Has Wall Street Ever Warned You in Time?

The short term does not look good for the euro either.  The euro has really been laboring to make new highs since recovering from 1.3000, and the most recent high on the hourly chart was not confirmed by the RSI, suggesting the rally is weakening severely.  The Fed announcement can throw everything off quite a bit, so if you have a trade in, manage risk properly, buckle your seat belt and prepare for a possibe wild ride later today.  Overall though, as long as 1.3384 remains intact, I see the euro as very bearish.



Daniel said...

Totally agree with you on the EUR/USD. Have staked out shorts aiming for the same area as you have noted. Just a matter of being patient and letting the trade work (or fail).

"Men who can both be right and sit tight are uncommon.  I found it one of the hardest things to learn.  But it is only after a stock operator has firmly grasped this that he can make big money.  -  Jesse Livermore"


Curiousmind3861 said...

Thanks for your analysis. Please do not let the trolls get you down and keep you from doing what you are doing. Your work is greatly appreciated. Lately there has been a lot of whipsaws, shaking out both bulls and bears, e.g. today after the FED, yet the index closed pretty much where it was in the morning. Big part of the spx gain is from Apple. Do you follow gold and silver? If you don't mind, can you please look at their charts? Thanks

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PrincipleAnalysis_Blogspot_Com said...

Thanks for the comments!  It's people like you that keep my posting!  But trust me, you don't want any gold or silver charts from me.  Precious metals has been a trading disaster from me for my entire trading career.  I don't even attempt to analyze them anymore.  Sorry.

PrincipleAnalysis_Blogspot_Com said...

Glad you sent a Jesse Livermore quote, he was a fascinating man but had a tragic end.


steveo77 said...

 Bucky ready to rock 
We live in exciting times.  
Governments are struggling for their own survival, and they will go to the wall. 
The Military is tired of being used for political purpose. 
Gold is ready to rock upward, but so is Bucky. And Euro is ready to swoon. 
That can only happen and mean one thing for it to occur. 
Some serious shit is about to hit the fan. A real Black Swan that has been kept out of sight.  
to land in your front yard and shit up the place. Odds of a real black
swan on any particular day in "normal history" maybe .2%. Odds of a
Black Swan coming home to roust now? I would say 20% to 30%. Are you
Kind of ready to stack some more gold and silver and
platinum, but having trouble believing that Bucky and Gold rock at the
same time.  
The Bucky chart and the Euro Chart agree. Cable may have also reached a blow off top of it's own. 
MUST save Spain at any cost or the "cost" will be a loss of credibility
in the Fiat Ponzi. What if they can't save Spain or it turns into a
veritable war of sorts, Germany stomping back to the Mark, trade wars,
gold functioning as SDR's.

Stmoneymantra said...

your elliot wave anlysis on euro is superb.keep it continue.regard,ravindra.

PrincipleAnalysis_Blogspot_Com said...

I'll sure try!  Thanks!