Tuesday, August 21, 2012
Stocks Make New Highs; Euro Rallying in Double Zig-Zag
Sentiment Measure Shows No Fear of Major U.S. Stock Decline
The EUR/USD thrusted from a triangle last night, and judging from the structure preceding the triangle, it looks like the triangle was an ((x)) wave (according to EWP, a triangle only occurs in 4th, B and X waves). That means the thrust higher right now is a wave (a) which will be follwed by a pullback to around the ((x)) wave triangle apex for wave (b), then one more final rally for wave (c) of ((y)) where the EUR/USD should form a major top. Fibonacci retracements and the prior 4th wave converge around the 1.2700-1.2800 level (my lines on the chart above are not exact projections), so I'll be looking for a reversal in that area to establish short positions. Keep in mind that the larger trend is firmly down though, so surprises will be to the downside.
Learn Elliott Wave Principle
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.