Tuesday, August 21, 2012
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.
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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.