Thursday, August 16, 2012

Stocks Pushing the Bears to Limit; Euro Setup in Place

Stocks are pushing the proposed Minor wave 2 to the limit.  I am not a blind and dumb EWP follower that just falls in with the mass herd of wavers, I know this count has now become unlikely.  But on the flipside, many momentum indicators are waning, and the rally from the Minor 1 low is choppy and overlapping, which all suggests it's a correction.  So is it wise to get long here?  I don't think so.  If anything. the risk/reward favors the bears here.  Shorting now can leave us with a stop just above 1422.38, risking about 18 points to make hundreds if the wave count above is correct.  Other than that, I see no reason to take a position in this market at the moment.

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As for the EUR/USD, I'm keeping it simple as I usually do.  The rally may be faultering here, but the series of higher highs and higher lows is still intact.  So I want to wait for that uptrend to break down before getting short.  A nice break of 1.2242 should break the uptrend and result in more heavy selling to new lows.  I have a sell order in at 1.2230 which will execute a protective stop order at 1.2400.

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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.

4 comments:

Hate_free said...

http://3.bp.blogspot.com/-MFm846VHBks/UB11dlqpwdI/AAAAAAAAALo/9ptujBSYPK8/s1600/daily+adx.jpg

scout_lt said...

Our count in S&P 500: http://blog.wavetrack.com/sp-500-breaks-above-the-april-12-high-whats-next/
 

PrincipleAnalysis_Blogspot_Com said...

Certainly possible, but you're counting it as a "flat correction" where the B wave exceeds the wave 1 high.  In flat corrections, the A wave is composed of 3 waves but the decline here looks more like a 5.

scout_lt said...

 It's true talking about S&P 500, but DJI is looking three'ish at the same stage. That was one of the reasons to be suspect about 5 wave drop.

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