Wednesday, October 3, 2012
Stock Momentum Pointing Down; Dollar Bottomed
Note: I always recommend taking advantage of free resources from reliable sources. An Elliott Wave Principle website, WaveTrack, is offering free access to their Elliott Wave Compass report until October 7th, 2012. Take advantage, wavers!
I normally focus on the euro and not the other majors, but the euro is not giving me a clear signal here and the British pound is. On the daily chart you can see a big outside reversal candle followed by daily candles with long top-wicks suggesting a lot of selling pressure. Today the pound has faltered so far suggesting the bears are taking control. Now I know the outside reversal candle did not occur at the absolute top so some people may disagree with me here. But with all the selling pressure coming in after the formation, it's close enough to the top for me to get me to short. I'm short the euro and the pound right now since the evidence supports that a US dollar bottom has occurred which should put pressure on these european currencies. A 5 wave decline soon, in either the euro or the pound, would be welcomed even more.
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