Stocks Traded Well Today; Dollar Downtrend Remains Well Intact

Stocks traded very well today.  They started off floating higher and continued a slow methodical and healthy move higher without much volatility during and after the Fed action today.  This is either a great stepping stone for the bulls, or a big fakeout made to lull the unsophisticated bulls to sleep as the bears pull the rug out from under this market tomorrow.  I see no evidence of that happening though, so saying it will happen would simply be a guess.  Right now the evidence suggests the uptrend is still intact and higher levels will be achieved.

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With diverging momentum on the RSI, weak volume, and fairly optimistic sentiment, it's hard to think that the S&P is at the start of a 3rd wave higher which the bullish count might suggest.  Instead it still fits well with the combination WXY correction I've been tracking the past few weeks.  The X wave is a flat correction that will give way to a sharp 3 wave drop for wave Y.  But with the market looking strong at the moment, I'm not going to gamble on a short position here though.  I'd rather be long here with a VERY tight stop if I absolutely had to take a position.  But I don't, so I'm neutral at the moment. 

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The dollar's slow choppy grind to new lows the past several weeks has been quite tidious to watch since I'm waiting for a major dollar bottom and reversal.  But as you can see here, there are no signs of reversal at the moment.  Today's big volume was a result of the Fed action, and a nice sharp rally tomorrow might be a sign that today's decline was a capitulation move, meaning that a bottom is in place.  So a sharp rally in the dollar (sharp decline in the euro), would get me long the dollar and/or short the euro.  Until then, I'm neutral the buck.

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.

Market Should Float Until Fed Time; Euro Position Stopped Out

Waiting on shorting stocks until I got more evidence of a top proved to be a wise move.  However rolling the dice on the euro and shorting it prematurely yesterday was NOT a good choice.  Volume today was light overall, but much higher than yesterday's almost non-existent volume which was under 700 million shares on the NYSE.  Trader's are waiting for the Fed tomorrow before big volume moves occur I'm sure.  Tomorrow we get an early morning Fed announcement followed by Bernanke's face and speech.  So there should be increased volatility tomorrow and Thursday.  Be ready.....I'm looking to short when the opportunity arises.  At the moment, I am not short stocks or the euro though.  But that could easily change tomorrow/Thursday.  Be ready.

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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.

VIX Giving Stock Sell Signal; but only Shorting Euro NOW

Internals today show us a very interesting picture when you take into account the VIX stock sell signal in place right now.  Volume on the NYSE has to be one of, if not THE, lightest volume days of the year at less than 700 million NYSE shares traded today.  I know many traders are filled with ham and pies after the Easter holiday and are waiting for the Fed meeting this week, but still, 695 million shares.....that's some light volume, and a telling picture of how attractive the stock rally is at these levels.  Things should get exciting again when the Fed speaks later this week.

The VIX closed beneath its lower bollinger band last week and then closed back above it shortly after.  This is considered a stock sell signal which is often pointed out early by Elliott Wave International's Steve Hochberg.  Lately, this stock sell signal has not worked well, so I'm counting on it loosely here.  When it does work, there is usually a 2-5 trading day delay between when the signal executes and when a sharp selloff occurs.  So in that respect, a sharp selloff should ensue anytime between now and Wednesday, more or less.

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We've been here before wavers, and the short term we often get right, but then we end up getting our faces ripped off when we hold our short positions too long in hopes of the decline turning into a larger Primary wave ((3)).  This is why I insist on only playing the short term action and trailing stops, this way if the decline turns into something real big then there is a good chance we'll ride it all the way down anyway.  But if it's another fakeout, then we can protect capital with the trailing stop.  Right now the market is setup again for at least short term pullback soon.  The RSI is falling off a cliff and a small 5 wave rally appears complete, and when you combine that with a VIX sell signal, it suggests at least a modest pullback.

There are two things to keep in mind here for the bears:

1) the uptrend is not broken yet, so shorting here is very speculative and very risky.  More conservative traders might want to be patient and wait for confirmation, or at least some evidence of the uptrend breaking down before taking a position.  That's what I'm doing.

2) From the Minor wave 4 bottom there is not a clear 5 wave move higher, suggesting the rally is not over yet.  Sure, one can count it as a 5 wave move and complete, but it definitely wouldn't have the "right look", which is an EWP guideline.  So expecting a top here from an EWP purist standpoint would not be wise.

With all said and done, my thinking on this is that it's quite possible the market is forming another top (at whatever degree), but with too many loose ends here, I'm waiting on the sidelines for more evidence that the uptrend has in fact broken and that the short side should be favored.

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On the other hand, the currency majors appear to be breaking down.  The euro is sitting on a support shelf while the AUD and GBP have already broken down it appears.  Since the currency markets are so highly leveraged I tend to take more speculative positions since waiting for confirmation would make placing stops too far away for comfort.  I'm shorting the euro now with a stop just above last week's high.  Although this is a very speculative position I'm taking here, I think the potential reward is well worth the risk since the euro's larger trend is firmly down and I expect it to eventually get to parity once that larger downtrend resumes.

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.

Slap!!

This morning I woke up, sat up in bed, scratched my head and engaged in a blank stare at my wall as I tried to wake up.  I then grabbed my iPod to see what the markets were doing and when I saw what happened it felt like this.....

I shouldn't be surprised at this since I've come out and called for sharp selloffs the past few months and probably each time the market has made a fool out of me.  Looks like my bearish calls have become quite a contrarian indicator.  I'm going to change that though.

With today's rise above 1322.88, the move down earlier this week is a clear 3 wave drop.  So the simplist interpretation, which is what I usually follow, is that it was just an ABC corrective decline and the market should be resuming its uptrend now.

But not so fast bulls, the bearish count is still intact technically.  The 3 wave decline may just have been a very small wave ((a)), and now we're in wave ((b)) which took the form of a "flat correction".  Once complete, the market should then undergo a large wave ((c)) down as part of the larger wave Y of the "combination" correction I've been tracking.

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The next possibility is that the impulsive wave count is still intact and the funny shape is just a "flat correction" after wave (i) completed.  I don't like this count that much because the flat correction is quite long and deep, which is unlikely for a flat correction.  Although it's still possible so I'm keeping an eye on it.

Today's gap up formed what would normally be an "island reversal" but since the S&P was not in a confirmed downtrend we can't say that is the case.  However it is interesting that we have a down gap and up gap in the exact same spot.  If the bears don't drop this market soon and close the upward gap from this morning, I'd say that would be a very bullish sign for the days ahead.

So I was slapped by the market today and we are left with several options.  I like to choose the simplist of outlooks because that's usually the correct one, which is that this week was simply an ABC decline and now the uptrend has resumed.  The other options I mentioned are certainly still a possibility and any sharp reversal this week will probably move this bearish counts up on the probability chart.  So I'm just a spectator now.

Now if you'll excuse me, I'm going to play in traffic for a little while.....

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.

Stock Bulls Have Shakey Legs Here, Waiting for Bears to Pounce

Stocks rallied most of the afternoon but again did so on very light volume.  The bulls still haven't come close to taking back what the bears accomplished in just an hour or two yesterday on high volume suggesting the larger trend remains down.  Once this light volume float higher ends (short of 1322.88), the market should undergo more sharp declines to new lows.  I remain bearish as long as the S&P trades below 1322.88.

(POST THIS MORNING) Stocks trading very heavy.  Yesterday the bulls did everything they could to push this market out of the red from that deep early morning selloff but they didn't even come close with the Dow still closing triple digits on the day with very bearish internals.  Now today, again the bulls are pushing hard to get this market out of the gutter and so far are failing to do so.  This tells me the headwinds the bulls are facing here are very strong and that they will lose the fight to push this market higher.  It's like those old cartoons when the guy lifts something heavy over his head and his little legs are shaking rapidly as he tries to keep the weight up.  Well, the bulls' legs are shakey here. 

Look for this bull attempt to fail well short of the 1322.88 level.  As long as the S&P stays below that level, I'm bearish.  There is good potential for large gains on the short side here in my opinion.

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The above S&P chart shows the open gap left from Monday's big drop.  Stocks may attempt to close that gap at 1319.65.  But since it would be so deep and so close to the wave ((ii)) stopping level I'm not sure the bulls can accomplish a complete close.  Once the market moves into that gap area at all, be prepared for a sharp reversal at any time.  Playing reversal bars or reversal volume plays on the intraday charts may be a wise move tomorrow since the wave count suggests a big sharp decline coming soon.

Euro is bouncing along with stocks, once complete it should fall sharply as well.
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.

Wave (ii) is Over, Wave (iii) Down Now Underway

Wave (ii) was quite shallow and short, but that was probably a hint as to how strong the downward pressure is on the market.  Today's breakaway gap and sharp selloff is indicative of a 3rd wave.  And since we were expecting a Minuette wave (iii), this fits well within my wave count I've been tracking lately.  Expect lower levels in the coming days/weeks.  Risk should remain just above the wave X high.

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END OF DAY POST:

Just a quick addition to this morning's post: the market sold off hard today and spent the rest of the day floating higher.  But it still closed solidly lower.  And the move down was much stronger than the weak float to the upside, and overall volume and internals that include the move higher were still quite bearish as you can see above.  Volume finally spiked above the 1 billion share mark on the NYSE, but still quite short of my 1.2 billion share mark I'd like to see on a down move.  All-in-all though, with the wave count looking bearish and internal weakness accompanying it, this market looks bearish here for the short term at least.  That doesn't mean we won't see some pops here and there along the way, but the series of lower highs and lower lows should continue in the coming days.

The dollar broke out of its range and it did so to the downside as I suspected it would.  With sentiment at an extreme before the decline, and the long standing momentum divergences we've seen in the RSI over the past few weeks, the euro is certainly poised to continue lower from here.  I'm short and remain short.

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.

After 5 Waves Down, Stocks and Euro Look to Rebound

Volume remains light in the market, making it tough to get a definitive consensus of trend. Volume today was still well under 1 billion shares on the NYSE, so although there was a bullish reversal today, the light volume doesn’t make it a convincing reversal…..probably will result in just a day or two of rallying.

Looking at the wave count I’ve been tracking the past several weeks we can see that things are falling into place so far. I’m unsure of the degrees of trend here since the above degrees don’t fit well into the larger wave count, yet the magnitude of the moves shown here do in fact fit well with the degrees I plugged in here. So there’s conflicting issues here as far as degree goes so remain flexible in that respect.

Today we saw a nice bullish reversal since the market opened very weak and made a new low and then rallied all day and closed in the positive. But the damage has been done to the bulls since a nice 5 wave decline was printed with the action over the past few days. This suggests that the current reversal is the start of wave (ii) that should last Friday and probably at least some of Monday. The market should stay below the wave X high and eventually turn lower sharply with wave (iii) probably early next week. Ultimately, the Wave W low should be broken, which is a significant decline despite it just being part of a correction.

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Looking at the daily chart you can see that this latest rally has been done on very weak momentum as shown by the declining volume (also seen clearly on the SPY and NYSE) and RSI. This alone is about enough I’d need to see to be getting very conservative as a bull at a minimum. But I’m not a bull, so I don’t have that problem. The only reason I feel this is just a WXY combination correction unfolding is because the drop from the high on the year is clearly a 3 wave move, which means unless that high is broken then this entire move is most likely corrective all around.

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The euro’s wave count eludes me in the short and medium terms. But the long term count shows a clear downtrend. So I have a bearish bias and am currently short right now. The increase in volatility is a good sign a top is near, if not already in. A breakout should ensue soon and I feel that a breakout to the upside will probably be sharp, but short lived and sharply reversed. A breakout to the downside should result in massive US dollar short covering, sending the euro lower in a hurry. So to me, the best place to play this pair is on the short side when opportunities arise.

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.

Stocks Still Floating Around, but the S&P and Euro Declined in Five Waves

Volume is still light and stocks continue to flop around directionless.  However the wave structure may give us a clue as to a what the larger trend may be.

The S&P eeked out a 5 wave decline suggesting the larger trend is now down.  Unfortunately it's occurring with weak volume and mediocre internals to the bearish side.  So it's not a convincing picture....but it rarely is I guess.  The evidence is strong enough that the rally has exhausted, so I'd short rallies with a stop just above this week's high if I was an aggressive trader.  The market is trading heavy overall, and with a 5 wave decline on our hands, a bearish bias in the short term is warranted.

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The euro has also declined in 5 waves, although more sharply and convincing than the S&P.  Here too I favor the short side.


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.

Stocks Breaking Down, but Still no Volume

Stocks fell hard this morning, accompanied by solid volume on the decline.  But unfortunately that's all the bears could do.  Stocks rallied on soft volume the rest of the day.  So the closing NYSE volume number today is a bit deceiving since it's very light for the day overall, but what you don't see is that the early decline this morning had strong volume.  I would have liked to see a close today with 1.2 billion or more shares traded, but perhaps we'll get that tomorrow.

Stocks appear to be falling impulsively but we can't conclude that quite yet.  We still need one more new low to make a nice 5 waves down complete.  But the S&P must stay below 1322.94 to keep the nicely formed impulsive decline intact. 

As for the euro, it rallied sharply despite stocks losing ground this morning but then the euro reversed sharply and never recovered.  This looks like a nice reversal pattern and is worth shorting.  So I shorted the euro this morning with a stop at last night's high.

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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.

Stocks Look Vulnerable Here

I’ve been talking about how weak the rally looks internally the past few weeks and how I’m looking for volume to re-enter the market to give us some momentum in either direction.  I didn’t want to take a position randomly because I know how the market can easily just float higher and higher and higher on light volume for several weeks.  And that’s exactly what it has done.  But now the daily price action is starting to match the weakness the internals have shown the past few weeks.  Today’s internals continue that trend with a measly 817 NYSE shares traded, but decliners well exceeded advancers by 1,178; a bearish indicator here.

When volume returns, it should move this market sharply.  If it shoots higher with that volume, I believe it would be a capitulation move, not the start of the next rally leg lasting months.  So it should be capped and reversed in fairly quick order.  I wouldn’t short into the rally, I would simply get out of its way and let it run its course and wait for signs of a top.  Then I’ll try shorting against a recent swing high.  The other option is that the market just shoots lower from current levels either Tuesday or Wednesday this week.  If so, and volume increases on the decline, I’d short into that weakness. 

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With a clear 3 wave drop from the high on the year the only accurate way to count this is an ABC decline within a larger correction, most likely a WXY combination.  The market should soon be undergoing another 3 wave drop to form wave (Y).  Making a new high on the year would negate this count from contention and most likely mean the 3 wave decline was simply an ABC zig-zag correction within a larger 4^th wave.  But under this scenario, the market would soon top and reverse anyway.  So I favor the short side now and am looking for an opportunity to get short. 

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The daily S&P chart tells a grim picture for stocks.  Volume has fallen significantly as the market has risen, suggesting the rally has little teeth to it and that it’s most likely just a correction [which I’m labeling Wave (X)].  Also notice the RSI has already reversed and has been headed lower for days while price has consolidated.  I can’t emphasize enough how weak this market looks right now.  But without any solid evidence of a top, we have to expect it to float higher….and continue to wait.

The euro count eludes me for the short and medium terms.  The larger downtrend count remains intact though so I want to look for shorting opportunities.  A reversal day, sharp decline and/or an impulsive move lower would get me to attempt a small short position.  Aside from that, I’m on the sidelines here.

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.

Market Looks Weak, but will the Rally Stop?

This market is a snoozefest for a sidelined bear.  Internals continue to be lethargic, but price continues higher anyway.  Today's NYSE volume was a whopping 829 million on a flat day.  Very few traders have any interest in the markets right now.  And I'm one of them.  I still feel that when volume returns, we need to watch the price action and follow the herd, whichever way it's going.  Until then, I'm avoiding this thinly traded market right now.

Above is the S&P SPDR (SPY) illustrating the weakening momentum with volume increasing on the decline and decreasing on the market's rally.  Also note that the RSI has a bearish divergence in place and suggests at least a short term pullback is just ahead.

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Lastly, the major indices are diverging at the moment creating yet another bearish setup and opportunity for the bears to smack this market down, if they want to.  So far the bears have failed to muster up any strength, and when they have, they have failed to sustain it.  But above you'll see that the Dow has made a new high yet the Nasdaq Composite and the S&P has not.  As long as this divergence remains in place, the market is very vulnerable to sell off.  I personally would wait for some signs of a top, like an impulsive decline or midday reversal.  But for the gamblers out there, shorting the S&P or Composite with stops just above their highs would be a gamblin move perhaps worth taking.  But it's just that at this point......a gamble.

I've been having computer problems lately and have been working long days on a big project so I probably won't be back unless something significant happens in the market the rest of the week.  But I'll be back to normal posting next week.


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.

Market Continues Rally on Low Volume, but Danger Lurks

The internals today show the same picture we’ve been seeing the past week or so in that volume has been very light on this current rally leg. Today we had an uptick in volume relative to the previous trading days, but still light overall at 918 million NYSE shares. I don’t think the uptick today means much, other than typical midweek trading kicking up the volume bars a bit. Getting above 1.15 billion shares will get my attention though.

Unfortunately for the bears, the rally is starting to look quite impulsive. It’s quite a smooth and clean looking rally that has now gone quite deep. I still count the decline from late February as a 3 wave ABC move. An X wave, which is how I am counting this current rally, should be a bit choppier and composed of a 3 wave ABC move itself. But right now I’m not seeing it. Regardless, with very light volume throughout this rally, and the RSI in a position now that it has been at in the past when a decline was near, I’m on the lookout for a good short term shorting opportunity coming very soon. I’d like to see an up day that is reversed during the trading day with solid volume to support it. I’d get short with a stop just above the high on the day if that occurs. Other than that, an impulsive decline on high volume at any time would also get me on the short side. Until I get that, I’m waiting on the sidelines.

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This chart of the S&P SPDR (SPY) shows what I’m talking about when I mention volume is declining as the market rallies. This is typically a bearish development, but it can continue doing this for quite a while. So I want to wait for signs of a top and reversal before attempting to short.

Lastly, the Nasdaq 100 has a rally that looks the most like a nice developing 5 wave impulsive rally. If correct, the overall stock market probably has already bottomed and the bull trend has resumed. This conflicts with the evidence I’ve listed above on the S&P though, so we’ll have to wait and see which side prevails here. So watching volume in the overall market, and the wave structure in the S&P and especially the NDX, seems like a good idea to help us establish a high confidence low risk trade in the near future.

Still Enough Time to “Conquer the Crash”

The euro is flip-flopping around directionless this week and so the wait continues. So far there is only a 3 wave decline from the high which suggests it’s only a correction. But a 3 wave decline can easily develop into a 5 wave move as long as no rules are broken. So staying below 1.4219 would keep the possibility open for a 5 wave decline to develop from here. Breaking above 1.4219 would mean new highs were on the way soon.



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.

Stock Volume Suggests Selloff Lumes; Euro Bears be Ready

Internals today tell us that this market is still flip-flopping around with an upward bias on light volume. Today’s volume was greater than yesterday’s, but still very light overall at only 804 million NYSE shares traded today. Once volume comes back into the market, we should have more confidence in riding a trend for a few days at least.

The S&P is not only moving higher on low volume, but also on diverging relative strength as seen through the RSI above. This paints another picture of weak momentum on this move higher. But, the market can still float higher on this weak momentum just as it has done the past several days, but if we get a big volume spike on a nice reversal day to the downside, or accompanied with an impulsive decline, then I think it will be a golden opportunity for nice short trade. So I’m still waiting and watching for the next big move on high volume.

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If we put EWP aside for a moment and just look at the behavior of volume lately we can see what should be a concerning picture for the bulls. Above is the S&P SPDR the SPY. Notice how volume increased with the SPY’s decline, then fell off sharply when the market rallied. This tells me it’s probable that the larger trend is probably still down despite this long rally we’ve had the past couple weeks. So this is one of the things I’m watching that has me all over this volume issue.

Still Enough Time to "Conquer the Crash"

The euro hasn’t done much all this week. I think the risk/reward lies with the bears here so I’d be short against 1.4219. At this point, a break above 1.4219 would make the decline from the highs on this chart a 3 wave move which is a correction, and point to higher levels for the foreseeable future. So staying below 1.4219 keeps the bearish view intact with substantial rewards possible if the larger downtrend has in fact resumed.



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.

Still No Volume, But is Today's Reversal in Stocks Significant?

Friday's upday was accompanied by even lighter volume than the previous light volume day.  I think it was around 820 million NYSE shares Friday.  But the bears have not taken advantage of the thin bearish momentum and the market continues higher.  This is not the behavior I'd expect to see at a major trend change.  And with the S&P gap filled I would have liked to see a reversal quite soon, but it's not happening.  This is why I put the WXY combination count as top choice late last week.  I can still eye the WXY combination correction with the market being in the X wave right now, but with the series of higher highs and higher lows well intact, there's no reason to get short here in my view.  Although momentum is hallow, it's still up.  Until that uptrend is broken, I'm on the sidelines.  The market is in the middle of a prior congestion zone so it may staul a bit here.  It's reaction off the congestion zone will be important.  And whichever way the market moves when volume re-enters the market should define the trend for the next several days.

The euro looks like it might be starting an impulsive decline but it's too early to confirm it.  Looking for short opportunities in the euro, and long the USD, seems like a wise choice here.

Today we had a nice stock reversal at the end of the trading day which was really nice to see since the S&P is trading at the heart of a congestion area I'd like to see hold as resistance, and shortly after filling a gap at 1320.  You can see the internals above show a bearishly slanted market by the advancers vs decliners and up vs down volume despite the fact the market was in the positive most of the day.  The biggest problem here though is volume.  There was none today.  The NYSE had only 783 million shares traded, even lower than Friday's number.  So volume continues to decline every day.  So I don't have much confidence in this late day reversal......yet.

Like I've said before, the key is to watch for volume to enter the market again.  Whichever way the market moves on high volume (preferably over 1.1 billion NYSE shares at least) should define the trend for the coming days.

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The daily S&P chart shows a nice reversal pattern in the candlesticks.  But unfortunately since there was no volume to support for this formation, it makes it less reliable.  It doesn't mean we should ignore the signs of today's reversal, we just need to be cautious if going short here.  I personally am waiting for volume to return, or a clear 5 wave decline before I get short stocks.

Still Enough Time to "Conquer the Crash?"

The euro didn't do much today to report on.  It looks like it may have formed a significant top and has completed the early stages of a large impulsive decline.  I'll post a chart with a count when I have high confidence in its labeling.  But I'd still favor the short side on short term trades here.

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.