The stock market went on a sharp rally today, but this could be expected since the Russell 2000 and Nasdaq 100 both sported 5 wave declines coming into today (see attached charts). Notice that there is little room left to the upside in both these indices, so we all know exactly where I'm wrong and it isn't very far away. These two indices basically need to fall almost immediately from current levels for this count to remain on track, otherwise they are clearly extending their gains for the unforeseeable future.
Of another note is the action in the Dow. Notice that the Dow made a new high today but the S&P, and most other indices, did not make a new high (see attached charts). As long as this non-confirmation remains in place, and the five wave declines in the NDX and Russell remain intact, the market should decline immediately. Retail sales and unemployment data are coming out first thing tomorrow morning, as well as some earnings reports, so tomorrow is poised to be a volatile day perhaps. With the evidence I see right now listed in this post, I think that volatility will be a strong move to the downside. The risk of trading this is very tight and small.
The EUR/USD rallied to a new high overnight but is back to where it was yesterday. The 4th wave is getting quite extended in time compared to the wave 2 of the same degree. However 4th waves can tend to be long sideways affairs. A sharp decline in the stock market should coincice in a wave 5 decline to a new in the EUR/USD as well. But overall structure and risk is not that clear in this pair right now so I have no position in currencies at the moment.
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.
3 comments:
god i hope you are right
been reading blogger after blogger calling tops only to revise wave counts
it does look like there is no more room on these wedges
tomorrow is some sort of fib time retracement in terms of day between P1/P2
also friday is solar eclipse which some believe portends a change in trend
Thanks Todd.
For my part, after EUR/USD failing to break 1.4216 last week, I'm a lot more inclined to think the dollar has already completed wave 1 down and has been in a wave 2 pullback the past few weeks. If that's the case, hopefully wave 3 down in the dollar will finally put an end to the stock market rally.
i agree with anon, i hope you're right ;-)
the market feels like it's been propped up as long and as far as is reasonable, even with govt assistance!
meanwhile, glad you have such great charts, on both the markets and the dollar
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