Internals today were a bit interesting in that we had a big surge in volume with 1.5 billion shares traded on the NYSE. What’s more significant is that the bears were in control most of the day on that big volume. So the bears flexed their muscle today. Also, S&P decliners far exceeded advancers at the close. The bulls have tried a few times recently to push this market higher when it’s down in order to establish 1174 as the bottom, but the bears are just too strong right now and keep winning the battles. And it’s looking like another test of 1174 might be coming soon, and as I’ve said before, triple bottoms are extremely rare so I would expect 1174 to be taken out rather easily. This suggests that my triangle count is wrong and that a zig-zag or combination correction for Minute wave ((iv)) is occurring instead. So a rally should occur quite soon if my triangle count is to remain on track.
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If the market is in fact in a triangle for Minute wave ((iv)) then Minuette wave (b) higher needs to get moving tomorrow. Right now, this count is looking suspect, and I'm hoping to get a big move in any direction soon so I can either keep or eliminate this count. This triangle is becoming quite long in time and is not progressing as one would expect. Tomorrow should be telling. Another move lower should test and break the 1174 area and open up the 1150-1160 area next. Only a break below 1129.24 would signal that perhaps something much bigger than just a correction was occurring.
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The euro continues to weaken as expected. The GBP/USD and AUD/USD look like they may be bottoming, so a euro rally would not be a surprise. But keep in mind, if the euro is in a Minor wave 3 down against the US dollar then there is much more potential lower for the euro ahead. And I would definitely NOT get long the euro here, that’s for sure. I see no reason to abandon the bearish stance on the euro, or the bullish stance on the US dollar at this point.
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.
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