Bears Rest, Bulls Fail to Strike; Dollar Unchanged

THURSDAY'S ADDENDUM

The rally today is quite strong but has so far stalled at its peak.  It appears the GM news is getting everyone excited again.  But the optimistic extremes in sentiment measures still suggest there's not much room left to the upside.  The S&P broke above the descending trendline I've been following, but has not made a new swing high above 1207.  A reversal and close beneath that trendline, that sits around 1192 at the end of the day today, would signal that today's rally was just a fakeout and that more selling was coming our way in the following days.  But another surge higher above 1207 would confirm that the decline from 1227 was just a series of overlapping corrective waves, and that at least one more new high should occur to cap off Primary wave ((2)).

So in summary, a move above 1207 would confirm that the decline from 1227 was just a correction and that eventually a new high above 1227 is on the way to finish off Primary wave ((2)).  But as long as the S&P stays below 1207, more selling pressure is certainly possible, and a close beneath 1192 today would be a strong signal that the short term trend remains firmly down.

WEDNESDAY'S POST

Internals today were slightly positive yet price in the major indices was basically flat.  Volume drop significantly today compared to yesterday so there was little interest in "buying the dip".  Just another sign of the trend having changed from up, to down. 

Not much to discuss as far as the market structure goes since today was a dud.  Seems like a 4th or B wave at some degree.  The short term wave count is unclear, so I'm sticking to the basics.  As long as the series of lower highs and lower lows continues, I'm bearish this market.  So the bears must defend 1207 until an impulsive decline can be counted from the early November highs. 

The bears appeared to take a breather today after selling off the market hard yesterday, but the bulls failed to step up and take advantage of it.  Volume was low and the market barely moved.  I think this is a morale killer for the bulls so I expect some more selling to enter the market as the week winds down here.  As long as 1129.24 remains intact, then we have to expect at least one more new high for Primary wave ((2)) to top.  But for the short term, staying below 1207 still keeps the trend pointing lower.

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The US dollar barely moved today, giving us the flat charts you see above.  The euro's downtrend remains well intact and the british pound may be in a 3rd wave suggesting that we'll see new lows soon.  This means the US dollar still has a lot of bullish potential still.  Doing so will keep a lot of pressure on stocks and commodities. 

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.