Other than precious metals, there’s nothing exciting to report today and nothing has really changed from yesterday other than some added risk for the bears in the euro. Internals today were average, with volume at 1.1 billion shares and slight bullish bias; a bit more than what I’d expect for such a flat close today. This is essentially the opposite of what occurred in yesterday’s flat close that had a strong bearish bias internally. So maybe things evened out a bit today.
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The above two counts remain my top choices right now. The flat correction for Minute wave ((iv)) is my preferred count, and Minute wave ((iv)) already complete and Minute wave ((v)) finishing up right now as my alternate count. The action in the coming days should help us remove one of these from top contention. Ultimately, 1129.24 is key for the bulls. A break below that level would signal that a major top was likely in place. Until then, we just have to do the best we can in maneuvering the short term gyrations of the market.
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The euro’s action is getting me concerned a little as a bear here. On the daily chart you can see that so far the decline is only 3 waves, which just a correction. But that will only be confirmed with a rally above the Minor wave 2 high at 1.3785. Recently, we had a Minute wave ((ii)) complete and another wave i and ii decline follow. Now the euro looks to have hit a floor today, so the next sharp move to a new extreme will be telling. Like I’ve said many times though, when I have to label my wave count with a lot of waves 1s and 2s only, then it’s most likely wrong. We’re starting to fall into that category now with the euro. Nothing’s confirmed though yet since no new highs have been made, but once a new swing high is registered, sound the alarms. This means the larger bearish case is rapidly and protecting gains is paramount to trying to grind out more future gains. So I’d like to see more selling enter this market soon to new lows so I can regain confidence in my bearish counts here.
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Aside from the downtrend of lower highs and lower lows still intact, another reason I want to remain bearish the euro is the action in precious metals, specifically silver. Silver has really surged this year and has shot significantly higher now for the second time and reversed. Looking at the daily chart you can see what I’m talking about. Also notice that the RSI is not confirming the new highs, probably due to the fact that the rallies have been so quickly reversed. But it seems that silver and gold are forming tops that may last a while. If so, I’d say it’s likely that the euro will be under pressure as well.
My make or break point for the bearish euro case is the Minor wave 2 high 1.3785, but breaking above any previous swing highs on its way up to the level will still get me to start reducing my position size.
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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