Still Waiting for at Least one More Pop in Stocks; Euro Rally Impressive but Overdone

I'm not impressed with today's decline at all.  It was a choppy grind lower on very light volume.  Granted, there was no follow-through higher from yesterday's big rally which the bears might call a victory, but today's pullback just feels like a pause before that uptrend continues.  Internals and price action suggest another move higher tomorrow and/or Monday.

Nothing new to add to the wave count.  A series of 5th waves are playing out and once finished, we'll have another shot at a major top being established.  But patience is key here.  Extremely aggressive short term traders could continue to play the long side when opportunities arise.  But outside of that, the risk is to the downside for everyone else in my view.  Patience is the trade right now for the rest of us.

Learn Elliott Wave Principle

The euro rally today was very impressive, and unexpected.  It puts the current wave count I have here in jeopardy.  The lack of a clear wave count on the downside move the past few weeks is concerning.  Usually when that happens it's because I'm expecting it to be an impulsive move, but the lack of clarity means it's probably a correction.  I have that concern here, and today's continuation higher elevates that concern.  The euro has probably ran too far too fast and the RSI is overbought on almost every intraday chart, so a pullback might be in the cards soon.  The strength and structure of that pullback should tell us more about the euro's future prospects.  I'm not getting long here, I still would like to be short, but I'm extremely cautious and managing risk tight on this one right now.  1.3433 is key for the bears but it seems that it's going to be taken out soon.  Doing so won't eliminate the bearish potential, especially if it's reversed in quick order because it may mean it's a wave C of a flat correction.  If 1.3433 remains intact, and a sharp impulsive decline occurs, it will mean the bears are back in control and shorting should be favored.

Understanding the Federal Reserve Bank



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.