Monday, Wednesday and Friday - Brief summary posts
Tuesday and Thursday - In-depth posts
Stocks should be in a wave 2, correcting the initial 5 wave decline I labeled in Friday's post. I cited 1290 as a good resistance area and that still holds true. I expect the rally to continue to at least tomorrow, but as long as it holds underneath 1302.67 I'd be shorting this rally regardless of how long it lasts. In Friday's post I mentioned that it would be likely we get a rally today and perhaps tomorrow so the market is moving as planned.
Looking at the internals we see strong action backing today's move higher, but it doesn't match the ferocity of the bears' move downward last Friday. For instance, there were 2049 more decliners than advancers Friday while today there were only 1139 more advancers than decliners, giving the bears an advantage of 910 NYSE shares. Down volume was 87.3% of total volume while today up volume was only 67.6% of total volume today, an almost 20% bear advantage. Total volume Friday was 1.34 billion (big for a Friday especially) versus only 1.19 billion shares traded today. So the internal composition of today's rally is far weaker than the internal composition of the decline Friday, suggesting that today's move was merely correcting Friday's decline. Look for new lows to come soon.
As for the euro, it snapped back sharply today but did not make a new high, neither did the Aussie, although the British pound did make a new high. I'm very bearish the euro as long as new highs aren't established so the risk/reward is phenomenal here since I believe the euro is headed to parity with the US dollar eventually.
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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.
1 comment:
The market is sure testing the wave count here for a top. And the euro already made a new high overnight. Both are very discouraging. Need a stock reversal from current levels soon. Otherwise it's clear that the larger trend still appears to be up.
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