The market had trouble finding its legs today, but with 5 waves down possibly complete right now, the floppy nature of the price action and internals closing quite favorable to the bulls on a flat day, I’d have to say that we’re probably in a bullish correction sequence here, possibly for the rest of the week. Volume was a bit light at 1.02 billion NYSE shares, but despite the bulls’ lack of momentum and the flat close on the day, there were a lot more advancers than decliners on both the NYSE and S&P. Plus, up volume well exceeded down volume on the NYSE. Not exactly a show of force and control by the bears if the short term downtrend is still intact. The internals’ data suggest we’re probably in an upward correction right now that may last a day or two.
The wave count supports what the internals are telling us. With 5 waves down counted complete, we should get a series of 3 wave moves to complete Submicro wave (2). Right now the 3 wave rally that just completed is too small in price and time to make it likely to have completed Submicro wave (2). Plus with the internals still strong, it suggests more subdivisions higher. I’m projecting a “combination correction” in the form of at least a WXY at the moment. This should take us to the end of the week and possibly early Monday. 1332.09 remains the key level for the short term bears in my view. That level must remain intact for us to have strong confidence that a longer term downtrend is underway.
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The euro finally made a new high. I want to stand aside and wait for signs of a top and reversal before I attempt another short position. The larger term trend is still firmly down, but the short term trend appears to be up for the moment. Waiting for the short term bulls to give way to the long term bears again seems like the best option at the moment.
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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