Stocks Stair-Step Lower; Euro Surges but Remains Short of New High

Internals today show medium bearish momentum behind the move today.  The ups and downs are really quite normal in comparison to the price action today, but the key number here is volume.  On the NYSE, only 963 million shares were traded.  So although today's price action and internals were firmly bearish, there wasn't much consensus internally for the moves today.  So tomorrow will be a key day as more traders will be at their desks and hitting the go-buttons.  Below I mention the bears' breaking point to the upside, so the bears need to see that level hold and volume increase on moves to the downside if a larger downtrend is fact underway. 

As for the short term, with a series of lower highers and lower lows on the table so far, I'm short term bearish this market.  But without clear and definitive impulsive declines it's hard to get too excited in the medium and long term as a bear.  Hopefully we'll get some clarity tomorrow.  Watch for volume in conjunction with the price action.

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The wave b triangle that was left on the table Friday is now so unlikely that it's practically eliminated from contention.  That leaves the aggressively bearish count as top choice.  With the series of lower highs and lower lows in place, it's possible this count represents that a series of several 1 and 2 waves are unfolding at varying degrees.  If so, 1325.74 needs to remain intact for that scenario to unfold, so I remain bearish as long as the S&P stays below that level.  Ideally, the market should rally little from here.  At this point with all the choppy movement with a downward bias, the bears would ideally like to see a sharp move lower to resolve these proposed 1 and 2 waves at various degrees with a sharp downward 3rd wave.  I know that may sound confusing, but the bottom line is that a sharp move down on strong volume real soon would put the longer term bearish wave count in a strong position.

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The euro has rallied much more than expected.  If the euro has started a downtrend from the March 7th high, then 1.4029 obviously must remain intact.  But with the euro so close to that level it's tough to be confident it will hold.  That doesn't mean I'll turn bullish if the level is exceeded.  I'm long term bearish the euro so I'll be looking for shorting opportunities only.  If 1.4029 is broken I'll sit on the sidelines until signs of another top present themselves.

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.