Stocks Should Continue Lower; Euro Finding Support, but Should be Short Lived

Internals today don't tell me much.  Volume was farely quiet at under 1 billion NYSE shares, and the rest of the internals were slightly bearish just like the overall market was.  What is of note is the fact that the Dow took the biggest hit today and closed with the biggest losses of the major indices.  The S&P and Nasdaqs didn't do nearly as bad, so looking at the Dow alone for overall market performance today would not be wise.  It was basically a flat day with a slight bearish slant.  Whether the S&P and Nasdaq strength is a sign of a just a temporary relief rally, or the start of a more established floor and resultant rally is yet to be seen.  The evidence is still overwhelming that at least a decline of a few more weeks should be underway though.  I still favor the bearish side right now.

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The S&P is looking like a choppy mess.  Tough to label this impulsive at this point.  Right now it's looking more corrective in nature.  But a lot of big impulse waves often start out imperfectly, so I'm not going to hold this too much against the bearish scenario right now.  But it is on my radar.  As a waver, I'd like to see a sharp drop lower soon so I could label it a 3rd wave and see how the rest of the waves fit in from there.  But right now, I'm seeing only a choppy grind lower on the 30min chart.

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The S&P easily brokeout to the downside with its convincing move, and then close, below 1329.51.  Now I know that it basically closed right on that support level, but technically it did close just below it.  The S&P shot through the 1329.51 level sharply, and then did a slow choppy rally back near that level again where it closed today  That tells me the breakout to the downside has some conviction, and the move higher was just the typical retest of prior support before it turns lower.  So I expect more selling tomorrow to follow through with this downside breakout.  But if I'm wrong, and the market moves higher and closes well above 1329.51 then it was probably just a "false breakout", which would have bullish implications in the coming days.

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The euro is finding support around the 1.4200 level, but the bulls have so far been unable to sustain a rally or even make a new high.  Until that happens, the trend is still firmly down in my view.  Making new highs and rallying sharply here wouldn't necessarily remove the bearish bias I have, it would just lessen my conviction of it a little.

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.