Stocks Slump; Euro Falls

Internals were very bearish today with down volume well exceeding up volume and advancers vs decliners on the NYSE and S&P heavily negative.  But total volume on the NYSE was quite light at only 865 million shares.  In the bigger picture, the internal structure of the decline over the past several weeks feels corrective.  But that doesn't mean it can't continue lower in the short term.

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As I mentioned Friday the structure in the blue chip indices is very choppy and filled with 3 wave moves suggesting it's corrective.  But this correction can continue lower and develop into a WXY combination correction which it's hinting it now wants to do.  Without a confident impulsive count to focus on here, I'm going to stick to the very basics.  There is now a series of lower highs and lower lows in place from the high.  This will define the downtrend until I can better assess the short term wave count.  As long as the series of lower highs and lower lows remain in place, I have a bearish bias.  I am not getting short though until I get a good impulsive decline with supportive internals. 

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Last Wednesday I put forth an impulsive count with a flat correction to unfold before the resumption of the downtrend (click here for count).  The market has fulfilled the forecast so far, and in doing so it has given me confidence in my wave count labeling here.  Expect the euro to continue lower, and the US dollar to rise for the foresable future.

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.