Nothing has changed in my outlook on stocks. They continue to trade heavy and the trend is still down. Some indicators are now oversold intraday, but there's usually a lot of divergence occuring before a meaningful bottom gets put in, and that's not there quite yet. Stocks may bounce in the very short term, but the trend remains firmly down regardless.
The euro appears to have finally topped and is now going to play catchup with stocks to the downside. Looking above at the 2hr euro chart you can see a strong rally leading into a head and shoulders topping pattern. This is a good sign the euro has toppped.
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Another good sign the euro has topped is the impulsive decline it's tracing out from the high. Not only is there a clear small 5 waves from the top, but wave (iii) is an extremely sharp decline which is what we'd expect to see if the above count is correct. So the euro looks very weak and vulnerable here.
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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