Friday's Decline May be Sign of Significant Reversal

Although it is a laid back summer Friday, today's decline may signal a significant reversal is at hand.  I thought the major indices would march to new highs before any significan reversal but today's action may mean things fall a bit short of that target.  The Nasdaq 100 is the only major index that made a new high.  The Composite, Dow and S&P did not.  That in itself is a warning sign for the market since only the higher risk speculative tech stocks were able to make new highs while the big blue chip solid names failed to do so and dipped out of the rally early perhaps.

It is a Friday so I don't want to get too excited about the action today.  As always, the way the market closes will be important.  Closing on the lows would be a good sign a significant reversal is in place and that the bearish side should be favored for short term players, while a sharp rally into the close getting the indices to even or in the positive would favor the bulls.

Learn Elliott Wave Principle

The euro's triangle count is still well on track.  EWP states that "e" waves in a triangle are usually the result of a reaction to a news event.  Well, we had a poor jobs report this morning and the euro declined a bit, fitting well with the wave ((e)) interpretation I have above.  If the above count is correct, Monday should bring a very sharp rally thrust from the triangle to a new high.  But a break below wave ((c)), and especially wave ((a)), would negate the triangle and lead to further heavy selling.


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.