Prechter Discusses Market Forecasts on CNBC Closing Bell
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MONDAY'S POST
Internals today show a countertrend rally. Volume continued to contract today as the NYSE only hit 1.1 billion shares whichs is about half of what we've been seeing the past couple weeks. The price move was big, but internally it's hollow, suggesting this rally is countertrend. I'd continue shorting rallies.....this surge the past few days should be completely erased in fast order pretty soon. If a bottom for the year was put in last week, there'd be a lot more volume on the rallying the past few days, in my opinion.
It's just a waiting game for the bears in my view. Stocks look strong as they shrug off bad news and rally on mild good news. The market is clearly relieving its oversold condition from the past few weeks of heavy selling. Right now the S&P is in a good and typical reversal zone for 4th waves. Fibonacci retracement levels of 38% - 50% of the prior move tend to be good areas for reversals to happen. The problem is that there is virtually no evidence that there is a reversal, or that one is coming. The market is is full bull mode at the moment. The daily RSI has come out of significan oversold territory, and another day or two of up closes should prime it to get ready for another downturn.
So although there's no evidence of a top in place, I'm watching the S&P's 1200-1223 area for signs of a reversal so I can add to my shorts.
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For continuity purposes I'm posting the follow up to last Thursday's short term chart forecast. According to this count, Minor wave 4 is coming to an end. I still feel we need some more up/down movement that's weak internals, i.e. low volume with dragging momentum. I wouldn't doubt if today starts that pattern, but it will probably continue at least another day or two before reversing sharply lower.
The euro has made a new swing high and is trying to breakout to the upside. It has yet to take apart the series of swing highs laid before it though. Breaking above 1.4600 would probably point to a sharper move higher in the coming days. I'm now neutral the euro.
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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