Today's market reversal was nice, and also very predictable in real time. The market surged to get solidly positive after starting the morning sharply lower. So it seemed the bulls were back in control. However I looked at the euro and it was still trading heavy by blazing new lows still. And looking at the bank ETF (XLF), it was almost 0.5% negative while the major indices were surging well into the positive. That divergence was enough to get me to add to my small short S&P position. Immediately after that, the market tanked and didn't look back the rest of the day. Good news for a bear like me. But looking at the end of day data, I'm no longer impressed. Volume stood at only 945 million shares which tells me today's decline might just be some mild profit taking before Obama's speech, and I believe the Fed spoke today too. So I'm unsure if a top is in right now based on the volume I saw today, and the wave count isn't helping much either because it leaves the possibility for one more high before topping. So the door is still open for a short new high tomorrow or Monday.
Those Steely-Eyes of J.P. Morgan: Could They Help Us Today?
The rally from the Minuette wave (i) low looks impulsive. This means that it's probably just the first leg of a longer and larger correction. So today's decline is probably a "b" wave, and wave c will complete Minuette wave (ii). I'm not certian at all this will occur though since the correction is already quite deep. A top may already be in. Either way, the Minor wave 4 high should not be exceeded and the risk/reward favors the bears here shorting into rallies, in my opinion.
Learn Elliott Wave Principle
Ah, Mr. Euro finally does what he's told and falls hard from his consolidation earlier. The move to 1.3800 I've been calling for is near and should be accomplished quite shortly. Whether that level acts as a floor for the euro to bottom at, or just a speed bump it blasts through, I'm unsure of. But the path of least resistance now is still down in my view.
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.
2 comments:
Hello Todd,
how are things going? Hope all is well.
Thank you very much for your constantly very good analysis. You are my daily stopping point -)
Regarding EURUSD: momentum in the last push down is very high. When you watch momentum with Awesome Oscillator, it is to be best watched with 120-140 bars in the analysis. Therefore I set up a 90 min TF to analyse the whole downward movement since the top at 1.45x
This analysis suggests, that the last moves down from 4280 might be a wave 3 territory. Switching to daily TF strongly supports this view, too.
BTW: do you have an actual count of Gold?
Wish you all the best,
Markus (Infinitus)
Hi Markus, good to hear from you again. Hope all is well with you too!
I like your analysis, especially about a 3rd wave for the euro. Momentum and intensity certainly support it like you said. I think most of us knew that the long consolidative pattern we saw for weeks was going to result in a large strong move. But I was unsure of what it would mean for the bigger picture.
I don't have a gold chart because I'm a dog at gold. I've tried trading gold and silver many times in the past and have failed far too many times. In fact, I called a gold top last week and this week it made a new high. So I don't even bother developing counts for the metals anymore. I mainly just follow price action and candlesticks since gold relates to currencies and stocks sometimes.
Talk to you later,
Todd
Post a Comment