Stocks Bounce to Relieve Severely Oversold Condition, then will Fall to New Lows; Euro Gap is Bearish

I had a nice week off with family and friends, gobbling up turkey all weekend and I hope you all did too.  And speaking of turkey, I feel like one now.....boy did I eat a lot.  I better hit the gym again to train for the next upcoming holiday season gorging I'll be doing in just a few more weeks.

Stocks declined last week despite the fact that it's usually a positive week for stocks historically.  Volume was light, of course, but just the fact that the market declined and couldn't hold a rally is a strong sign to me that there is a strong larger downtrend in place.  But after such a long and slow downtrend it has left the market in severely oversold territory, which has led to today's bounce.  Again the bounce appears to be tied to "hope" of better days in Europe.  And we wavers know this will not result in any sustained rally, so it merely presents a good shorting opportunity.  The count is posted above, the bottom of wave i is my stop level just above 1225.

Prechter: "The Trend Is Exhausted"

The euro popped hard at the open Sunday but has left a huge gap open as a result.  Gaps are usually filled, and there is no reason to doubt that the downtrend is still intact for the euro.  So I'd be shorting rallies, especially until that gap is filled.

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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.