Today was options expiration day for the first quarter so volume was quite heavy, yet the net result in price was almost neutral. Not much to obtain from internals today with that in mind.
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But with no solid evidence that a top is in place, we have to respect that the trend is still up for now since there is a well defined series of higher highs and lower lows. We need to see that trend break down, preferably with a nice reversal pattern near the resistance levels I cited, before I will take a short position. Until then, I will remain on the sidelines.
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The euro is tracing out the flat correction I put in my last post. Although flat corrections for 2nd waves are rare, it's still possible here. The sharpness of the rise also coincides with the wave (c) labeling since C waves are impulses and therefore very strong. I expect the 1.3200 area to cap the rally, but if it doesn't and it follows through to the upside, then another pattern is probably forming. Most likely it will mean that the 1.3000 level was reached by a 5th wave ending diagonal instead of a (b) wave like I have labeled above. If correct, then there's certainly room for a lot more upside. But 1.3485 remains the line in the sand for the bearish count regardless. As long as that level remains intact, I'm bearish 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.
2 comments:
A volume spike like this has preceded a market move in the opposite direction in the recent past. Reading the volume is not easy but it does give out important clues.
Yes but keep in mind it was also optioins expiration day which leads to big volume numbers as well.
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