Stocks Close Back Above Support; Euro Finishing up Flat Correction

Internals were strong as far as advancers vs decliners although volume was light at 881 million NYSE shares, much less than yesterday.  Regardless of total volume, the strength seen internally today suggests further upside.  But we'll see.

5 Ways the Wave Principle Can Improve Your Trading

Stocks Failing to Follow Through to the Upside; Euro Looking Vulnerable

Internals posted above.  You can see there is light volume today suggesting a lack of enthusiasm towards moving the market higher after yesterday's surge.  But closing higher on the day has kept me on the sidelines from getting short.  The short term has a slight bullish bias to it while the longer term indicators are slanted to the bearish side (especially momentum).  Below is what was posted mid-day today.

Stocks Indecisive, but Price Action Looks Corrective; Euro Resumes Downtrend

Internals today were fairly bearish and volume hit the 1 billion share mark on the NYSE, no doubt options expiration played a big part in puffing that number up  The first and last 30 minutes of trading pushed the market down towards the triple digit level on the Dow, closing barely in double digits at -93.  The first and last 30 minutes are usually when options expiration factors are the strongest.  Outside of those two timeframes, the market was fairly flat.  Tough to get any solid conclusions from this action in my view.

Stocks Slump; Euro Falls

Internals were very bearish today with down volume well exceeding up volume and advancers vs decliners on the NYSE and S&P heavily negative.  But total volume on the NYSE was quite light at only 865 million shares.  In the bigger picture, the internal structure of the decline over the past several weeks feels corrective.  But that doesn't mean it can't continue lower in the short term.

5 Ways the Wave Principle Can Improve Your Trading

Stock Trend Remains Down, Although a High Confidence Wave Count is Elusive; Euro Trend Down

Today's action was bearish in my view.  The internals showed mild total volume, but not as light as earlier in the week when we were in the 800s million shares.  But up vs down volume was only slightly bullish and the advancers vs decliners were mildly bullish.  Yet you'd think the market would look stronger than that internally since the whole trading day seemed like it had its rally jets on as it continually floated higher.  But it didn't.  Today' rise appears corrective when looking at it internally compared to the price action.  And when you add the fact that the gains the market made today fell apart sharply at the end of the day, price action also lends itself to a bearish day.  So even though the markets closed up today, it was not an impressive move higher by any means.

Stock Downtrend Tested Today; Euro Extends Correction

Stocks' downtrend remains intact by the skin of their teeth.  Today's rallys stopped short of making a new high above 1346.82 in the S&P.  So the series of lower highs and lower lows is still in place, and therefore the downtrend remains in place.  Shorting here against 1346.82 would be a good risk/reward trade for the bears.  Although in the bigger picture, with no clear wave count in place, and certainly nothing impulsive looking, I think this downward action lately is all part of a correction that will result in a move to new highs on the year eventually.  So if I were short, I'd play it tight here and only for the short term action.  Longer term the market still seems bullish.


How to Put the Wave Principle to WorkIn the video below, EWI Senior Commodity Analyst Jeffrey Kennedy walks you through a basic checklist of how to put the Wave Principle to work. This clip was taken from The Wave Principle Applied webinar, originally recorded for Futures Junctures subscribers.
Get 45 pages of FREE practical lessons in Elliott Wave International's Best of Trader's Classroom eBook


Get 45 pages of FREE practical lessons in Elliott Wave International's Best of Trader's Classroom eBook . Taken from Jeffrey Kennedy's renowned Trader's Classroom series, this FREE 45-page collection offers 14 actionable lessons that will help you determine entry points, stop levels and price targets for the markets you trade.  Download The Best of Trader's Classroom now

Stocks Punished After Hitting Resistance; Euro Poised to Fall Hard

Stocks took a pounding today with the Dow losing almost 300 points and S&P losing over 30 points and closing on their lows.  It was an across the board selloff as all the major indices/sectors were punished with exception of the safe haven sectors Staples, Utilities and Health Care down the least.  Internals in the overall market were also bloody as declining stocks, and declining volume, well exceeded the advancers.  Normally there is a relief rally after such a bloodbath internally, especially since today is the first day of a new month.  But seeing as that the downtrend was held intact yesterday by failing to make a new swing high, and today's S&P close was right at support, it's quite possible we'll get some good follow-through to the downside tomorrow, especially in the morning.