Medium Term Outlook for Stocks, Euro, Clearer than Long Term

Internals were flat today and volume was extremely low at 819 million shares on the NYSE, so enthusiasm to buy the rally here has waned.  I think that a small decline or some sideways action the next few daysmight be in order.

Stock Outlook Mixed; Euro Breaking Down

Late last week we saw some topping action that suggested weakness going into this week.  And we got it.  But it may be over now.  There is still a clear 3 wave decline (ABC) from the high on the year in the S&P, so a new high on the year seems likely.  We can't forget that.  Only the Nasdaq 100 managed a new high while the other major indices failed.  Now, the rally from the wave C low looks impulsive, with the recent weakness this week being a wave ((iv)).  If correct, stocks should be on their way to new highs on the year soon.

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