Tuesday Jan 24, 2012
My thesis is that the Euro made an important low on the downgrade over a week ago. If that is true the weekly chart should show some definite sign of a reversal, let's look.
EURO
I am assuming the low for the move happened on the news event of hte downgrade of entire countries and banks in Europe. I labeled that as the end of Wave 5. This makes Wave 5 the longest which is not textbook but then markets don't always follow Ralph's rules. We can see a pretty clear five wave pattern down. The end of the pattern appears to have caused a final give up wash out in money flow in the bottom panel. As I showed yesterday the Italian bond market appears to have recovered in price. And while there are still Greece is going to default headlines well surely that is baked into the cake by now.
US Dollar
I could not get the annotation tool working but the same five wave pattern is here but to the upside. MACD at bottom does not look like it is beginning a new wave up to me. I suspect we see an A B C pullback to the 50 day MA here. Just my opinion.
NASD Summation Index
The NASD summation index has not equalled its earlier highs form 2011. The NYSE summation index has. But this graph says there is more left in the bull yet.
And breaking news Apple Revenue Blows Past Estimates
Gee think the QQQ will rally tomorrow in spite of hte FED meeting?
And as we say the sentiment is decidedly negative. If all these bears are really short the market they are not being rewarded. Let the market take out 1345, and the scorched shorts cover, and we go even higher. At that point Mr. Market starts punishing those that did not believe in him. Fund managers get paid for performance and being bearish has been punishing.
Pardon our typos, we have been trying to provide more updates than usual. We have genuine health issues with our eyesight and admit that too many typos get by us in our haste to post, pardon.
The FED meets tomorrow and that may cause the usual foot shuffling and speculating before the market gets going again.
TheF
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