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| Last year's scorecard |
Speaking of reversals, I was hanging out at the office in Memphis on Friday watching the quote boards as the dollar staged its own very impressive reversal from below 75 to over 76 all in the same session. Of course, I was out of the market and had no intention of trading while on vacation but was terrified I was missing something after seeing that display of strength.
What really bugs me though is that we haven't yet seen a material correction. Usually wave twos are very strong "sucker's rallies." They're often confused with a resumption of the bull market -- bringing in new buyers at bad levels whose selling forces an extended third wave when recognition of the new trend sets in. The good macro news out of France and Germany Friday morning should have been a perfect catalyst. But all I see on the charts is a weak move that didn't even hit the 38% Fib or challenge support.
Still, the charts are telling me to start legging back in, so I'm nervously doing just that. These levels are cheaper than my exit so it's still a gain for me.
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| Dollar Index Hourly |
The Euro does look strong today and I could see this strength continuing to put in the right shoulder.
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| EUR/USD Daily |
The Russell looks very weak and vulnerable. In addition to the daily negative divergence, it has now convincingly broken through an extremely important trendline.
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| Russell 2000 Daily |