Euro FXE ETF In Pre-Crash Mode
Stock-Markets / Financial Crash Jun 12, 2012 - 02:46 AM GMT
FXE closed beneath its Head & Shoulders neckline, short=term Trend resistance at 124.86 ans hourly Cycle Bottom support/resistance at 124.31. This retracement may be the equivalent of point 7 in the Orthodox Broadening Top formation, since the retracement was too weak to revisit the lower trendline near 127.50. Normally a third wave is the strongest, but it appears that wave (5) will be the strongest this time. The governing E.W. rule is that the third wave cannot be the smallest.
I am still looking for a crash in FXE and the anticipated Master Cycle low by June 18, only a week away. There is no reason that I can see to prevent it from going the full distance in that time.
GLD is on another variation of the same cycle as FXE. Unfortunately there is a lot of overlap, so the waves are numbered differently. It also has its Master Cycle low due on the 18th. It will be interesting to watch how this is accomplished. GLD appears to be a reluctant decliner. There is a lot of “noise” in these waves. However, I believe that GLD is being brought down by margin calls rather than natural selling. Once it gets below 148.53 the wave three personality should emerge.
HYG appears to have made and irregular correction and is ready to decline below its October 2011 low. It closed just above short-term trend support at 87.68 and its Head & Shoulders neckline at or near 87.50. It just completed point 7 in its Broadening Wedge formation which anticipates a 20% average decline.
TLT may have had an early Primary Cycle high on Friday. Today it appears to have completed a reversal pattern and tomorrow is the next pivot day. These are all reasons to sell TLT. A trendline break would be the icing on the cake.
UUP tested its lower neckline on Friday and rose above all resistance today. It appears ready to break above its larger inverted Head & Shoulders neckline at 22.92. It has a minimum of a week of rally ahead of it and maybe more. During that time, it should meet or exceed its Head & shoulders target.
I have a trip planned for tomorrow afternoon, so I may not be doing a Closing Commentary on the customary Tuesday afternoon. Depending on how the decline progresses, I may do a Closing commentary on Wednesday.
Good luck and good trading!
Tony
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Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.
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