Thursday, July 1, 2010

Market Timing Update (7/1/10 Close)

Stocks, Euro.USD, and Gold at cross roads

The near term trends for stocks (down), Euro/USD (up), and Gold (down) are established, identified and well discussed. So I'll focus on the risks of a reversal in today's update.

[Stocks] The near term bullish and semi-bullish counts for stocks would be [c]-up of 2-up or B-up of ABC-(X)-ABC, and (iv)-up of [i]-down of 3-down (Chart 1 and Chart 2). Note
[1] the positive price/RSI divergence that has been developing
[2] the proximity in size of the two down legs (e.g. (a) and (c) of [b] of 2) so far
[3] the sizable divergence between stocks and EUR/USD (Chart 4).

[EUR.USD] The bearish count for EUR.USD would be that EUR.USD in progress to complete
[c]-up of 4-up of (3)-down (Chart 3). The above mentioned divergence will simply resolve to the downside for EUR.USD as it did in the previous occurrences (Chart 4).
[Gold] The near term bullish count for Gold would be that the recent sell-off is only wave [iv] or wave 4 of a wave (5) advance that started in early February (Chart 5).

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