Monday, May 18, 2009
We are in an interesting dilemma. The market is following the path we wanted for the preferred count precisely hitting the 910 target, BUT... do we expect more follow? How high will wave B go? Is this really wave B?
You are probably wondering why I have doubt when everything is on target.
The problem is that the longer term indicators have turned bullish too (The M60 chart above is looking quite bullish with its price above the Kumo and a Tenkan-sen/Kijun-sen cross).
Is this the beginning of wave 5 of C of the Alternate count with an expected target of 943 to 980? If so, this would be unfortunate for those who so patiently waited for the preferred count finish wave B.
Please refer back to yesterdays charts for the prefered and alternate counts.
The choices are, wait and see what develops from this point forward, or go short, and place a nearby stop.
Remember, we can't eliminate the Alternate count until 5 of C has been completed, or we dip below 876 (the peak of wave 1). Waiting until 876 has been violated is a safer trade, but it gives up the advantage of shorting from the top, A 34 point difference may be worth that risk, but where to put the stop is the next big question. 910 to 912 is a 68% retrace depending on whether Thursday or Friday is considered the bottom of Wave A. I'd lean toward Thursday's low, but a flat correction could take us to 935-943.
The EUR/UDS M60 chart is looking bullish as well. The two markets move together, so I'll be keeping an eye on this too as this will help us know where the market is going tomorrow.
Analysis presented on this blog has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts.
Posted by Robert Campbell at 13:34