Thursday, July 26, 2012

Euro-Hope to the rescue!

So close to perfect timing, but not quite!

Yesterday I wrote that some kind of good news about Europe would spur the market for the next up wave.  I had anticipated it would happen over the weekend, but it happened in the early morning hours (in the US anyway).  Literally, in the 30 minutes it took me to get ready for work the market futures swung from -30 to +145 on words from Mario Draghi that he would do whatever is necessary to save the Euro.  That headline was all we needed to be off to the races.  The RumWave had been predicting the pop and continues to show the path of least resistance to be "up" for the next 10-20 days.  That doesn't mean it will be a straight line; we will have a couple pauses and pullbacks along the way but I think my long positions will be better off in mid-august than they are today.  The RumWave and UltraWave will both reflect a 3x DJIA Bullish ETF for this wave.



If you didn't get in today, I think you still can tomorrow based on the 4hr and Daily scores above.  They took on a slight orange tinge today, but nowhere near red and the internals that go into calculating the scores are not showing any pink or red numbers as a result of today's tremendous climb.



 The 4 hour chart shows room to climb still on all of the oscillators below the candlesticks.  The RSI rocketed into overbought territory, so a relatively flat (or even slightly down) day tomorrow would not be beyond the realm of reason.  If that is the case it will be a good buying opportunity.


The daily chart also shows room to climb across the board.  I think this will be the end of the summer swoon and we will climb the rest of the year... right up to the fiscal cliff!  The Dow has some catching up to do if we are to make our statistical annual average percentage gain.  I tend to believe that the big money will start pushing pretty hard the rest of the year to make that happen.

Best of luck to your trading!


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