Stocks Toppish; Euro to Decline Further

The S&P managed a new high to eliminate the head and shoulders pattern I showed in last post.  But it immediately declined afterward.  What's more important is that the Nasdaq Composite did not confirm the S&P and Dow's new highs and they all have now turned down.  The Nasdaq has been the leader of the overall market the past few months, so when you factor in that the Nasdaq is showing weakness now, the odds are good that at least a short term top is in place.  I recommend being conservative and flexible and managing risk appropriately on any short positions.  I'm not calling a P2 top or anything right now.  The focus is on the short term, and the short term suggests further weakness ahead.  I'll assess the longer term picture once the short term plays out a bit more.

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Unlike stocks, the euro did follow my head and shoulders topping pattern I laid out in last post and has been on an assault to the downside since.  The daily chart shows that the 1.3000 level is a good support level for the moment, and it currently sits near that level at the time of writing.  Judging by the pattern I see before me, 1.3000 will be taken out farely soon.  There may be a relief pop to the upside to alleviate some of the oversold condition it has on the intraday charts.  But that pop should be short lived and the downside movement should resume to well below 1.3000.  I'm firmly bearish the euro, and bullish the US dollar.

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PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.