Tuesday, June 8, 2010
Probing For A Bottom
The Euro is trying to put in a bottom and the VIX is rolling over from a lower high. Both of these together point to some potentially imminent reversals. I didn't have time to show a chart tonight, but there are positive momentum divergences developing in the Euro/Dollar that could lead to an explosive up move in US stocks. This is not the consensus view and it may only be a B wave. Shorts beware! You could get a surprise. While the drumbeat for lower markets continues ad nauseum online and on TV, the case for a renewal of the uptrend is building. However, it may take another week before it manifests outright. I am seeing nice bases in a few leading stocks and lack of downside follow-through at a critical juncture in the wave count that typically means the bears have jumped the gun. Reversals in gold, silver and other commodities should follow as well.
Posted by R. Craig Pritchard at 5:27 PM