Saturday, November 21, 2009

1100 / 1086 are key levels next week

Friday's option expiration got us choppy action, but it wasn't until late in the day that any of the buyers got a hold of the direction. There are a few different counts, but my two favored counts call for a test of 1100 on Monday.

My favorite of course is the more bearish count. If, 1100 holds, then that would be the most bearish scenario calling for a wave 3 to unfold for the next several weeks. Confirmation for this scenario wouldn't come until a confirmed break of 1080, but I think it would be highly likely that this move would correspond to a USD breakout.

The other scenario calls for either a direct move to new highs over the coming weeks with a wave 3 up coming on Monday. The other option would be to put another lower low in around 1080 that holds, and then kicks off weeks of bullish action likely through most of December.

Next week is a holiday week, so look for lower volume coming in especially on Wednesday.
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