My preferred Euro count calls for the imminent conclusion to a relatively rare "triple three" (zigzag-flat-zigzag) upside correction, although my 1-2-1-2 bearish count (see http://sidscharts.blogspot.com/2011/02/eurusd-february-15-2011-30-minute_15.html) was certainly under attack by Friday's upward burst. If going short from here, the invalidation point would be very close by, and since everything you see on this chart still counts best as 5 waves down, followed by an almost complete retracement consisting of choppy and overlapping price action, an excellent risk-to-reward trade setup has presented itself. If one were so inclined, going short here, with a stop set a few pips above invalidation would be low risk and high reward. This count calls for downward movement within a few hours of the Monday morning open in Sydney. If price subsequently moves above the invalidation point, the position would be closed at a small loss of approximately 60 pips or so. On the other hand, if my count is correct, a short position from here could be held for a number of weeks, and would produce many hundreds of pips profit, with very little drawdown possible while holding the position.
If price does move above the invalidation line, I'll have to publish a more bullish count, most likely consisting of a 1-2-1-2-1-2 scenario to the upside, which is extremely bullish, and might even require a complete re-work of my long term count. The Euro appears therefore to be at a major inflection point, and is likely to either go a long way up from here, or a long way down. Getting short has a little better risk-to-reward at this juncture, (depending on how much the market gaps up or down after the weekend), and a bearish slant is supported by the corrective character of the price action up from 1.343.
One last note, for all those Elliott perfectionists out there, the third leg of the above "triple 3" can be counted as either a flat or a zigzag. Whichever it is, it really doesn't matter because there's no such thing as a "triple 4" correction. So, if my count is correct, this correction is very close to complete (if not already), and price must start moving downward pretty darned quick . .
See http://sidscharts.blogspot.com/2011/02/introductory-post.html for my long term count on the Euro.
See http://sidscharts.blogspot.com/2011/02/introductory-post.html for my long term count on the Euro.
