Market Update - 10/7/2010

We made new highs once again today, however we remained below 1164. Yesterday I said that there was a possibility for us to challenge it, and we did right off the open today and quickly reversed down. So far resistance has been held. The down move was impressive, but it's hard to count 5 waves down. Until we can get a decent looking impulse down, the trend is up.

We hit the upper trendline again, but did not break it. 1170 could be next if we try to touch it again.

But remember, 1173 is the line in the sand for me. If we break much higher than that, it could be trouble for the bears. Also, we need to break below 1150 to get some sort of confidence in a possible change of trend.

We also put in a perfect topping candle on the Euro today. It will be tough for the Euro to break to new highs I feel.

Watch for it to possibly reverse down pretty hard, taking the markets with it eventually.