Yesterday's price action was lot of bark and not to much bite. After opening up 3 points on SPY and 30 on ES the bulls failed to grab any momentum and they let the market drift lower before the PPT or whoever came in and pushed the market up.
Once again the market was lead by some B.S Europe bailout rumor. This sent the EUR/USD shooting up on Sunday night and everything followed through after it. But just like all the other rumor fake outs this one was short-lived. The length of these bailout rumor rallies have been getting shorter and shorter.
Below is the hourly chart of the EUR/USD, as you can see it has failed it get out of its tight range 1.3320 and 1.3284. In fact EUR/USD is forming a head and shoulders pattern-its not the cleanest H&S pattern but its there. A break below 1.32849 and the pattern is confirmed a break above 1.3320 and the EUR/USD could run higher.
The fact is the Euro situation is not fixed, nothing was done to fix it today and the move in the Eur/USD that was done when the IMF U.S Bailout was announced has been faded. It looks like we are back to following the dollar and the Euro for clues on the market. Stay tuned for the next rumor.
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