However, view this as only a short covering rally. With the recent credit downgrades as well as the spectre of GReek default looming once again, good news will need to continue to flow out regularly to keep this corrective rally going. Will try to take advantage of this, but the first sign of trouble means I'll be looking for that elusive short trade.
In focus today is the AUS/USD. I like the look of this technically on the daily chart. We have 2 scenarios being considered. The bullish scenario is that point D of the corrective 5 wave triangle may be set at the 1.045 area. Watching for point E to be set at the lower bound before we try to test the historic highs again.
The bearish scenario, which I have a bias towards, is that the downward sloping trend line joining the two previous tops will create a pivot point for what can be viewed as wave 2 of the C wave in an overall 5,3,5 zig zag pattern.
For either scenario, in the short term, if there is a nice candlestick confirmation, I will be trading this one to the short side. Good luck out there today traders, and welcom back for the US markets after their Monday holiday.
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