European debt crisis threatens U.S. equity markets

System works against E.U. leaders in finding fix

See where I’m going with this? The correction may very well be over by the time we get to the 30’s. The issue is how long does it take to get there? I think people need Prozac because if you showed up from outer space on Thursday and then peaked at the headlines on Friday you might not recognize the place. It’s crazy. The positive here is that the bear days do show an amount of respect and fear. That’s why we are looking at this move as an intermediate level complex and grinding affair. This probably continues on until they grind the smiles off the faces on the bounce days.

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Getting back to Europe, the technical story is the EUR-USD which had excellent Fibonacci and Gann readings at the low from last Sunday night. True, it bounced the whole week but the bounce really weak and by Thursday it peaked. On Sunday night all of the good calculations were toast as we’ve set a lower low for this sequence. One has to be alarmed at the ease in which these calculations were taken out. We’ve already discussed mining stocks. A lot of the relationships that could keep the equity market afloat are falling by the wayside. The only hope is the SSE which bounced well after it came back from the holiday. But even in China the resistance level is around 2350 and it was struggling with it in Monday’s early trading. China is going to have a hard time staying up if the European indices can’t or won’t.

As you can see, we will be testing another important support level on Monday morning. If this breaks we are going back to the January low and it will take the stock market with it. If not we’ll buy time as the markets will tug of war back and forth in a bigger range. You can follow me on Twitter for between updates in our newsletter.

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About the Author
Jeff Greenblatt

Jeff Greenblatt is the author of Breakthrough Strategies For Predicting Any Market, editor of the Fibonacci Forecaster, director of Lucas Wave International, LLC. and a private trader for the past eight years.

Lucas Wave International ( provides forecasts of financial markets via the Fibonacci Forecaster and other reports. The company provides coaching/seminars to teach traders around the world about this cutting edge methodology.

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