Watch the S&P 500 closing price. A close below the key 14-day MA at 1176 could potentially signal a medium-term trend shift. In the above chart, I have highlighted the size and proportions of the previous wave II correction made in August . The 61.8% proportion above 1140 should be watched, especially since the EUR/USD initially paused at this level last week (the euro tends to be a leading indicator). Alternation signals the formation of a complex correction that could get choppy in the next few days depending on the extent of the dollar's corrective strength. A normal correction would target the 1136/1157 region, where bulls are likely to reemerge.
STRATEGY UPDATE: LONG EUR/USD position took 1/2 off for 55 pip profit, stop-loss remains at 1.3725 for remainder of the position.
