It looks like the Euro breakout has begun

Remember the triangle we were tracking all day today with accumulation in FXE/Euro?

Well take a look now...

The trenlines are pretty rough, I know, but that was the triangle, it has broken out to the upside. It briefly stumbled today at the red box when Paris based Fitch downgraded 8 major banks including: BOFA, Barclay's, BNP Paribas, Credit Suisse AG, Deutsche Bank, the "Squid" itself, Goldman Sachs,   and Morgan Stanley and Societe Generale both had their viability ratings downgraded. As I said earlier in the week, get ready for the flood of downgrades coming, but still the Euro looks intent on bouncing which will let the big players unwind their $1.30 longs and reposition short.

Also mentioned, even though the averages themselves didn't have very strong positive divergences (as this is a Euro move) the averages will track higher due to legacy arbitrage FX correlations and ES is showing us that tonight as it tracks higher.

Ultimately, even though I put some leveraged long ETFs in the model portfolio for a short term trade, I left all the long term shorts in place and ultimately (recall, a top is a process not an event) we should have something that looks like this as we have waves cresting and breaking, but the bigger picture is the tide going out.

The top rounding over is the tide going out, the counter trend rallies are the waves cresting (where we want to short in to strength) and the declines are the waves breaking, but with each break of the wave, the tide moves out a little further.

Although holding these longer term positions is difficult and you have to deal with draw down, they continue to move in the right direction and this week the Model portfolio has done incredible.

Weekly and monthly performance

For perspective...

 the WOWS model portfolio ranked #3 this week of 9,016 total weekly portfolios and..

#49 for the month out of 15,418 portfolios!

I also won some award, although I'm not sure exactly what it is, but it's for the WOWS options model portfolio, here's an excerpt from the email....

Congratulations!

We are happy to inform you are officially a Winner in the Wall Street Survivor™.

Please copy and paste the following link in your web browser and complete the form in order to process your reward.

Sincerely,
-The Prize Patrol-
Wall Street Survivor Stock Trading Contest
prizes@wallstreetsurvivor.com

I didn't even know about this, I'll let you know what the prize is and what it is for, maybe a coffee mug or t-shirt? :)

See you in the a.m.