The "possible" FP on the IWM yesterday didn't hold the market one bit as we kinda had a mini-flash crash. Why? I don't know? But too many traders long and no buyers left is likely the reason. We've seen many different charts lately that point out how the market is overcrowded with bulls right now. I posted this chart previously but I'll re-post it here again in case you missed it.

A near-record stretch of calm has ignited options traders’ desire to buy speculative call options.

Over the past 6 weeks, they’ve bought (to open) 70 million more contracts than they’ve sold (to close).

We’ve never seen this level of speculation before. Not even close. pic.twitter.com/VtRCRXRTbS

— SentimenTrader (@sentimentrader) February 15, 2020

There's also the yield curve fears out that as well to worry about that just happened again. Now we all know the government will do everything possible to prevent a recession from starting this year, as it's an election year. So at best the bears will just get a nice correction at some point of 10% or more, but a higher high is likely before the year ends.

Possibly the 10%+ correction is some kind of wave 4 down of a large degree and a final wave 5 up to new all time high into the election and/or the end of the year will be the plan... which leaves 2021 as a big decision year.  A recession is possible but that's too far out in the future to forecast. This chart here is something to pay attention too but again, I don't think it will start this year.  The government will try to stop it, but I have no way of knowing if they will succeed or not.

Stock market speculators remain euphoric as the yield curve re-inverts (the same thing happened before the 2001 & 2008 bear markets!): https://t.co/uBQR4jpUNM by @NorthmanTrader $SPY $QQQ pic.twitter.com/xQpsEUHevQ

— Jesse Colombo (@TheBubbleBubble) February 19, 2020

There's no negative divergence yet on the bigger time frames, like the weekly and monthly, so a "higher high" needs to happen before a recession can start. That means the market will go higher after a correction of 10%+ while the advance/decline ratio makes a lower high. We aren't there yet, so for now let's just play this day by day and try to catch the next big drop and/or rally.

For today we see the futures down some from the bounce close yesterday. I'm more focused on the DOW versus the SPX as that 29,000 "even level" number is very important for the bulls to hold. If they loss it 28,000 could come pretty fast, which of course puts the SPX well under 3300, it's basically like going to the January 31st low again. That's 28,169.53 on the DOW and 3212.75 on the ES Futures.

I'm 50/50 here on whether we hold 29,000 and bounce or if we dance above and below it a little for several days before dropping hard. If we do a little dance around the level then next Tuesday I think would be the last day the bulls could hold it. Meaning that Wednesday would likely be the start of another leg down in the market.

The bulls need to recapture and make support that 3390 area where it rolled over and started that big drop yesterday. It's about 29,400 on the DOW. If they can retake that zone then the risk of another big drop will be greatly lowered. Otherwise they will just be chopping around making a bear flag for several days until they get overbought enough again on the short term, which I think will be by the close next Tuesday. That's 3 days for the bulls to get going again. Have a great weekend and may God bless you.

On another note. If you ever think your life sucks because you can't seem to win at trading and you've lost more times then you can remember (been there... done that), you should hear this womans story as then you'll be super grateful for what you still have.

New ATH on the ES Futures now but the DOW is still under its all time high, so a divergence between them is now in play. Bulls will want to change that as soon as possible as if it holds for a week or two it will become harder and harder to breakout higher again. It implies that we could be setting up for a nice correction soon. Not this week, but it could possibly start next week.

Again though, be aware that the first decent drop the bulls will be all over it "buying the dip", so I wouldn't get too bearish. If you catch the first drop you'll want to take profits fast I think as we do not know if the move back up will make another new ATH and break the divergence between the DOW and ES/SPX right now, or a lower high.

We have upside targets from Oscar Carboni's OMNI system of 3480 at least, then 3674, and possibly 4035 at the maximum. However, those are for this year and could show up at the end of the year (commonly they do), and not anytime soon. I don't see any crash this year but it could be full of wild swings up and down going into the fall season before the election. Just because of the election that along should increase volatility.

For today there's still that "possible" FP on the QQQ from yesterday morning around 8am of 234.73 that might be the low for today. I say might as that level is around the closing area from Tuesday, so most likely it's just a late fill and not a real FP, but again, I've still noticed lately that those "possible" FP's seem to get hit within a few days. Let's not rule it out is all I'm saying. That's all I have for now. Have a blessed and remember that God loves all us gamblers. LOL.

P.S.  Nice chart by Atilla.  It certainly tells me that this bull market is in serious danger of a deep correction, recession or worst... depression.  I'll go with Oscar Carboni's upside targets though as they've be right almost every year for the past 12 years he's do it.  But Atilla's chart could signal that this year will be a wild one.

Beginning of the end has begun. Give it a few more weeks, my guess is mid to late March. pic.twitter.com/Nos5XLbsqb

— xTrends (@xtrends) February 20, 2020

Decent move down yesterday for day traders, but then back up late in the day and into this morning. The typical chop in a range*bound market that I am thinking will continue all of this week. If it was an A wave down (meaning the top is that 3392.50 "over the weekend" high) then we are in a B wave up this morning. But I do not think we are going to drop hard in some massive C wave today. More then likely we'll see a series of ABC moves that end sometime next week. It will be at that point the market will decide on whether it starts another leg higher, or that big move down everyone wants to happen.

I don't know the answer here but I'm sure SkyNet does. It should be based on how many traders are positioned long and short, as if too many are long then we know it's not going up much higher. And the same thing can be said on the short side, as if there are too many people short then the downside will be limited as well. I saw this tweet from @SentimentTrader that suggests there are too many traders long right now.

A near-record stretch of calm has ignited options traders’ desire to buy speculative call options.

Over the past 6 weeks, they’ve bought (to open) 70 million more contracts than they’ve sold (to close).

We’ve never seen this level of speculation before. Not even close. pic.twitter.com/VtRCRXRTbS

— SentimenTrader (@sentimentrader) February 15, 2020

I don't know how many markets it covers or how accurate it is, but if correct then the upside is very limited as 3400 will be a huge resistance area until enough traders get bearish I think.

Anyway, for today I don't have much of an opinion. It looks like it might hold this area the first half of the day and pullback small the second half. There's a "possible" FP on QQQ after-hours but it's probably just a late fill as it's right at the level where the market closed at yesterday. So again, my thinking is that the market continues to do its best to move higher early in the day and down to about flat to hit that FP by the close today. Maybe it's starts the small C wave down, or is just part of the small B wave up still and its subdividing... don't know? Just a guess. Either way I don't see anything but chop this week. Have a great day.

I hope everyone enjoyed the long weekend. The markets didn't do much, just a slow grind higher to make another new ATH of 3392.50 on the futures, and have backed off this morning 20+ points. There's nothing on the near term horizon for a sell signal, as far as I can see at least. Choppy consolation in a range-bound area seems more likely this week then any big drop, or any breakout much higher. Getting through the even number level of 3400 should be tougher then most think.

Will it happen? Sure, but there should be some drops deep enough to shake out the longs first before that level is broken. Overall though the market is still in a bullish trend and should go higher. It's just that when everyone else see's the same thing the bull bus gets too full and that will stall out the engine and force consolidation at the minimum, and a nice correction at the maximum. When is anyone's guess but this week doesn't look like for anything but chop. Not much else to say so I'll end it and say May God Bless you in everything you do in life.

The futures were up more last night but are almost flat thins morning. They are in a nice rising wedge and near the apex of it, so a breakdown seems more likely then a break to the upside. Of course it doesn't mean it will be some large breakdown as it could easily just turn the rising wedge into a rising channel by finding some support a little lower and turning back up again. It's Valentines Day so I expect light volume as traders leave early for the 3 day weekend (remember that Monday is Presidents Day).

A lot of "turns" happen around a holiday as the powers that be seem to love putting out some fake news when the market is close to trap traders long or short with a gap move the next day the market opens. So it wouldn't shock me if so news was released this weekend to cause a gap open next Tuesday. Could it be a gap up? Sure it could, but odds favor a gap down.

At this height everyone is looking for the even number levels of 3400 on the SPX and 30,000 on the DOW to be hit. And you know the old saying... when everyone is looking for the same thing it never happens. A gap up and over those levels next Tuesday would trap the shorts and force another squeeze higher. But how many shorts are left now? From what I see there's a lot more traders long right now then short. That changes day to day of course but it currently suggests a move down is coming, not a move up.

Nothing else to say really. Again, I don't see much for today. Probably a sideways to slightly up day to stay inside the apex of the rising wedge. Have a great long weekend and be on the look out for a surprise news event to move the market next week. Doesn't have to happen on Tuesday from some event over the weekend, but any day next week a surprise gap one morning seems likely. An early Happy Birthday to George Washington.

Many upside targets were hit yesterday, so we might have reached a top where a pullback can start. The move down in the futures right now could be an A wave of some degree with a B wave back up for a double top, lower higher or slightly higher high coming next. I'm not really excited about this move down as you know the "buy the dippers" will rally it back up.

I'd be surprised if the gap doesn't get filled and instead we keep going lower. Possible? Sure. Likely? No. Not from a new all time high. Usually there's some small ups and downs for awhile as "buy the dippers" and the bears fight for control. Then if the bears win they take it down, but after a series of small moves down, up, down, up, etc... The exception is when some fake news is released to cause a panic drop.

They did that with the corona virus last month, so unless do something similar to cause another panic drop to start I'll just expect this pullback to follow standard moves, based on past history. I'd love to see it just fall off a cliff all day long today and tomorrow, but again, odds aren't likely for that to happen.

The SPY had a FP on it afterhours yesterday and the futures fell to hit it, pierce though it a little, and look to open right around it. IWM has a new premarket FP that is an upside one, which is right around the closing level from yesterday. If it plays out then the market will rally today to fill the gap and that FP on IWM will be hit. So far the futures have dropped from 3382 to 3348, which is 34 points. If that's the A wave then the C wave down would be about 55 points at your typical 1.618% multiple.

If we bounce up for the B today and reach say 3380 then the C down would take us to 3325, which is around the area the market was at this Monday. That would be called a typical move. Whether or not we get a "typical" move or not is anyone's guess? One scary news story (fake or real, but perfectly timed) released could throw all that "typical" stuff out the window. This coming weekend will be a 3 day one as the market is closed next Monday.

If I were a banksters and wanted to steal the most money from the sheep I'd keep this market up into Friday, release some fake news over the weekend to cause a panic while everyone is trapped long. Then gap it down on Tuesday so no one can get out. We've seen this happen many times in the past, so don't be shocked if it doesn't happen again. The holiday is "Presidents Day", so it's a perfect ritual day for those in control to mock Trump with his strong bull market since he got elected. From that point of view Monday would be a nice day for a surprise drop. Have a blessed day and remember that having God in your life is more important then this market.

No big surprise this morning as the futures are up (again) after the SPX and DOW made new ATH yesterday. There can't be many bears left but the few that are will probably start panicking this morning. Without the bears getting squeezed all the time this market would be a third of its present value. My guess is that 80-90% of all strong moves up are bears forced to cover and not real investors buying.

Tops are made when the retail public final buys, and we aren't there yet of course. You'll know we are close when there's zero negative news and nothing but positive news on the main stream propaganda machine. So while a pullback is very overdue higher prices seems to be the plan here instead. And with new ATH's being hit yesterday there's little resistance overhead.

You could obviously get some at large even numbers, like 3400 on the SPX and 30,000 on the DOW, but not much else stands out that I see as an important level. So, the bears have very little time left to start a move down if that's the plan? Too many more days like the past few and shorts are going to get forced to cover, which causes a squeeze much higher. You can call it crooked if you like, as yes we should have dropped hard but the liquidity injection from China a week ago (when the rally started) and the REPO money still going on from the Fed is all that kept the market from tanking.

You are right, but what can you do about it? Nothing is the answer. You can't fight the Fed, so you must join them and always go long or suffer the fate of all the bears. I know it's not good news but that's the way it is unfortunately. Will there be a pullback? Sure, but probably from higher prices and after the last bear is toast. Remember that without the bears to squeeze the market will not go up.

So scary news must be created to panic traders into selling and/or shorting the market. They let it drop a little to make everyone think we are going to crash. Then they start the squeeze back up. This world it not logical, not sane, and not anything but a big lie. Stocks do NOT go up on great earnings, technical s and fundamentals. They go up on squeezes and Telsa is a perfect example.

Everyone with half a brain knows the company is a joke and battery run cars is a technology that's almost a 100 years old. Nothing new there, and going to space... give me a break! People see it's all garbage so they short it, and that's fuel to squeeze it higher. So they short it again, and again.... and again. But the more they short it the more bears get squeezed higher. Once all the shorts are toast and bulls come in to start buying it is when the top is in on it. The SPX and DOW are the same way.

The more the technicals say it's overbought and should correct back some the higher it goes. Anyway, no point going on about it as you can't change it. This morning I don't see anything but the bulls doing what they do best... frustrate the bears. Time is ticking for the bears here as next week is a bullish period so lets see if the bears and keep yesterdays high intact or not. If so then a lower high today would make the move down from the higher yesterday and A wave and this premarket move back up a B wave, which leaves a C down for Thursday or Friday. Just don't get your hopes up if you are a bear as I doubt if you get much action if it actually does play out like this. Have a great day and may God bless all the bears still alive out there.

Yesterday started out with a move down but it got reversed right at the open and went up from there. It traded sideways midday and then ripped up to a new ATH by the close on the SPX but the ES just made a lower high. Volume was low as basically only a few of the top stocks moved the market up yesterday. Overall the market looks more bullish then bearish right now. It's not not looking good for any big drop this week.

Yeah, I was looking for a big drop to start late this week and while I can't 100% rule it out I'll just say that the odds really dropped with yesterdays rally and new all time high on the SPX. The DOW still hasn't make a new ATH but it bounced right at the open with just a tiny pierce of the all important 29,000 level. If it was to lose that level on a closing basis I'd get bearish but bull markets climb a wall of worry and of course we have plenty of worrisome news still out there.

Since the volume was light yesterday it suggests higher prices are still yet to come, which isn't a good sign for the bears of course. You would prefer to see some heavy volume to signal "capitulation" of the shorts getting squeezed out. That didn't happen. And there seems to be too much bearish talk still out there everywhere, which is never good for a nice move down happening. In fact Charlie McElligott of Normura explains in a video interview he did on CNBC that the dealers are heavy short right now looking for a big drop, and that if it doesn't happen they will have to cover, which means a short squeeze is coming.

Positive Feedback Loop in Play:

1. Hedge into weekend, unwind and shoot higher.
2. Run into OPEX.
3, Volatility "will absolutely disrupt the market" as election risk hedging unwinds following Super Tuesday.$SPX#McElligothttps://t.co/SHa28eYf2U

— Samantha LaDuc (@SamanthaLaDuc) February 10, 2020

There is some overhead resistance around the 3382 area but again, how much pain can the shorts take before they get forced to cover? I just can't answer that question. I can only say that time is ticking for the bears as after this week ends next week we have the "usually" bullish week of the monthly options expiration.

Charlie mentions that the next 2 weeks are the period where dealers will have to cover if they are wrong, and the history of every 3rd Friday is heavily in favor of the bulls. Before the weeklies' and Monday/Wednesday options came along the old saying by the floor traders was to "buy the 2nd Thurs/Fri low of each month" as they knew the pattern for the market makers to sell puts prior to that, and then push the market back up into the monthly options expiration Friday, was a guaranteed winner.

Today it's not as perfect a pattern, but still a common practice, and with all these dealers shorts in fears of the virus spreading there's better odds then normal that a squeeze is going rally next week up strongly. As for today, it's likely going to continue to grind up until it hits the resistance area I mentioned previously. From there we'll just watch the volume to see if the dealers start to cover or not? Trade well and may God bless you in this tough market.

P.S.  Oscar Carboni finally put out his upside projections for the year and they are much, much higher.  Doesn't mean we won't have some kind of correction of course, but over all the trend in a lot higher.

Looks like a mostly flat open here this Monday morning with the futures down small. This is the week for the bears to take it down if they can, but failure here could lead to a lot more upside and pain for them. I don't have much thoughts on the direction for today as it's looking like it could go either way right now. The daily charts are very overbought and trying to rollover but the shorter term charts (like the 1, 2 and 4 hour) look oversold and could turn back anytime today.

If the bears do take it down more though and close it red I'd lean toward a move back up tomorrow and a green close. Basically, it would look like a wave A down from the high last week and a wave B up on the rally. From there the determining factor would be whether the bulls can make another higher high or if the bears keep them with a lower high. If the bears win it then a nasty C wave down could follow later in the week. How low it goes is anyone's guess at this point, so we'll just take it day by day. Lets just see what today brings us as far as a move down (or up). That's all for now. Have a blessed day.

The SPX and DOW both made new all time highs yesterday and are backing off a little this morning. There's still a chance they go a little higher but a double top like this provides resistance on the first attempt, so we'll have to just wait and see I guess. If you are already short then you are happy we are pulling back and want it to continue. If not, then possibly you get another chance when (if) the market continues up again.

The pattern is a bull flag so odds are in favor of another squeeze up soon. Whether it fails or starts today or Monday is unknown of course. It could go either way at this point, as we could be 95% done with the move up or 100%, but we are close never the less. Picking a top is very hard as when too many traders see it and short it SkyNet just uses those shorts as more fuel so squeeze it up even higher.

Most of the time it tops out when all the bears give up and there's no one left shorting. It's also at the same time that all the bulls are fully long it seems. Upside targets are in the 3370-3400 SPX range from most everyone else I read. I can't disagree with those projections either, but will again point out that when everyone is looking for the same zone it might not get hit? Too many times I've watched the market go up or down to fill a gap where traders are ready to take a position and SkyNet will fail to fill it by a hair and reverse the other way with traders frustrated that they didn't get filled on their buy or sell orders.

Now they have to chase it, which is exactly what SkyNet wants them to do. The machine (SkyNet) is always out to kill you (steal your money to make you go broke), and never there to help you win. Keep that in mind the next time you see a gap area that you think will get filled and reverse as many times it will fall shy or overshot through it.

It's kinda like big even level numbers, such as 3300 or 3400 on the SPX, or 29,000 and 30,000 on the DOW. On first attempts everyone see's the big even level and put trade orders in at the level, so SkyNet will fall short of hitting or pierce through it to fake them out. Therefore we shouldn't expect 3400 on the upside to be hit on the first rally attempt. Odds are that it will fall short of it because so many traders are waiting there to short it.

And let's not forget that many bulls got long after 3300 was recaptured and a new all time high hit yesterday. They are looking for that move up to 3400 and smart ones will start selling early in the 3370's, 3380's etc... area. This again is why the market will many times fall shy of hitting the even number level. Bears got squeezed out yesterday and some new ones shorted of course, but the question is... are there now enough bears left to squeeze it up closer to 3400?

I don't know the answer there of course, which is why it's hard to pick a top. I'll just add that by the close on Monday or Tuesday I think the top will be in and we'll start going down from there. May God bless all us fools as we need lots of help in not only trying to trade successfully, but all the other decisions we make in life in general. Have a great weekend.

Futures are up again this morning some but not as much as yesterday. Higher targets are possible, like up to just under 3400, but I'm not positive that they will be reached. Today the bulls will need to make sure they hold up all day, even if they have to pullback small to consolidate. They are in a nice rising channel and could pullback to the lower trendline of it and still remain bullishly aligned.

But that's down in the 3325-3330 area (depending on when and where you hit it?) and they might not want to do that in fear of losing momentum. Plus there's a smaller rising channel they are in as well, (not shown) which the lower trendline is basically around where the market is right now, and that's at the green 20 period moving average. I'm unsure at this point on what to expect.

I do think we are close to a top but whether it was put in yesterday at the close (and in the futures last night, I just don't know. But today would certainly be the best day to keep it going up to those higher target as they have the impeachment trial over-with now and that euphoria could be used as fuel for the bulls to reach up higher.

A move back down too much is risking the top being put in already. So, today is a critical one for bulls and bears I believe. From a wave counting point of view it's hard to tell if the wave 3 up ended yesterday at the open, with the small pullback being the wave 4 down, and the rally up into last nights new ATH being the wave 5... or we are still in the wave 3 up and "possibly" starting the wave 4 down right now.

With upside target close to 3400 that might be the case, but they could fail to be hit as well, just too hard to tell at this point. My best guess is that if the bulls "hold the zone" all day today and don't pullback more then 10-15 points (just an estimate) then they could reset the overbought short term charts enough to rally it up one more time tomorrow to reach those higher targets. That's all I have for now. Have a blessed day.

Ok gang, it certainly looked like and felt like a wave 3 up of some degree yesterday. It's continuing this morning as we can see in the futures, and I suspect it end by the close today. Tomorrow we should see a move down and then back up on Friday for either a slightly higher high, or lower high... not sure? But today or Friday looks to be the last chance for a good shorting entry to ride this puppy down next week and even some of the week afterwards.

On another note I'm having issues with my website as the menu bar is gone and I can't seem to re-create it regardless of how many times I try to do so. So for now I just put the most important link on the homepage, which is the chatroom. I'll continue to work on trying to get the menu back again in the coming days, but for now just use the big green button to get into the chatroom.

Ok, so the market isn't going exactly like I thought but close enough. Clearly we finished an ABC move down over the past two week, which is some kind of large A wave. Currently we seem to be in the large B wave up, which can go slightly higher is some cases. I don't know if it will or not but like I said, today or Friday will probably be the last chances to short it before the large C down starts into next week.

And what about Telsa you ask? It's been on fire for sure but I don't normally cover stocks. However, I will say this about it, it appears to be in a wave 4 down after ending the wave 3 up yesterday at the 968.99 ATH, so one more move up for a slightly higher high, or lower high to complete the wave 5 seems likely. I wouldn't play it of course as it's a wild rodeo show that I'm not interesting in gambling on. Forecasting the movement of the SPX is hard enough.

Anyway, that's all I have for today. I am ever happy to be alive and in good overall health with just small body aches and pains. It could always be a whole lot worst. Thanks God for keeping me healthy.

Yesterday I said in the chatroom I thought we'd go up in 5 or 7 waves, and we had the wave 1 up at the open and wave 2 down the rest of the day. This morning we see the futures up nicely in what is likely the wave 3 up. It could be all one wave or subdivide, but right now it looks like one strong wave. However, it's hitting resistance now from a falling trendline of a channel, as well as hitting the gap fill area from Friday.

So there could be some kind of small pullback here if it can't push through it on the first attempt, but I wouldn't short it as it should be small and it will likely push though it at some point anyway. Common patterns are for a wave 3 up to push though the resistance and then drop back afterwards to make the former resistance support now. That might happen today as well. If so, then that pullback should be a wave 4 down with a wave 5 up into the close on Wednesday now looking possible.

I was really thinking we'd rally after the impeachment vote but the opposite seems to be happening instead. Front running the vote smells of a dump in the market afterwards, which tells me we could top out tomorrow by the close and then drop on Thursday. Maybe the vote doesn't go as expected, or some other piece of news is released to spook the market... I don't know? I'll just keep it one day at a time and right now the market is up nicely and should continue into Wednesday from the looks of things.

It's not exactly like I thought, as far as time, but the pattern is what I thought. Another possibility is that this wave 3 up doesn't stop unti it hits a double top area tomorrow, which then suggests a wave 4 down on Thursday, and wave 5 back up into Friday. So keep that in mind as well, but I'm leaning toward it all being finished by the close on Wednesday. May your guardian angel always guide you in your life.

Well, so much for the large B wave up lasting into this week as Fridays drop was clearly a C wave of some degree. Since it's about the length of the large A down it might be complete or will finish up today or Tuesday. The impeachment trial is supposed to be over with this Wednesday, which might be a turn day in the market. The market is certainly close to a big squeeze but I'm not sure if there's more downside coming first or the low is in right now? Tough call?

And China is putting in $174 Billion into the market to keep it from crashing this week from the virus. Call it QE or REPO or whatever, the point is they don't want the market collapsing upon it's open this morning.  We can see the futures up some, but that's to be expected after such a large drop on Friday.  However, this injection of money from not only China, but the FED here too in America, and the ECB, it's going to be hard to be a bear this week.

I'm not saying for certain that the market is going to keep going north and that the correction is over with as I just don't know.  But this week should be off to a bullish start and should continue until everyone turns bullish and gives up shorting the bounce.  We do now have a clean ABC pattern down, and there's nothing saying for sure that we must have another larger ABC down after a bounce to say a top double or something?  I'm just going to focus on today and this week and it looks bullish.  When next week comes around we'll see if another big drop is still in play or not.

I don't have anything else to add so I'll end it here.  Have a bless day and always remember that God always there when we need him.  We just have to ask for his guidance.  I don't think he'll tell you where the stock market is going next, but who knows... he might?  If he does please share with other.  🙂

Well the bulls held the double bottom area yesterday and rammed up hard in the close. I was certainly getting nervous that there would be a breakdown but that's how SkyNet works, it gets you thinking one thing really strongly just before it does the opposite. So the rally up squeezed out of bunch of bears, and lured in some bulls. And this morning we see the futures down some as SkyNet doesn't want the bulls to make money either I guess.

Overall though it's looking like the plan is still in play where the large B wave up is just subdividing into many smaller waves to frustrate both bulls and bears alike. I think we are in the tiny wave 2 down of small C up of large B up right now. That rally yesterday into the close looks like the tiny wave 1 up, but again, I'm not an Elliottwave expert. And I don't think it works very well in forecasting the future anymore. It did back in the day before computers I guess, but not now that the sheep have access to it. But it fits into my line of thinking that we have another slightly higher high coming soon and then a big drop in mid-February.

So I try to make it fit the best I can. And since I suspect this is going to drag out until a new ATH is hit I'm think there will be many subdivisions in the EW count for this large B up. We all know that C waves subdivide into 5 smaller waves, but the wave 3 can also divide... so lets not focus too much on the wave count but the time factor and the ATH coming, and then hopefully the wave count fits afterwards. Therefore once this tiny wave 2 down of small C up of large B up finishes I'd expect a tiny 3 up to start... probably Monday. If it subdivides as well then all it will do is push out the top until late in the week or even early the following week. I don't really think that will happen but anything is possible. My guess is that we top out late this coming week. Anyway, that's all I have for now. Have a blessed weekend.

The bulls are risking losing the large B wave up scenario here this morning. If the market drops below the prior low this Monday it would kill that wave count as a drop to 3200 or lower could happen. Right now I'm counting the ABC down from the high last Wednesday to the low this Monday as a large A, which means we are in the large B up currently. If it ended at the highs yesterday then we are in the large C down now.

My thoughts were that the large B up would subdivide into smaller waves and top out early next week with a double top but right now that's not looking very promising. However, it's still possible if the bulls don't lose this double bottom area from the the low on Monday. I see a "possible" FP on the QQQ this morning, which looks more like a late fill from the close yesterday. But it's still worth mentioning anyway.

So, if this main scenario holds of a large B up into early next week, which would currently have the small A up of large B up finished yesterday, and the small B down of large B up currently in play, then a small C up of large B up should start today... and probably subdivide into 5 smaller waves as well. This is still what I see happening, but if we drop in a large C to 3200 or lower then that's out the door of course and I'll then have to adjust from there.

For now we wait to see I guess as if my scenario plays out a small C up of large B up should start either today sometime or early tomorrow at the latest. Today is actually the best odds, as going sideways all day would make a bear flag and suggest a drop tomorrow to kill my wave count and head for 3200 or lower. That's all I have for today. Good luck to bears and bulls alike.

Futures are up some this morning as the ABC move down certainly looks finished at this point. So, if the entire move down was again, some large A with 3 small waves inside it, then we are in the large B up now. I suspect it will make a new all time high again before finishing. Timeline for this move is probably next Monday or Tuesday as you know the Fed's are going to hold the market up the rest of this week like they always do during FOMC meeting weeks. Today though we should complete the smaller A up part of this larger B up.

If we drift back down more then about 10 points in front of the meeting I'd say that small A up ended, but since I suspect they will close today out positive I'm leaning toward the small A up ending at the close today. Either way a small B down should follow no later then tomorrow. And if I were SkyNet I'd keep it small to make sure the bears can't get out of their trapped shorts... especially if we hit 3300 today as you know the bears will short it.

After that small B down finishes I'd look for the small C up to take us into the close next Monday for that new all time high, or into the open Tuesday. That should finish the large B up and have every bull long with bears back to sleep again thinking they missed the move. And that's when I think the big drop will start and take us into mid-February with a nasty 200-300 point drop. Of course this is all just a "best guess" on what I think might happen based on what I currently see. Will it play out like that? Who knows? If so I'm going to ride it down. May God watch out over all of us sinners and bless us even when we don't deserve it. Amen.

The futures took a nose dive Sunday night in what I'm thinking is a small C wave down (yeah, I know... it doesn't look small.  But that's the label I'm giving it) with the A down starting at the high last Wednesday, ending on Thursday where the small B up took us into the open on Friday. There's where the fun begun for the small C wave down. If it turns out to be a 5 wave move inside that C down then it should bottom soon and complete the first ABC move down.

The question is... is this ABC down some kind of wave 4 with a wave 5 up yet to come, which would make a higher high, or is it just a large A wave down with a large B up for a lower high? Either one suggests a move up into the FOMC meeting this Wednesday once this small C down finishes, which should be today. I know I've talked about the ritual number high of 3337.77 on the SPX from last Wednesday but there's no guarantee that it will be "the high", so don't panic if they pierce through it a little to run some stops before a larger drop starts (even-through it looks miles away right now).

We all know the Fed's don't like to be blamed for any drop in the market so I'd truly be shocked if they don't run the market back up into the meeting this week. However, there's an equal chance that they drop it to around 3200 and then run it back up into early February for that higher high but if so I'd think they would get too many bears short and the move up would last longer and go higher then just a pierce of the current high.

Doing a drop to that level would likely end up being some wave 4 down and a wave 5 up into the middle or late February would follow. This would screw up all the bears looking for a big drop in February as it wouldn't likely happen as hitting around 3200 is deep enough of a pullback to allow another month long rally to follow. Yeah, it would suck big time for everyone expecting a bigger drop.

Will it play out like that? I don't know? There's some big bets placed on the VIX right now for the February options but who's to say when they will exit them? A drop to 3200 on the SPX would make a lot of money for them and maybe that's all they were expecting? Bottom line here is that I'm going to remain open minded for that to happen, but I'm rooting for (and give higher odds for) a rally back up into the Fed meeting this Wednesday, with a triple top or even a pierce through higher to shake out some early bears possible before the move ends.

That may take all week but still something to look out for. Give me that and I'd still believe a much deeper drop in February is the plan. So if you want the big drop to say 3000 or so, then that's what needs to happen... a fast end to this small C wave down today and rally to mid-week.  But again... too deep here on this first drop and it would likely end and the bears would miss it again.  It's very frustrating for sure as I did not expect this big of a drop in front of the FOMC.

The futures are up close to the recent all time high but haven't went through it yet. Are the bears teasing the bulls for once by allowing them to get so close? Or are the bulls teasing the bears by holding back from busting higher? Unfortunately I don't know the answer. But the current high isn't that important to me right now but instead I'm just waiting to see what happens next week with earnings and the FOMC meeting. There certainly could be another spike higher to punish any early bears going short this week, but of course I'm hoping the current all time high holds as it's a nice ritual number to mark it with.

But for now I'm standing pat and waiting until next week as it should be the "key week" where the decision is made to tank it hard or squeeze it again. Not much else to say today as it's the last day of the week and I really don't expect too much action as traders are very likely waiting the FOMC to see what the Fed's say going forward. So have a great weekend and remember that God is real, make him your savior as if you don't the devil will be happy to take you. 🙂