Last Friday we saw a big day up, but most of the move was into the close. Then half of it got reversed going into the weekend. Sunday night the Fed's announced another rate cut but the pop higher was short lived as the market reversed back to hit the limit where futures stayed all night long. There's an FOMC meeting this Wednesday but with them already telling us what they have planned I'm not sure what more can be said to juice the market?

However, the market is very short term oversold so possibly we see some kind of ABC bounce up into the meeting, but it's likely to be sold into. If the market was to flush down into the meeting to the 2100-2200 area instead then I'd say that's where a decent rally could start from, but odds lean more toward going up into the meeting with 2800-3000 as the likely high.

No matter what bounce happens there's too much technical damage to get very far north, and another lower low is expected.  And early this week we could see some more wild swings up and down to shake out both bulls and bears alike before another drop starts. I've been looking for a wave 4 up and this could be it... or what we saw Friday was all of it?

Naturally it will be choppy and will breakdown into smaller waves. Once done though I expect another drop (wave 5?) to that 2100-2200 area. From there I'm sure we'll have lower target.  That's all I have for today. God bless everyone as I know a lot of people will be impacted financially from this virus and stock market crash.

Yesterdays drop was huge and the put to call ratio hit a new high again. It's starting to look and feel like capitulation here, and that means a bottom is near. Probably not today with this strong rally back up as trapped bulls will sell into it, but the next trip back down should be the last one before a very strong rally back up starts. My guess is we'll that last drop on Monday.

Whether it's a higher low or lower low I'm not sure, but this move up acts like a wave 4 bounce inside a C wave down, so a wave 5 down to end the C wave and the larger degree A wave from the current all time high, could be next. Give me that last drop on Monday and then I'll be a bull. For today the 263-265 area on the SPY is resistance. Buckle up for next week as should be just as wild as the ride down as the bulls try to take it back up. So if you missed this big drop (I know I did) you'll get another shot to catch the move back up. Have a great weekend and God bless.

So much for the bounce is it's pretty clear now we aren't getting one. If you missed the drop there's no good bounces to get short at. Now we look for a bottom, which should be around 20,300 on the DOW and 2525 ES (2560 SPX) according to Oscar Carboni's OMNI system. I don't have much to add that hasn't been said in prior updates. The bounce I was rooting for from the meeting the banksters had at the White House yesterday didn't do anything to help the market. So, more downside is coming. Stay safe and remember that cash is a position.

I've not been talking about it much but we've gotten a lot of intraday FP's lately. Most of the time they are just late fills by some market maker as you can look at them to see that the print is at the exact same level as the prior days close. But weirdly they have be acting as magnets for the market to go to. The premarket downside FP yesterday was by around 11:30 am EST and then we turned back up and rallied into the close.

Then afterhours yesterday we had another downside FP, and we are likely going to open around that level. Plus, we just got yet another new FP to the upside here in the premarket session, so will the pattern repeat? If so then this down move will turn back around and head up to that new FP of 288.42 by the close today. I don't normally pay much attention to those intraday fake prints because again, most of the time they are NOT fake prints but just late fills... meaning the seldom work.

Anyway, I just thought I'd point that out for those that notice them as well. For my thoughts... I think we are carving out a short term bottom here with a series of wave 1's up and wave 2's, which setups a wave 3 up of some degree soon. The catalyst that could cause that squeeze is the banksters meeting at the White House today. Results from that meeting probably won't be released until after the close today but if they get some kind of bailout then look out for a big squeeze up on Thursday to start.

It does NOT mean the lows are "in" but it could be that large B wave up I've been looking for and called wrong too many times. Picking the bottom of the large A down certainly hasn't been easy, but I'm thinking now that it did end with the lows on Monday. This rally up has several targets. The first is the 50% Fibonacci Level of about 3060 SPX (306 SPY).

Then next would be some of the other "possible" FP's (still look like late fills to me though) above that never got hit. From 3/5 afterhours there's one at 313.08, then 2/5 has one at 322.42, but the interesting one is from the prior day on the ES Futures as it's not a FP but a gap that is still open and needs filled. It's from 3/21-3/22 and is 3336.25 to 3312.00, and it's rare to get them on the ES as it trades almost 24 hours a day. I really not expecting it to be filled on just a large B wave up (or whatever you want to label it), but at some point (before this year is over with) I think it will be filled.

My best guess is that 50% bounce level around 3050 or so on the SPX, and then down for the large C wave. I'll include Oscar Carboni's video here as he has down side targets of 2533-2525 on the ES Futures, which lines up nicely with a large C wave down. My guess there is that we hit it by the end of this month. Next week is the 3rd week of the March and those monthly options still carry more weight then the weeklies and dailies do, so we could still get that positive effect going into next Friday.

It used too be very common (before weekly and daily options) for the market makers to drive the market down (and VIX up) into the second Friday of each month so they could sell the VIX up at a high and sell make puts on the SPY as well. Then they would rip it up the third week into that Friday where all those options would expire worthless and they'd keep all the money. Rigged? Yes... of course it was (and still is), but that's the way it is.

That's pattern is NOT that common anymore as being "super accurate" but it does sometimes work from time to time. Things have changed a lot since then so now it's best to just keep that in the back of your mind and focus on the levels. I suspect we'll see a large rally on Thursday due to something coming out of the meeting at the White House. If so, it could (depending on how high it goes) squeeze out a ton of bears and setup Friday to drop hard again. That's all I see for now. God Bless.

Was that "it" yesterday? Is the bottom "in" for awhile? Time will tell but with the futures set to open up almost a 100 points off the low there's a decent chance we'll rally for awhile now. How long is anyone's guess but a week isn't asking too much I think. Here's the key though, the bulls need to get past the 3000 area on the SPX in the next few days or risk another drop to around 2627, but if they get up high enough that lower target gets killed.

Of course that doesn't mean a new downside target can't come into play after the rally exhausts itself at some higher level, as that's possible too. The only way to stop it to put in a new all time high, and that doesn't look likely anytime soon. Nothing much else here to add, as it looks like a bounce that's going to last at few days and won't hit too much resistance until that 3000 area. Next would be the prior double tops around 3130 or so, which the bulls could trigger a stop run on the bears if they take that out as I'm sure there's a ton of shorts that placed stopped just above that level. Good luck as always and may God be with you.

It sure feels like the market is crashing but technically it's not. These 1000+ point moves in one day used too be called flash crashes but now they are normal everyday swings... pretty crazy, that's for sure. I had a FP on the QQQ of 193.79 that I can't seem to locate on my hard drives right now. But I did put a horizontal trendline on my chart to mark the level. I had completely forgotten about it as the market went up enough in the past 6 months that the trendline disappeared off the screen.

It could still be seen on the yearly chart but I didn't use that time frame too much to watch the QQQ's, so I forgot about the FP level. We'd hit a low of 193.64 so far this premarket morning on the QQQ's so it's basically a completed FP as sometimes they pierce them by a few points and other times fall shy a little.  It's funny how back on March 6th, 2009 we bottomed for the entire drop from the 2007 high and here we are just around the same day and could reach a temporary bottom if the FP is accurate. Back then the 6th was a Friday and the 9th was a Monday... just like now.

I'm not sure if this is "the low" or not but I wouldn't be shocked to see a big move up off it start very soon as this kind of move down it likely to get the Fed's to step in and buy up the market with some QE or something. I'm sure the "Greed and Fear" index is going to be buried to the fear side when the market opens today, and the put to call ratio should be very high. Let's not forget that the VIX is going to spike at the open too. It should be a crazy day in the market with very big and wild swings.

It looks and feels like a capitulation move to me. But it's really all about the Fed's stepping in to help or not, as if they don't then we have much lower level coming. I think they will step in today sometime to stop the bleeding. From there we'll rally hard for awhile. I have no idea whether they can get it up to make a higher high, double top or just a lower high. I'm sure everyone will short the rally on the way up trying to pick the top, and that certainly makes sense to me.

A lower high is what I'd look for as well, but it certainly doesn't like to give traders what they expect. So, I'll just NOT try and call it right now. First let's see if the Fed's step in or not and go from there. Try to preserve capital if you can as I'm sure there will be another great opportunity in the near future. God Bless all us gamblers.

Yesterday gave back all the gains of Wednesdays up move. This morning we are down again. This isn't the making of a nice clean medium ABC up for large B up. It is very much acting like it's ready to rollover and start the next leg down.

SkyNet is super tricky so the other possibility is that this move down is done to lure in more shorts and shake out any longs that was looking for that medium C up of large B up that I was looking for as well. It still doesn't mean we are going up toward that 3200+ area for that last wave before rolling over and puking down to 2500 or so. It kinda feels like the bulls are give the bears more time with extra down days so the next move up will be more powerful and go higher then the 3200 area, and possibly even put in the low... meaning new all time highs would be next.

Think of it like this... the more time the market stays down here in this area, and still hold the current low from last week, the more time the bulls get to rest before the next attack. Bears would have been better off to let the bulls exhaust themselves with a rally up to the 3200 area as then the next drop would have the bears rested up and the bulls tired... meaning at drop to 2500 would be in play. But all this weakness, without breaking the recent low, gives the bulls the advantage on the next strong move up.

Bears should have kept the bulls running and not let them rest until they puked up in the 3200 area. Today the bears are working overtime to push the market back down, and I think this is really a bull trap. It could take several more days of weakness (smaller though) but at some point I think the bulls are going to setup a nice launching pad to rally up hard and fast from.

Probably late next week from the looks of things now. I was really thinking we'd drop in a nice ABC pattern down to that 2500 area but as each day goes by without the bulls making that last exhaustion move up to 3200+, nor the bears taking out the recent lows, the tug of war will eventually end. And I hate to say it, but the bulls usually win as the market is rigged in favor of them, not the bears. There's a time limit on these moves up and down.

Both sides need to get the other side worn out and ready to give up before the other side and take the market hard and fast in the direction they want to go. Bears should have stood down on Wednesday and let the bulls rally up to 3200+ as then they could attack and drive it down much further. Now I'm having my doubts. This again "feels" like the bulls just resting. The volume yesterday, and the last several days, agrees as it wasn't that big compared to the large volume going down from the high to the low last Friday.

Weak volume tells me bears are tired, and that further tells me bulls are resting and just waiting to attack. So for today the bears need to take it down hard and make a new all time low, and do it with volume. If not, then odds will shift in favor of the current low holding and being the end of the move down. It will suggest bulls are just lining up and getting ready for the next attack, only it won't likely stop at the 3200+ area but keep going north until it hits resistance at the current all time high.

I just knew it was too easy counting those waves and thinking that nice Elliottwave structure would play out. Too many other people saw the same thing as well, and when I'm on the same page as the rest I'm usually wrong. So, if you are super bearish here I'd start lightening up because this has all the makings of a bear trap. I smell several more days of moderate weakness to lure in more bears looking for a crash wave down.

Well, today is the day for that crash wave to happen. Failure by the bears to take out the low sets up the bulls for much stronger move up in the coming days. The light volume suggests a bear trap, but if they get through the current low with some heavier volume then that 2500 area could still happen. I won't completely rule it out, but again, this feels like a trap. I can't trade off of "feelings" so I'll be neutral here as where I think it's going. My EW count is thrown out the window, which makes me wonder again why I keep trying to do it as they rarely work out. Have a great weekend, and good luck to both bulls and bears.

P.S.  One more thing I noticed.  There's a nice "M" pattern on the charts now, and if we were to rally up hard today to make the left side of an "A" then one could argue that's it's an "MA" pattern, which is very bearish.  The right side of the "A" is the big wave down, so it could leave Monday open for a nasty drop.  It could also wait and do the rally up on Monday and setup Tuesday for the big drop.

More wild swings up and down in the market as yesterday the SPX rallied over a 100 points and now this morning it gave back half of those gains. From an Elliottwave point of view though it's perfectly normal as this premarket drop is likely a small wave 2 down inside medium wave C up, inside large wave B up.

It suggests that the top on Tuesday in the morning was the end of the medium A wave up, and the drop back down the rest of that day was the medium B wave down. Then small wave 1 up of medium C up (of large B up) started yesterday and end at the close. All just speculation of course but if the market turns back up today and makes another run high it should get through the double top as it will be a strong combination of waves.

It would be a small wave 3 up inside medium C up and we all know that in EW moves the 3's and C's are very powerful. It could easily take us up into the 3200's I think. Then a small 4 down and small 5 up could play out tomorrow to end the medium C up and the large B up. That would leave the weekend for some negative news to come out and blame the drop that should start Monday with the beginning of the large C wave down. It could get ugly for sure if this EW pattern plays out.

I know this sounds crazy but it could drop into the 2500's before the large C down ends, and possibly as soon as next Friday the 13th. Yeah, a nice ritual date there. Then the Fed's would step in that weekend to save the market by buying it out right if they have too. Call it QE5 or REPO2... who cares? Remember that they have a printing press and do whatever they want.

This is all just me guessing here, which part is based on the EW count and the rest based on technicals I see as well as the media still acting like nothing has really happened in the market with this current entire drop. Kinda a "hum hum, everything is fine" attitude if you ask me. When they are all yelling "blood in the streets", "sell everything" you'll know the bottom is near. I don't feel like we had that with the low last week.

There's no positive divergence either, so while one could argue that all of these big drops in the past form a "V bottom" and recover fast I don't think this is one of those moves. If we get up into the 3200's tomorrow, or even into Monday (which assumes NO negative news over the weekend) then that should end the large B up. Again, I don't just blindly use Elliottwave to try and forecast the market, but when combined with many other technicals it does sometimes give you a nice outlook for where the market could go.

And of course if we don't rally today then large B up is already finished and we'll be starting the large C down most likely.  I don't which is in play here?  It's the wild, wild west in the market right now.  Bulls and bears both getting whipsawed out by the bot's running stops in both direction.  May God be with you. Happy Gambling.

P.S.  There was a "possible" FP on the QQQ yesterday after the close.  It was for 209.64 and could be the low for the small wave 2 down?  Then a 200+ point rally up for the small wave 3?  Crazy moves.

Yesterday opened with a nice pop higher but it quickly faded and drop the rest of the day. This morning we are back up but not to the prior highs from yesterday. Looks like we are in chop waters right now with no clear direction. The technical picture suggests 2-3 more days is needed to work over the oversold conditions and get back to the neutral area. From there the market will need to decide its next move.

It's not looking good for the bulls this time around for doing the typical "V" bottom. This time it's acting more like it's going to play out in an ABC pattern down. This B up off the low last week did reach the 50% level with the early move up yesterday. It hit a high of 3137 and the halfway mark was at 3125.38, so now what? The next level at 61.8% is 3189.60, and then 3281.03 at the 78.6% Fibonacci mark from the all time high to the low last week. It's still not clear if that's all we are going to see on the upside or if there's one more move higher. But time wise this Friday should be enough time for the charts to reset back to neutral.

What level the market is at on that date will likely be the spot to short into the weekend. It could extend into Monday of course, but one of those days should be about it from a technical point of view. I have no opinion about today. I was hoping for a medium C wave up to end a large B wave up, but it's not looking good for that happening. Best to just wait and watch for a few more days. Happy Trading.

It amazes me sometimes how the market goes up as fast or faster then it goes down. But when stops are hit the algo's trigger buying and that's exactly what we saw yesterday... especially the last hour of the day. This morning the market is up some again but nothing like yesterday. It might be a "pause" day before going up more, hard too say?

There is Super Tuesday tomorrow and some think the market won't like it if Bernie gets picked, and that it will cause another drop. I don't know? I'm just not really into politics but if I had to forecast I'd think the market would go up if he's picked for the democrats as people would assume Trump would have an easier win and that the stock market would continue going up. Just a wild guess there on my part as I really don't know what traders will do or think if Bernie Sanders is picked for the Democrats to run against Trump.

The only thing I know is that "fear" causes the bears to short more, and then SkyNet see's it and uses the "short squeezing" as fuel to rally the market up higher, and higher. So I would not rule out much more upside this week as traders stay in "state of fear" and continue shorting every move up. On a technical bases the 50% Fibonacci Level up (calculated from the all time high to the low last week) is around 3125, so that's where I think the bulls and bears will fight it out. If there's going to be a pullback of any decent size that would be the zone in my humble opinion.

Basically, we have two possible scenario's in play. One is that we had some large degree wave 2 or 4 down and the low is "in" and we are off to the races on the upside for a wave 5 (or 3) for some new crazy high at 3400, 3700, or even 4,000 on the SPX into the rest of this year. The second scenario is that we are doing a large ABC move down for that wave 2 or 4 and we only completed the A down last Friday and are in the B up right now. This means a C down is coming at some point to make a double bottom or lower low... and that then completes the wave 2 or 4 down and from there we rally up for that wave 5 (or 3) into the rest of this year.

I do not know which is right? I will only focus on playing the opportunity given to me. Currently, it's focusing on the move up and letting it tell me when it's topping. I don't see any signs yet of that, but again, my first point of interest is the 3125 zone. I do not think that will be the top of some large B up and then we do the large C down (assuming we are in a large ABC down for some wave 2 or 4).

Odds would lean more toward this possible large B up subdividing and this first move up from the low just being the medium A wave, suggesting medium B down would start from around 3125 or so. Then medium C up takes us up to possibly fill that 2/21 gap around 3310-3330 to complete large B up. This is all just speculation on my part, but it's based on some events planned for the coming week or so.

The possible picking of Bernie today could be the excuse for the medium B down, and then I'm think the Fed's will do some announcement of a rate cut soon to cause the medium C up, which squeezes out the bears that short the Bernie win. That could take us into early next week to complete this ABC move up, and when we get close that gap fill area I'll be focusing on the DOW to see if it makes a new ATH or not.

If it fails to do so then odds will really increase for that large C wave down to happen. But if the bulls can squeak out a new all time high on it then odds will shift to the recent large drop being completed as some wave 2 or 4 down and not just a large A of an ABC down for that wave 2 or 4 down. It's never easy to figure out but that's what I see for now. Have a blessed day.

Everywhere I look there is fear of a stock market crash now. Yes, some expect a bounce but everyone is ready to short it as they think it will rollover and drop to some crazy level like DOW 20,000 or something. Comparisons to the 1929 stock market chart and this year are being spread around the internet right now. It looks so easy, just a nice bounce to some Fibonacci Level and then we crash to start the next recession or great depression.

Well, I can tell you this... back in 1929 news traveled at the speed of a snail, and traders didn't have computers to figure out Fibonacci bounces, or even know what that is? There wasn't many traders either on a percentage basis as most were long term investors. Today we have news traveling at the speed of light and everyone and his brother is getting into trading as computers have made it so easy.

The sheep (traders) know about all forms of technicals these days, including trendlines, Fibonacci Levels, Elliottwave, etc... which they didn't back in 1929. So you ask... why is this important? I'll tell you why. The sheep are always on the wrong side of the trade and back in 1929 very few got news of the negative news during or before the crash. Only at the bottom did it get negative, so of course they all sold out at the wrong time.

The market is rigged this way (actually, everything in the world is rigged this way, but that's another story), so the only thing that has changed is the speed of the delivery of the "negative news" to the sheep. Today the sheep get the fake news super fast, and now that everyone is thinking the worst is yet to come I'll tell you that it's over with.

The bottom is very likely "in" for now, or very close to it. Just like everyone was a bull two weeks ago and the Corona Virus meant nothing and was under control, the opposite is in play now.  The world is ending as the virus is going kill everyone on the planet. Yeah, and I have ocean front property for sale in Kansas too. This big drop was NOT caused by the virus, it was caused by the Inverted Yield Curve. But the media will never tell you that.

The Fed's couldn't stop it so they allowed the drop to happen.  Yeah, they are in trouble for sure as interest rates can't go much lower.  What bullets do they have left to get the market back up I wonder? More money printing I guess?

FEAR is created so they can get the sheep onboard into shorting all the moves up. That way they can squeeze them to get the new higher highs. Without shorts the DOW might be at 5,000 or lower... who knows? But if you get the sheep scared enough (aka, create a panic event... 911, Corona Virus, whatever) you will have them "climb a wall of worry".

A top will come when the masses turn super bullish... maybe at SPX 3600, 3800, or just under 4,000? I don't know the exact level, but everything is screaming FEAR right now, and that means shorts will pile on hard as we rally up.  It will be choppy and full of wild swings as the bulls and bears fight it out.  I don't expect any higher high until closer to the election, if we get one at all?

But this all tells me the odds of a repeat of 1929 are very low. After the election is over with this December we could see another big move down start, and next year could start a recession, or even a depression.  It really depends on fixing that inverted yield curve first and then possibly a debt reset?

Let's not forget that gold was linked to the dollar back in 1929, so massive money printing couldn't happen like it can today. President Nixon took us off the gold standard in 1971. Ever since then the stock market can be fully controlled via money creation to stop crashes (or let them happen if they wish).  But at some point that ponzi scheme will fail and no amount of money print will work.  This recent large drop was the first shot over the bow that it's nearing the end.  We aren't there yet but 2021 could force a debt reset as that will be the last bullet left to keep the market from crashing like 1929.

We finally hit the FP on the SPY in the afterhours/premarket session and of course pierced through it by a point or so. I'm still not clear on whether or not the FP's must be hit during normal trading hours or if the off hours count as well. But so far the that low is holding and the market has bounced back up to around the FP level, so we could open around it and start to rally if it indeed is the real signal for the low of this move.

I believe it is as I've seen many FP's like this is the past 10+ years of doing this blog, and they all marked an important turning point. So I have no reason to think this one won't do the same. The hard part here will be whether or not the rally up takes us to new all time highs and beyond, or if we make a lower high and drop again for another lower low. If we drop again then all we had was a large A wave down and we are about to start the large B up, then the large C down takes us to the mid-2900's on the SPX.

I know a lot of people are looking for that to happen, so once this market starts to rally there will be lots of shorts piling on, trying to pick the bounce high for the large B up. But this has been about a 10% correction already, so there's really no reason to turn it into an ABC move down. Again, I'm not sure one way or the other but if I had to pick I'd lean in favor of the move down being finished and we are about to start a major wave 5 up to 3600+ into this summer.

The more the news is negative, the more shorts pile on, and the more they get squeezed up higher. Sad, but that's how they take the market to insane levels. Without shorts the DOW would probably be at 5,000 or some other crazy lower level. Shorts fuel the market higher, so don't be shocked if this becomes another runaway northbound train. Time to go long in my humble opinion. God bless and good luck.

Another large drop in the market yesterday but today is mostly flat here before the open. We are getting close to the FP on the SPY, so possibly we hit it today or tomorrow as today might be a "pause" day that closes slightly green or red, leaving tomorrow for the move down to the FP target. If we can close red again on the DOW/SPX today and tomorrow (mainly the DOW as it secretly controls the market) that will make 6 in a row, a very rare thing. But most important is that the odds for the next day to be green will be very high, and not just small green but a big squeeze up move. I'm rooting for that to happen as it could easily rally 1,000 points on the DOW (100+ on the SPX), which should be the large B wave up I've been looking for to happen at anytime now.

I previously thought the large B up would happen back a few days and the large C down would take us to the fake print low, but that's clearly not the case as the entire drop looks like just the large A down to me. Therefore when this large B wave up does happen (again, hopefully this Friday with the FP getting hit on Thursday) there will still be a large C down to follow... at least current odds suggest that. It's possible that this extra large wave 4 down completes at the FP low but odds are low on that happening right now.

If the large B up would have played out in the middle of this drop it could have created some kind of positive divergence to allow the FP to be the low and a likely end to the extra large wave 4 down. But now I'm thinking that after we get the large B up the large C down can (should) take us down to the 25,600 area on the DOW and around 2960 on the SPX. I had thought the FP would be the low for this entire move, and likely the low for the year, but it's not looking that way right now.

For today I don't see much. It's clearly not bouncing back up super strong so it will be shorted I'm sure as trapped bulls try to get out on any bounce. If the last few days was some kind of small wave 3 down inside medium C down (still inside large A down) then today should be small wave 4 up. That's just a best guess based on the need to hit the FP to end this move... at least the large A down part. Sideways to slightly up early in the day and hopefully slight down for a small red close late in the day is what I'm wanting to happen.

That would finish small wave 4 up and let small 5 down hit the FP tomorrow to end medium C down and large A down. Then the face ripper rally up on Friday for large B up. I doubt if it last more then one day, but that really depends on how big the move up is? The bigger the less likely it will continue up into Monday. So large C down should start next week I'd think. Too early to know right now, so lets just focus on the next few days. Have a wonderful day.

WOW! What a drop yesterday. And it's not likely over with yet. Yes, we dropped into support from the January 31st, 2020 low area, so a "pause" is expected... but odds are much stronger for another move down before any huge rally that takes us up to new all time highs again. The futures are up small this morning and it's hard to figure out the next direction right now. What I'll be looking for is some sideways action where bounces are small and quickly sold as that would make a bear flag pattern on the daily chart.

Bottom line here is that bounces are very likely to be sold. I don't know when the next big drop happens as there could be several days of chop, which could carry us into next week even. But again, odds favor another large drop before any strong rally up to new all time highs. In Elliottwave terms I'd say the drop from the 3397 ES high to the 3213 low yesterday was some kind of large A wave down.

Over the next few days (or less?) we should see the large B up, but I'm not expect it to be strong. Don't get me wrong, I'd love a strong bounce as it would be better to short it from. I'm just not counting on it. For today I don't see anything to do. Best to just watch for a bit to see where the market goes. Have a blessed day.

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.