Another weekend gone by and almost another month. It's hard to believe sometimes that's it August... time just passes by so quickly these days. Anyway, we have pretty much a flat open today. Looking at the charts, especially the 6 hour, they look just about ready to rally. But, the first attempt might not hold so I'm not jumping on the bull train just yet. In fact, the move down from 2473 (which is likely a larger C wave) appears to have 5 waves in it already, so we might start the first wave up today in a series of waves, and the low could be in? I say that with caution as I'm not 100% sure the wave 4 and 5 of the larger C down are complete yet. If the wave 4 up ended at 2439 then the 5 down has hit 2419 so far and may or may not be finished? That 5th wave down might subdivide into smaller waves for all I know? There's great support around the even number of 2400 and possibly the market wants to get a little closer to it so it can lure in the most bears before a strong bounce starts.
So today and tomorrow might be choppy around this area and actually go a bit lower. But by the middle of the week I do expect a rally to start that should be a powerful squeeze. In fact I could see another attempt for a higher high, but I don't think it will happen. More likely a move above the 2473 area by a little to run some stops the bears have there, but below the 2488 all time high. It's common for "them" run the market up in front of Labor Day, which is next Monday September 4th. The market will be closed then making it a long 3 day weekend starting this Friday after the close. So a rally to run out the bears is very likely, and we all know how powerful these rallies are. It's never about reality, it's always about forcing bears to cover their shorts that causes such violent and fast moves up.
But don't fall for the "bull market is back" trap as this move up is likely a trap for the bulls and should be shorted in my opinion. So for today, I'm looking (and trying to get a feel for...) the end of the 5th wave down inside the larger wave C down. A rally looks really close now and should start today or tomorrow I think. I also think it will take out the 2473 area to clean out the bears. It might take all week but by Friday I expect higher prices and today or early tomorrow I can only see another 10-15 points on the downside as possible... maybe none? Have fun staring at the moon tonight...
