This has been a huge failure for the two FP's on the SPY from the Yahoo site as I'm still scratching my head as to "why" they were put out if they aren't going to hit them. It's been super frustrating to miss this big rally and to short it many times on the way up, only to see it go higher.

I'm sure we will have a pullback soon but with so many bears that are toast now, and all the bulls that missed the move up, it will be bought when it comes. And the technicals are still not overbought on the daily chart yet. That doesn't mean it has too get fully overbought before it pulls back, but it does mean that it could continue higher first before we see any pullback.

However, the 6hr chart is overbought so the upside should be limited now. We can see that is already happening as after the ES made a new high we've just been grinding sideways to slightly up.

I could make a case that it's "basing", making a bull flag, and that is true, but I think for that to work again I'd estimate that we'll need a week or more of "basing" to have another strong breakout leg higher. For example, back on 12/29/21 it went sideways until 1/5/22 to "base", which was after a new all time high too. But it failed to breakout and rolled over to start a year long correction. Now I'm not expecting that to happen again as the technicals aren't the same now as they were back then.

Technicals are closer to the 11/8/21 to 11/29/21 period, which produced a pullback to hit and slightly pierce the 50 day SMA, which is around 5205 currently. So from a technical point of view a pullback to the 5200 zone seems likely, and I think many others are looking at the same scenario. Of course if too many people see the same thing happening then odds are it won't be that simple.

I think I'm dreaming here, or just "wishful thinking" but if everyone buys that zone then we know it must go lower, so maybe it still does go down to the FP? I'm sure that's just a dream but I'm going to just let the technicals talk to me. If and when the 6hr chart gets oversold again I'll look for a strong bounce.

Then I'll look at the daily to see if it's oversold, or if it can go lower. Lastly I'll look at the weekly chart to see what it tells me. Right now it's trying to turn back up, but the moving averages have not done a bullish cross yet. That's not a "must happen" requirement as long as the monthly chart is still bullish and support the market, which it is.

But it's getting extended for sure, and I doubt if it can go more then another 4-6 months. The volume peaked on that chart in March and since then it has been declining. Back in 2021 the volume peaked in August and the market went higher into a top early January of 2022, which was was 4 months basically. If this repeats then we should top in August, September at the extreme, but could top as early as July. It's not some exact pattern that will repeat the same every time but it is a "sign" that the final high is just months away. You can't keep going higher and higher on lower volume forever.

It will end soon, and the average is about 4 months from the highest volume. Now if this month makes another higher high on the volume then that technical pattern will be reset from a March volume monthly high to a new on in May. With still half the month left it could make a higher volume bar, but right it's not happened. I don't have much else to talk about right now as until we get a turn down there's not much to say or do.

Have a blessed day.

A "pause" day yesterday as the bulls finally took a breather.  Still no damage to the bull case.  Bears MUST have a large down day to break support if there's going to be a real correction start.  Nothing really to say until this happens.  A sideways move for several days will be a bull flag, which bears don't want to see.

I don't expect much today as it's OPEX, but next week will be super important for the bears.  They need to start breaking support, and fast.  The week after will have Memorial Day on Monday the 27th, so the market will be closed.  Around that period would be when I'd expect to see the low come in for the correction.  Either before it or after it, but I lean toward after it.

Why?  Because of the common pattern for the market to have "turns" around holidays.  Many times I've seen sell offs happen into them and complete shortly after them.  There seems to be some bad news event released over those 3 days that just happen to come out, and that's is usually the "capitulation" move to finish it all.  Will it happen this time too?  I don't know but it's something to keep in mind if we do indeed get a move down started next week.

Have a great weekend.

Blow off top? We got the rip after the CPI that I was looking for, but they skipped the dip. They just gaped up and squeezed the rest of the day to put in an early all time high on the SPX cash and late one into the close on the ES futures. From a technical point of view it looks like it can go higher as the MACD on the daily chart is still pointing up strongly with no sign of turning down. But that's not something you can use to forecast a "turn" as it won't show any weakness until after the move down has already started.

This morning we have the jobs number coming out before the open, which might be used to get that turn down? If not then there's not much left as far as "events" that can stop this bull it seems.

I've not had any new FP's on the QQQ since the 4/18 low, but we finally got a one yesterday before the open.  Here's that chart...

It's never a guarantee of course but during the early part of the A wave down from the 3/31 high there were many FP's that appeared, which caused a ton of "whipsaw" action until it got later in the move.  Then the FP's stopped appearing and we just went down and bottomed at 4965, where there was still no more new FP's during the entire rally up to the current level.

What does this mean?  It's hard to say for sure but it might mean that the lack of any FP's means we will be in a steady trend move and when the FP's appear again we'll go back to the wild up and down swings as the market makes a turn to start a new trend, which would be down this time around.

However, the technicals are currently still bullishly aligned on the daily chart, and with the new all time high happening we could just continue much higher and the 2 FP's I have on the SPY might not get hit until some future time that's weeks or months away.  That's the downside to the FP's you never know when they are going to get hit.

As for today, I really don't have any clue.  I'd say simply that we will continue going up until we don't.  Every time I think we have topped it keeps going higher, so I'm just going to let the market top and turn whenever it wants to.  I can't force it, but double tops usually produce a pullback of some degree, so I'd have to think that's coming soon.

Have a blessed day.

A slow day the first half yesterday but late in the day the squeeze started. This "front running" of the CPI should cause the stops to be run overhead before any turn back down happens.

I don't know if it's going to make a higher high on the ES or lower one, but I wouldn't be shocked to see a new one on the ES and lower high on the SPX cash as there will be an hour of time between the 8:30 am EST release of the CPI number and the 9:30 am open for the cash market. I've seen this before where they do the squeeze in that hour period but by the open it's back down to around the close from the previous day.

In fact you can look at 12/13/2022 as the perfect example, as the CPI came out then and the squeeze on the bears caused a rally up to 4180, but by the open that day the SPX only hit a high of 4100, and that day put in the top for the rally. After that we saw a multi-day decline, which was a "higher low" then the 10/13/2022 low (probably 50% retrace), and that's what I believe most traders are expecting to happen again.

I would think the same thing if I didn't have the FP but since I do I must be open to a flush out drop. Back in 2022 we already had a year of a correction and was below the 200 day moving average, and we were coming up, but currently we are near all time highs and above the average.

This tells me the opposite can happen then what happen then, meaning a lower low is possible this time around. It's certainly not expected by the majority of traders as I know most people are just looking for a higher low to get long at, but isn't that just too obvious? I think it is, but until it happens I'm just guessing I guess. If for some reason the CPI doesn't cause the move then it could happen from the jobs number tomorrow before the open. They are very sneaky, so I wouldn't be shocked to see a move down at the open from the CPI that gets fully reversed into the close to shake out the early bears. Then down for real Thursday after the jobs number comes out.

Have a blessed day.

A pause day yesterday as we wait on the CPI tomorrow before the open. We also have the PPI this morning and Powell speaking today as well. I don't expect much from those events but the CPI should cause a move in the market.

I don't know if it's going to cause a run of the stops overhead or not, as it might run them... or just might not and instead start the correction I'm looking for. Many CPI days have some stop run happen and then a reversal but it's not something that can be foreseen in advance. It's truly a flip of a coin, a "roll the dice", a guess basically. I'm looking for a short sooner, but I'm not sure if I'm going to wait until after the CPI number or before it.

I don't expect any straight down move to happen, as even if it rolls over after the CPI and doesn't run the stops there should still be some bounces to get short at. But since this should be a Large Wave C down those bounces might not be a strong as the early ones that followed the start of the Large A Wave down from the all time high.

And at this point most traders are only looking for a higher low, so we might not see a good bounce until we pullback to about the 50% level of the rally up... basically around the 5000-5050 zone. That's all I have.

Have a blessed day.

A flat day on Friday as the market clearly is showing signs of exhaustion. At this point I think most all of the bears have given up on the lower low and are now looking for a higher low from the future coming pullback. I think that I would also be looking for a higher low if I did not have the 2 FP's on the SPY, but since I do have them I must keep the door open for them to be hit before another new all time higher high is put in.

We are super close now to just that, and one might even say we are at a double top. But I think we need to be a little closer to say that, like it should be within 10-20 points in my opinion. I think we are closer on the DOW to hitting a double now, but even its' not there yet. And really it would be a triple top as we've already had a double top on it from the 3/21 high and the 4/1 high.

It doesn't matter really as we are within spitting distance of a double top (or triple) on all three of the major indexes, so a turn down is coming soon. Will it wait until after CPI this Wednesday or will it front run it and start today is the question?

If too many people are all looking for the same thing then we know it's not going to happen. So are there a lot of traders looking at the CPI as the likely "turn date"? I think there must be as most traders know it's coming so I'm leaning toward the market starting to pullback in front of that event and do the typical wild swings up and down after it, but when all the dust is settled we continue in the pullback.

This week though is probably going to be choppy as it should be the "topping week", and that's where the final smaller degree waves on the upside finish and the smaller degree waves on the downside form and overlap to setup the larger down waves. Those waves would of course the wave 3's inside the Large C Wave that should complete by the end of the month.

We have Memorial Day coming up on Monday, May 27th and the market will be close since it's a holiday, so I would not be surprised to that 3 day weekend used for the bottoming period. Many "turns" happen over a holiday weekend, and this one would line up perfectly with a bottom.

Meaning it happens before the weekend (Friday the 24th) or the few days right after the weekend (the 28th-30th). I'll be looking close at Friday the 24th as if we are around a double bottom from 4/19, then it's the perfect bull trap to make the market look bullish in the holiday but then do the flush out drop to hit the FP after it with all the bulls holding longs during those 3 days. You gap down on Tuesday the 28th and keep going until the FP is hit over the next day or so.

Then the bears will pile in short as the bulls give up, and that's when the low is really put in. Just a theory of course, but based on how common it is for the market to put in "turns" around holidays, so it's not out of the question to see it happen. Not much else to say until we start to rollover.

Lastly, here is last Fridays wave count, which has us in the final 5th wave up this morning, which would be Tiny Wave 5, inside Small wave 5, inside Medium Wave C, inside Large Wave B.

Have a blessed day.

The market failed to due the pullback for small wave 4 yesterday that I was expecting, so it suggests that I'm wrong about the subdividing waves inside of Large Wave B up. I posted an updated chart yesterday in the chatroom and on twitter. I've just taken out the Tiny Waves basically, which should put us in Small Wave 5 up now inside Medium Wave C of Large Wave B.

It speeds things up basically and suggests we top faster, like today possibly. Then the first move down next week should be part of the Large Wave C, and any bounces back up should not make higher highs but a lower high. It's went a lot higher then I thought it would as I thought it would stop at the 61.8% retracement level but we are at the 78.2% level now. Will it stop here? I just don't know? I only can say that we are overbought fully now on the 2hr and 6hr charts and a turn down can come at any time now. Here's yesterdays updated chart...

I didn't put Large Wave B on the chart but it's where Medium Wave C and Small Wave 5 are at. We are there now, and into strong resistance from the 4/5 to 4/10 chop zone. Will it get through that zone? I don't know? It's possible that they us the CPI number next Wednesday morning (or PPI on Tuesday morning) to "run the stops" above that level, and then drop. It would be a double top basically as running the stops above there would get us to 5300+ I'm sure. We've seen the CPI cause big turns in the past, so this could happen again. In fact it's been awhile since we seen it used like this, so we are due for it to happen again. If that is the plan then I'd only look for a small pullback on Monday and Tuesday, which must stay above the prior 5200 level of support. It would be a subdividing Small Wave 5 I think, and the chart below explains it.

As you can see I've labeled the move up as either completing Tiny Wave 1 up or Tiny Wave 1, 2 and 3 up. Hard to say which but if we go with the market being in Tiny Wave 3 then we should have a little more upside today and likely do an ABC down for Tiny Wave 4 into Wednesday morning. Then the CPI can "run the stops" for Tiny Wave 5 up, which will complete Small Wave 5 inside Medium Wave C of Large Wave B.

If not, then we could be topping today as the Small Wave 5 won't subdivide into next Wednesday and will end today or possibly Monday. It could subdivide, as it's likely that the low on 5/9 before the open at 5195 would be Tiny Wave 2 down, meaning Small Wave 4 ended before the open on 5/8 at 5188... which is what I think is accurate.

I guess I could say that the 5195 low was a "truncated" wave C in an ABC down for Small Wave 4 with the wave A being lower at 5188, and that could be accurate? That would then have the current rally up from the 5195 low being just Tiny Wave 1 inside Small Wave 5 up. That is possibly but it looks more like a wave 3 and not a wave 1, but in the end it's not important if the CPI number is going to be used to put in the last high.

I can go back and figure it out after the fact, so I'm not too worried about it. My goal here is to just let today, Monday and Tuesday play out, as even if we top today and drop into early next week the CPI number will still (very likely) be used to produce a stop run above. Maybe it's only back up to the current high and point lower? If so then we will have a Small Wave 2 up inside Large Wave C down as the pullback in front of it would be Small Wave 1 down from some top today. Either way it looks like next Tuesday by the close or Wednesday morning after the CPI will be the ideal short. That's all the possibilities that I see.

Have a great weekend.

It looks to me that Tiny Wave 4 down finished early yesterday and Tiny Wave 5 followed the rest of the day. It's either finished or should finish today, and then Small Wave 4 down should follow, which might last in tomorrow or Monday? Target is still a test of the 5150 zone, which it might pierce and reach 5100, but that's not something I can predict for certain.

After that, which will be next week, we should see that last Small Wave 5 (possibly Wednesday?), which might make a slightly lower high (truncated 5th), or higher high. I lean toward the higher high as that will suck in the most bulls to finish Medium Wave C up inside Large Wave B up. That's the ideal move to trap the most traders on the wrong side before we get the drop for Large Wave C down. It might end before the end of the month and then we get a quick bounce up and back down for a double bottom around May 30th or 31st where "turns" commonly happen.

That's a tough call to figure out in advance, so I'll just have to keep adjusting as we go forward in time. If I can see 5 clean waves down for Large C into say the 24th (for example), and we hit the FP, then I'd look for for a bounce the following week that gets retested into the 30th or 31st as I don't think we are going up huge until the start of June.

Have a blessed day.

A pause day yesterday that closed a little positive but not much. Overall it just held the 5200 level as every attempt to breakout over 5230 failed. The market is basing for a big move, and most of last month I would say that the "basing" is bullish, but not this time around. If bulls can't get through the big resistance zone up to 5170 by the next day or so they will be forced to punt the ball to the bears.

But... I don't think we are ready to start the drop to the FP yet.  The window of time has run out I believe.  Instead I think we will get a pullback to support from the falling white trendline around the 5150 zone.  From there we should go back up but it might take a week or more to take out yesterdays high.  Here's the possible wave count...

I discussed this as possible last week, and while I wanted to see the FP hit already it's just not looking good for that happening now.  This looks to me like it's going to drag out into the end of this month.  OPEX is typically a bullish week, or at least a choppy one that doesn't tank hard.  A rangebound trading zone is possible for that week, which is next week.

That would leave the last 2 weeks of this month for the large C wave down to play out and hit the FP, which should have 5 medium waves inside it and of course 5 small  waves inside the wave 3 of that large C wave.  But that's looking more and more like it's going to happen during the second half of this month.

This is needed I think for the weekly chart to have enough time to cool off from being so overbought into the April top.  If the whole month of May is used to reset it then June can be a strong rally month where a new all time high will likely happen from.  So for now, this wave count and forecast is what I think will play out.  No amount of rooting for, begging for or praying is going to make the market do what you want it to do.  You have to accept what it gives you and what it's telling you is most likely to happen in the future.  This is what I think it's telling me, and will happen.  Of course I'll adjust as we go forward.

Have a blessed day.

Another nice up day yesterday. It's truly amazing to see it reach my 5192 target, and pierce through it. From everything I see there's really nothing left on the upside here as it will be like picking up pennies in front of a steamroller because the nickels, dimes, quarters and dollars have all been picked up already.

I took another short yesterday and will be adding my last one today so I can average into my position. We have a big drop coming and it should happen this week. My biggest worry is that they hold it up all week as then the drop could be much larger then just down to my 2 FP's on the SPY, which are new to me as they are from Yahoo and not Think or Swim. So I don't have a multi-year track record of them being accurate like all the FP's on Think or Swim.

But again, just what's the odds of 2 of them being put out pointing to the same area and disappearing the next day? I have to give them attention as they also align up as the expected target from prior declines in the past. Like for example, this decline looks similar to the 9/3/21 ABC correction into the 10/4/21 low, and for that low the first A wave drop was followed by a similar 61.85+ rally, which then was followed by a C wave down that equaled about 75% of the A wave.

I find it common that in many pullbacks inside a larger bull market, in where it's an ABC, the C wave is truncated short of the A wave. That was the case back then and could be the case now too? Ironically the 75% mark down for the C wave coming next is about where the FP will be at. The MACD's and RSI look similar to back then too, so there are many reasons to suggest we will have another leg down before this correction ends.

Nailing the exact day it turns down though isn't easy, but we should be finished now as the 61.8% retrace level has been hit and pierced. Nothing left but some chop I guess, or just rollover and start the decline.

Have a blessed day.

We got the rally I was expecting on Friday, and it stopped right at the falling white trendline of resistance, which is shy a little of the actual 61.8% retracement at 5192, but this isn't an exact science.

The market never makes it that easy, and will commonly either pierce that zone or fall short, so I took my short Friday and will ride out anymore upside if it happens. The last move down is still coming in my opinion and should happen this week. The double conformation from 2 fake prints of 483.07 and 483.62 on the SPY gives me high confidence that we will hit them.

Currently, as of the close Friday, the ratio between the SPY and the SPX would put the SPX at 4844.77 if the 483.07 FP on the SPY is hit. If it's just the 483.62 FP then the SPX should hit 4850.28, and with the the ES closing at 5161.50 on Friday, and the SPX at 5127.79, that's about a 33 point difference.

Now that could be off a little as the ES did trade a little longer afterhours, while the SPX closed at 4pm EST, so I'd lean closer to about 30 points higher on it as I think it went up a little higher. The close right at 4pm EST was 5156.50, so that's like 29 point difference to be precise. Anyway, you get the idea. We should hit the FP on the SPY and pierce it by some amount. That's the exit for my shorts and I'll look for a long right afterwards.

Have a blessed day.

So far so good for my thoughts as discussed in yesterdays post. The market held support yesterday and went up nicely afterhours from the Apple earnings. This morning we have the jobs data coming out before the open and we've made a nice bull flag after the close just under resistance. If there's ever a time to push through and run the stops overhead it will be today.

Just rig the jobs number (they always do anyway) and we should push right through. I'd then look for my upside target zone (posted yesterday) to be hit, which will complete a 61.8% retrace. If that happens early today it's a short, and I think we could see complete reversal by the close as well. It should then start the drop to FP into early next week. Once it starts I don't expect too many bounces, if any?

The scarier it is the more powerful the squeeze back up from it... meaning we could see next week completely reverse the down move and put in a nice bottoming tail candle on the weekly chart. They should let anyone catch the coming down move to the FP after it starts. So I'll be looking to short it today if we reach the upside target zone, which is just a littel under 5200 on the ES basically.

Have a great weekend.

Sheesh... what a curve ball yesterday with that fast squeeze up after the FOMC that got fully reversed by the close. Insane move, and one I did not see coming. But after it rallied I thought to myself that it had to be a wave 2 up in the C down that should hit the FP in the next day or so. I then drew up a wave count and posted in the chatroom, which is below.

The market rolled over after I did that chart and I thought I was a genius as we were starting a wave 3 down inside a C wave, and the FP was within spitting distance now. WRONG! The market stopped right back into the breakout zone around 5050 and just refused to breakdown after the close.

I mean, if I was right we should have dropped 20+ points after the bell rang and should be opening up the next morning with a nice gap down. But instead we started grinding higher afterwards and continued all night, so I that point I knew I was wrong and something else is in play. Back to the drawing board I went and below is what I discovered.

One of the big things I covered earlier this week (and last week) was that the market should reach the 61.8% retracement level before another big leg down. And when we were going down in the large A wave I thought it would bottom at the FP on the SPY (around 4880 ES) and then we would rally up to that 61.8% retracement level (about 5162 roughly... if it was going to play out, but it didn't).

Instead we bottomed early at 4963 and then ran up about 50% and stopped. From there we started down, which was that big drop on Tuesday (my small wave 1 to 2 move), and I thought that we would be continuing lower after the FOMC meeting yesterday to hit the FP and then we'd rally up to the 61.8% level.

But you see if it happened like that then we should go down lower again to 4600, 4400 or even 4000 as the large A down would have been just one big move straight to the FP, but that didn't happen. Instead we are going to get a complete ABC down to the FP, and that large C will end the entire correction and we will not go to any of those lower targets. Instead we'll start the multi-month rally up to 6000+ into the summer. This playing out like this make me confident that the FP is "the low" for the entire correction.

The only thing needed to confirm it is for the large B wave up to rally up to the 61.8% level, and I think that's going to happen into Friday. I think afterhours yesterday started a tiny Wave 3 up, inside small wave 3, inside medium wave C of large B. The upside target of 5187.50-5192.16 should be hit Friday, and I say that because I think they will use the earnings for Apple after the close today (4:30pm EST) to push through that falling white trendline and squeeze all the shorts out that have stops above the 5150 zone.

This will look super bullish to most but to me it's going to be the ideal short for the large C wave down that should end sometime next week. In fact, it could start on Friday and everyone will try to buy the pullback but it will likely keep dropping all day if it does start then. This is a super sneaky move, and one that I would not have figured out if I didn't go back to the drawing board and ask myself "what is missing"? The answer is the 61.8% retrace and the C=A point match... and the running of the stops over 5150. Get all of that done by Friday morning and this market is toast I think.

Have a blessed day.

WOW! What a nice drop yesterday. As of the close we are only about 150 points away from the FP on the SPY now, so it could hit today after the FOMC meeting, who knows for sure? I'll be ready to go long after it's hit, whether that's today or tomorrow or Friday. Ideally we hit it today as then everyone will be super bearish calling for much lower prices, but since I have the FP I know it's a low and I'll be going long. The SPX target is 4851.50 for the 483.62 FP and 4845.99 for the 483.07 FP, so 30 points higher on the ES would be its target now it's that's the current spread between them.

It was about 36 points last week but it's getting closer as time goes forward and should be close to equal when the June contract for the ES expires and we roll into the September one. Anyway, my focus will be on the hitting and piercing of the FP on the SPY as that's when I'll look to exit my short and go long.

I suspect that Apples earnings at 4:30pm EST on Thursday will be used to turn the market back up and start the big rally. That's after the 4pm close, so I'm hoping that we will see the FP on the SPY hit right before so that bears will be trapped short at the close Thursday. Then Friday they can gap it up and squeeze them all day to recover a lot of the move down, which should continue into next week as well. The FP could be hit afterhours Thursday as well (this assumes it's not hit today), but that wouldn't make sense with my thoughts of them using Apples earnings to start a short squeeze as they will want to hit the FP prior to that coming out.

So that suggests they will hit it beforehand, as with only 30 minutes from the 4pm close to the 4:30pm earnings announcement that's not much time to hit it. Maybe it happens though, who knows for sure? If we are close to the FP going into the close Thursday then I'll look to exit my shorts and get long. I'd love to see it hit today though, but that might not happen. Anyway, that's my thoughts for what could play out. We'll see.

Have a blessed day.

A nothing day yesterday as the market is in a "wait and see" mode it seems. Really not much to add here as the 50% retracement level has been hit and pierced so there's nothing left for upside in my opinion. Yes, there could be another squeeze to hit the 61.8% level, which would probably reach 65-70% before it finishes.

I say "could be" because of the FOMC meeting should have some wild swings from it, which is common really with most meetings. And we have Amazon earnings today as well as Apple on Thursday, so there's lots of "events" that could cause another squeeze. There is also the common pattern of a "turn" happening around the end of the month, which could happen at the end of any month or the start of the next month.

We are right in that window now of time, so even if we get another pop higher this market should rollover and start a pullback that should last into next Monday at least. Last Thursday I posted this chart, and it could still play out.

But... if we reach 61.8%+ (5192+) before we make that turn then I have to think the top is in for this rally and that we'll be going down to the FP on the SPY next. That means we should not go back up into OPEX for a higher high, but a lower one. That's if they don't just just flush it down for 3-4 days quickly to end it this week or by early next week, which is very possible as we are only around 260 points or so from the FP, and that could easily be hit in just a few days.

Yes, they can just do a small dip for a wave 1 as shown on that chart and then chop into OPEX and finally drop for the last move. And that kind of move would suck as it will be so hard to trade and very boring. We have already had a choppy move down for the A wave shown so it doesn't normally repeat the same pattern. Typically near the end of a move there is a final capitulation drop, so I'm still leaning toward that happening. They certainly don't make it easy, that's for sure. That's all I have for now. We'll see how it plays out.

Have a blessed day.

We got the rally to the 50% retracement that I was looking for on Friday by coming just 2 points shy of 5148, so that's a hit in my book. This week tells all for the bull or bear case I think as we are still in a bigger term bull market but the correction should not be over with just yet.

At least that's "if" the FP on the SPY of 483 is a real one and I think it is. In fact it was put out twice, once on March 1st for 483.07 and again on April 11th showing 483.62, so I have to think they are real and will be hit before the bull market resumes it's next big leg up. This week is when that FP should be hit as we have the FOMC meeting that can be used as an "event" to blame it on. We all know that the market loves to use "events" to trigger big moves, of which many are traps. I tend to think this one will be a trap as well.

I don't think we are going to rally up into the meeting but instead I think we pullback into it but save the hitting of the FP until right after the meeting. It will be a great way to scare the bulls out and trap the bears with a fast drop to the FP, which then bottoms and turns back up just as fast.

There won't be any bulls on board and bears will be shorting the crap out of it, which will be the fuel needed for a big squeeze to start from. I would not be shocked to see us pullback to around 5000 on the ES going into the meeting, and then flush down 100+ point to hit the FP (around 4880 on the ES roughly).

And then a full reversal back up to above 5000 by the close, with 5100+ possible by the end of the week. This is my dream scenario and one that would trick the most traders I think. The FP low would be the Head in a likely "Inverted Head and Shoulders" pattern that I still think will form. After the squeeze is finish, which could last for a week plus, there should be a pullback for a higher low to make the right shoulder as the left shoulder is the current low from 4/19 at 4963.50, and might take all of May to unfold.

The correction in December of last year to January formed a nice inverted head and shoulders, and I think this current correction can form another one. All just speculation at this point, but certainly possible. Now if a new FP comes out, which shows a lower low then the current 483 ones, then that right shoulder won't be accurate and we'll just drop to the new FP I guess. But right now I'm only looking for a higher low on that last pullback, and then the bull market to resume.

For the short term, pretty simple really, I'm looking for a pullback into the FOMC starting today, and that's even if we go a little higher first. It changes nothing as this rally up from the bottom is still just a bounce in a correction that isn't over with in my opinion, and won't be until the downside FP on the SPY is hit. If for any reason it is not hit this week then I don't think we'll see it hit until the last week of May.

Have a blessed day.

The Typical Scenario...

No time was wasted yesterday as it put in the bottom for my smaller B wave, which I thought might carry into today where the final low would be but it didn't take that long and just turned back up and grinded higher the rest of the day with a big squeeze after the close. We are clearly in the C wave up now, inside a bigger B wave. The chart below was posted in the chatroom yesterday and it's playing out nicely.

I thought we would only go up about half of the down move and then pull back one last time today for a higher lower (or slightly lower low) but that part was completely wrong as we just took out the 5128 high of the smaller A wave in the afterhours session.

I'm sure that the smaller C wave will unfold in 5 waves but I'm not sure where we are in it right now. The afterhours squeeze sure felt like a wave 3 of some degree, and there was a pullback around 2:00-2:30 pm EST yesterday, which could have been a wave 2? It's hard to figure out the smaller waves but it's clear that we are inside the smaller C wave up in the bigger B wave.

I think it will end between 5192.16 to 5230.87 going into next Wednesdays FOMC meeting. Then I think we drop for the bigger C wave over the following several weeks. It could end up being a fast drop, but it could also drag out in time and last into the end of the month. Yes, that would stink as it's very hard to trade when it has so many up's and down's, which is exactly what the bigger A wave had. It drove me nuts in the beginning with all the fast one day drops that got reversed back up hard the next day. Hopefully the bigger C wave won't do that and will just drop non-stop with next to nothing for bounces and hit the FP on the SPY within the typical 8-10 days that these patterns commonly play out with.

As for today, it's a Friday so I'd expect it to close green. There could be some kind of pullback today but usually they hold the market up and go sideways after doing powerful squeeze like they did after the close yesterday. Then Monday and Tuesday should be choppy too as the market waits on the FOMC. Somewhere in there we'll see the wave 4 down and then the wave 5 up into Wednesday ideally.

The Wild Card Scenario...

I give this equal odds of playing out.  We have got really close to the 50% retrace from the bottom compared to the all time high, which is 5148.50, and we are super close to it now.  If it's hit today I will have to short it and look for the drop the FP to happen into the FOMC next week to put in a low, not a high.

Bulls do NOT want to see this happen if they plan on going up to 61.8%+ into next week.  Bulls will want to go sideways to build a base after such a strong move up.  That means they will want to just hold this zone today and NOT rally up to the 50% retrace zone today, as if they do that then the 61.8%+ is likely off the table.

It means the entire rally up from the 4963.50 low is just a wave 4 and that we'll have that last move down to the FP on the SPY afterwards, which will be the 5th wave of course, and should bottom into the FOMC next week.

If we see a rally up to the 5148.50 level I will get bearish and will short it looking again for my FP on the SPY of 483 to be hit next week, and likely right into the FOMC meeting.

In conclusion...

The market is either going up to 61.8%+ into the FOMC, which would require today to be a "rest day" where the market does NOT go up much higher, and stays under the 50% retrace level... or the market will exhaust itself with a last squeeze up to the 50% retrace level today, which will kill the 61.8% target and result in a drop to the FP into the FOMC instead of a high.

Have a great weekend.

As expected we had a pause day yesterday being up part of the day and down part of the day, but closing about flat. Then afterhours we dropped more, which is making a nice inverted head and shoulders pattern as shown below on the 2hr chart.

Using my FET system it projects a high of 5230.57, which is higher then the 50% retrace I was looking for, but it's something to keep in the back of my mind as possible. It would be around a 70% retrace of the down move from the top if it happens. I'll just be looking at the technicals and the typical turn zones, which is around the end of this month.

We have the GDP numbers and Jobless Claims out this morning, so a nice move up or down should happen.  From a technical point of view we should go up, but we could drop hard too.  I don't think it's going to happen anything is possible.  I know at some point we are going down to hit the FP on the SPY, but I lean toward more upside first.

Next Wednesday is May the 1st and we have another FOMC meeting, so if we can rally up into it then I think we could top out and drop hard after it.  Most of the time FOMC meetings are non-events that commonly have the following Thursday and Friday going up some.  Then the following week the market can pullback if the technicals are overbought, or rally if still bullish.

My point is that they are usually bullish when all the dust settles.  It's about time for a shock I think.  The weekly chart is still putting downward pressure on the market and a rally up into the meeting will get all the short term charts overbought, and the daily will have come back up from oversold, so it can roll back down again.

These technicals suggest another move down is coming, and I have the FP too.  Seasonality is usually weak in May as well, so there's lots of reasons to think that this coming meeting could shock the market.

Have a blessed day.

Yesterday rally has likely killed my wave count. The resistance was busted through, and now we appear to be getting the 50% rally up that I thought we wouldn't see until after we hit the FP on the SPY. This changes everything I think as now we will likely put in a low at the FP into early May and that will be "the low" for this correction.

I had previously thought that we would rally up 50% from the FP and then go back down to 4600, 4400, or even 4000, but those odds are super low now. We would have to rollover today and drop hard to the FP into this Friday, which then could bring those lower targets back in play, but that's the only way I see it possible. I posted the chart below yesterday in the chatroom, and it's what I think will play out now.

The top for this rally could end by next Monday or Tuesday, and then the drop to the FP should follow and bottom within 7-9 days (love to see it happen in 5-7 though). For the short term we are getting extended, so a pullback of 30-40 points could come at anytime. Here's a chart I posted yesterday showing it.

This is disappointing but we must remember that we are still in a bull market, so I really shouldn't be surprised. This will end up being about an 8% pullback from the top in an ABC pattern if my thoughts on the charts on this post are accurate. We shall see.

Have a blessed day.

We didn't get that last drop yesterday as the market was too oversold short term it seems. A nice bounce happened instead, which could last one more day I think, but it's close to over with. It's a wave 4 up I believe, and here's a chart I posted in the chatroom yesterday showing it. Afterwards we did go up and pierce through the falling white trendline but the market couldn't hold it and closed below it yesterday.

Now that was the 2hr chart, which was getting extending yesterday for sure, so there's limited upside on it. But the 6hr chart says we can go a little higher on it before we top out for the wave 4 up. Whether that happens or not the market is still missing the last move down to hit the FP on the SPY, and I'll be looking to exit my short there and go long. Nothing more to really add. I'm just being patience.

Have a blessed day.