Today is day three with the futures still unable to get through the falling yellow trendline. This is NOT good for the bullish case as this is clearly too much time for a wave 4 down... if that's what it is? I was thinking we are in a C wave up and the rally up on Friday and into Monday was a wave 3 up inside that C, which then should have be followed by a small wave 4 down and then 5 up to make a higher high then the prior double top levels.

But "time" is the enemy here. You can't take too much time to carve out a wave 4 or else it's not the correct wave count. The late day move down was probably the wave 4, which suggests the move up this morning is likely a wave 5 up. But that overhead resistance needs to be pierced through if the bulls want to get a squeeze going on the bears. Otherwise the bears are going to take this pig of a market back down again.

There's now negative divergence on this 60 minute chart and the 4 hour chart (not shown) is still very overbought and looks ready to collapse. Bottom line here is that I believe we are about to see the last move up today before a drop starts toward that rising purple trendline at the very minimum. Also I see what looks like an "MA" pattern and we are at the top of the "A" right now.

This pattern basically measures the move up for the "M" part (some say the "A" part) and doubles it in value to get the suggested move down for the right side of the "A"... so from the 2775 low (the start of the "M") up to the 2940 top of the "M" you have about 165 points. If you calculate from there then you have 330 points down expected from the top of the "A", which is around 2930, so that's a drop to 2600 basically.

If you instead just use the point rally up for the left side of the "A" you have it starting at 2819 on 8/15 with again a top around 2930, so that's 111 points. Then double it and you get 222 points down, which from the 2930 top of that "A" you get 2708 as a target. Obviously by now you have probably figured out that the right side drop of the "A" in an "MA" pattern is a C wave down of some degree in Elliottwave terms.

Now I don't recall having any FP's down that low so I'll just keep those targets in mind should the bulls fail today to get through the falling yellow trendline of resistance. If they succeed and take out the two prior double top highs (the tops of the "M") then the "MA" pattern will no longer be valid. The bulls had certainly better step up to the plate today with their best hitter or they are going to be in serious trouble in the next inning of this ball game. That's all I have for today. If I take a short I'll post it in the free chatroom. God bless and have a great Wednesday.

The futures are set to open mostly flat this morning, which after such a strong rally up yesterday that's to be expected I guess. Yesterday near the close I wrote in the chatroom that I thought we are in a C wave up and that yesterday was the wave 3 up inside it. So I was expecting a 10-20 point pullback but I wasn't sure if we'd open down that amount or gap up first that amount and pullback to close the gap.

In either scenario I viewed the odds of shorting into the close as low so I stayed in cash. This morning with a flat open it looks like that was a wise decision after all as that 10-20 move for wave 4 might just be a sideways move that gives even less points. In Elliottwave (EW)  it's common to have the wave 2's and 4's flip... meaning if the wave 2 produced a nice move (down or up) then the wave 4 would usually be a small sideways one.

Even-though I'm not a believe in EW being able to forecast the future moves it does still provide value when added with other methods of charting. Since the wave 2 down on 8/15 was a drop from 2871 to 2825 that's a nice 46 point move, so it stands to reason that the wave 4 will be a sideways one. Looking at the wide gap between the moving averages today (green and orange lines) they should merge again later today and decide the next move. The MACD's in the lower zone should work off the overbought conditions as well and either turn back up or collapse lower.

If this is a wave 4 of a C up then the wave 5 up should turn those MACD's up and keep the moving averages going up as well. But with the falling yellow trendline of resistance overhead on this 60 minute chart of the ES I suspect it will keep the market going nowhere today. This leaves the door open for the bulls to gap over that resistance on Wednesday to take out the two prior highs and squeeze out the shorts.

Failure here would be very bad for the bulls as triple tops are very important spots where important decisions are made. A failed breakout should lead to a retest of the 2775.75 low, which should fail as well. Why? Because we'd be in a large C wave down whereas the A down was from the 3029.50 high to that 2775.75 low, so a drop from here that C wave should at least equal the 253.75 points down the A wave did. If you start at around 2930 and take off 25375 points you have about 2676.25... and that's an ugly drop!

Do I think it's going to play out? No. I think the bulls will gap up over the falling blue trendline of resistance tomorrow and make a run up toward the upper trendline of the rising purple channel. That's somewhere around th 2980 zone... give or take 10 points. In conclusion I think we'll chop around today in a much smaller range then the 46 points the wave 2 did, so maybe 10 points or so?

I further think this (likely) wave 4 of C up will end by the close today and that we'll gap up over the yellow falling trendline tomorrow for the wave 5 up of C up. I doubt if I'll play the wave 5 up as while I think it's got higher odds of working then a large C down starting, I'd just rather wait for a higher odds trade.  Have a blessed day.

The futures are up nicely this morning as the bulls woke back up last Friday. But there's a lot of overhead resistance waiting for them from a falling yellow trendline and horizontal orange trendline, as well as a rising blue trendline that starts at the December 26th, 2018 low and connects to the June 3rd, 2019 low. So I don't see it just blasting on up much higher today. In fact at the open the 60 minute chart will be quite overbought so at best the bulls hold this level all day into the close and then try to gap over this multiple resistance zone tomorrow. I really don't expect it to happen that easily for the bulls. Instead I suspect they will turn the ball back over to the bears tomorrow and we'll go back down again.

Just a guess of course, based on looking at the charts and all the resistance overhead. Plus the "possible" downside FP on the SPY from Friday as well as the "possible" upside FP's from last Wednesday that have been hit this premarket morning. One was for 292.46 and the other was 292.55, which are now fulfilled (premarket) with a current high of 292.65 around 7:37 am today. Of course it should be retested during normal trading hours as well, and I think it will be. So while I never know the timing of "when" any given FP or "possible" FP will be hit they are still something I watch closely whenever the market starts turning and going in that direction.

Since I feel the "possible" downside FP is real too, and the fact that the market will be overbought today with multiple overhead resistance levels layered above I have to think we will be going back down to this new "possible" FP from Friday at 3:51 pm of 284.71 at some point this week. If the Wednesday upside FP's took until today to get filled then that's 3 days out, so possibly we'll hit the downside FP in 3 days as well... or less? Hard too say about what the bulls will do up here this close to the two prior highs as triple tops aren't nearly as strong as double tops.

So it's possible I guess that they some how back down small today or tomorrow and then gap over the resistance zone Wednesday to run all the stops on the bears. Then the market rolls over and starts the drop toward the new FP into Thurs/Fri of this week. Or the bulls don't make it and just fail at the triple top today and start the down move tomorrow. Tough call for sure. Have a happy Monday.

Yesterday we saw what could have been called a wave 4 up and 5 down of C down, which was the large 800 point drop on the DOW the previous day. While Elliottwave isn't something I use for trading as waves can subdivide forever, or truncate short, it is still useful to paid attention to I think. I can see a nice ABC move up from the 8/5 low to the 8/8 high, and the another ABC down into yesterdays low.

The A part was from 8/8 to the low on 8/13, then that super fast squeeze up out of nowhere for the B wave, and the C down started later the next day on 8/14. There's a small wave 1 down and 2 up on the 13th, but the 14th produced that wave 3 down of C down, which I think ended yesterday with the wave 4 up and 5 down. That suggests we had an ABC up from 8/5 to 8/8 for a larger A up. The an ABC down into yesterday low for a larger B down. Next (again, from an EW point of view) should be a larger C up into next week.

We are likely in just the first wave 1 up of that larger C up right now. And I think that wave 1 up is going to subdivide into 5 smaller waves, whereas we had the smaller 1 up and 2 down yesterday, and are currently in the smaller 3 up inside 1 up of larger C up this premarket morning. Of course this wave 1 up of larger C up could only have 3 smaller waves inside it, and not 5, so keep that in mind too.

I'm 50/50 on how many waves are going to make up this firs wave 1 up of larger C up. The C waves and wave 3's in most all the cases will subdivide into 5 smaller waves but I've seen A waves and wave 1's only subdivide into 3 waves sometimes. So it's possible that this wave 1 up will end sometime today after the open and only have 3 smaller waves inside it. If so, then we'll likely see a pullback into the close today for the wave 2 down of larger C up. This move down should NOT take out the low yesterday if this wave count is correct.

A lower high on the MACD's should happen too. Basically I'd like to see a higher low on the price which will look like an inverted head and shoulders pattern on a small scale. This would setup a wave 3 up inside a larger C up for Monday. This would fool a lot of people I think, so I wouldn't be shocked if it plays out this way. Overhead resistance is the falling light green trendline and the falling yellow trendline.

A nice squeeze up into that yellow trendline on Monday would make a triple top it looks like. It would make the wave 3 up of C up too, and maybe throughout the day on Monday we see a tiny wave 4 down and wave 5 back up into the close to complete the larger C up? It might also push into Tuesday before ending as maybe it will push through the yellow falling trendline and the triple top for just long enough to run the stops on all the shorts... then reverse back down?

Bottomline here is that this larger ABC up from the 8/5 lows (which is an even bigger wave B up as wave A down is the move from the 7/29 high to that 8/5 low) could end early next week. The next leg down should be a very large drop as it will be an extra large C wave down I believe. This is all based on EW of course but I can see how MACD's and Histogram bars are rolling over on a weekly and daily chart now to support this wave count.

Plus we are going into the scary fall months of the year where the market is historically weak anyway. If this plays out then keep in mind that the extra large A wave down from the 3029.50 top to the 2775.75 low was 253.75 points, and therefore the C down will be at least that amount, or more. Have a great weekend.

WOW! Up 400-500 points on the DOW yesterday and now this morning we are back down 400 points... insane swings. But, when you take away the numbers and just look at the movement it's still a choppy sideways market from the August 9th low. On one hand you could say that the rise up from that low and sideways large moves up and down are making a bull flag, and on the other hand you could say that from the 7/29 high down to the 8/9 low that's the flag pole for a bear flag and the wild swings up and down are the flag, which looks like a rising channel or pennant flag.

Regardless of how you see it the bulls and bears are fighting hard in this wide zone for control of the next large move. I personally think it will be a large down move starting next week some time, but I was also hoping the bulls would rally up and put in a new all time high first to squeeze out the bears. However, it's possible that these wild swings up and down are doing just that... meaning squeezing the bears out and trapping bulls as well. I've been sitting on the sidelines here as these moves are just too hard to predict in advance for me and I don't want trapped on the wrong side.

So cash is the best option until next week when some clearer pattern appears. For today I'm speechless. I know I said on Monday that we should be in a choppy market this week but I honestly never thought we'd see swings so wide. But I guess that's normal before a large move happens. All I can say is that after this battle is won by the bulls or the bears the next large move should be a very scary one. Nothing else I can say here so have a great day and God bless.

Pretty deep down day yesterday but the moves these recent days seem to be large every day. I'm still not looking for a breakdown of the 8/5 recent low, or a breakout to new all time highs anytime this week. Next week though is a different story. Most other are looking for top of some kind early next week to take a short at for a move down to test that 8/5 low but so far that rally up has yet to start.

I'm still 50/50 on whether we make a new all time high on the coming rally or just a lower high. And while there's no guarantee that we'll even get the rally (we could have already seen the bounce high?) I don't see a high odds trade right now to play on either side. I'm not much of a day trader as you know. I prefer to wait until I get a trend move that will last for several days to even weeks.

So I miss a lot of moves... and I missed the drop yesterday. Friday just didn't show its' hand to me on where the market was going on Monday. But that's life in this tough world of trading. I could take more risks but I've found that when I have in the pass I seem to have a knack for shorting the bottom or buying the top... LOL.

Anyway, I (again) don't see much for today. There's no clear direction to me. It looks more bearish then bullish but it's also getting short term oversold and can turn back up at anytime. I felt the same way yesterday but the turn back up never came, which was why I never went long either as "feeling" one way isn't a good recipe for trading. I wait until I get more evidence that gives me a clean signal to go long or short. I'd take either trade, up or down.

I'm a bear at heart but money is money and if I get a strong buy signal in the next few days then I'll go long without hesitation. I suspect we are near one but it's not formed yet. Positive divergence needs to form and I'd like to see some kind of wave 1 up and wave 2 down that holds above the start of the wave 1 up... aka, a higher low or double bottom. I'm thinking we could see something setup by this Thursday or Friday but until it does I'm on the sidelines waiting for a strong opportunity. Have a great day and be sure to watch Oscar's video here as he covers the long term picture.

The futures are down some this morning but I guess that's to be expected after such a large rally yesterday. I was able to get out of my longs and pretty much breakeven for the week. It wasn't easy but patience paid off as we did indeed rally up to that possible FP of 292.74, which was about where the market stalled at and went mostly sideways the rest of the day. Now everyone is looking for another large drop to happen as the market has retraced about half the down move from the last week.

But I don't feel that way. Instead I think we are off to make new all time highs or at least challenge them into next week and the week after. August is a month that will put in tops for the year many times... especially when you have such a strong a powerful rally up from a low in the fall of the prior year. Which as you all know we have been rallying basically since the December 26th, 2018 low with only a few nice pullbacks along the way. So tend to think we still have another move up to a new high coming before this entire 9 month rally ends.

The move down to follow should be one very nasty drop, but first the newly short bears have to be put back to sleep, and that requires a move up to a higher high in my humble opinion. I'll end here and keep this update short. Tomorrow I turn 55 as I was born in the month of Leo and the year of the Dragon... hence the name of my site. I'm very thankful to be in good health and live in America. Have a great weekend. And remember that God loves you and he loves everyone (well, maybe not the deep state pedophiles... LOL).

What a nice recovery by the bulls yesterday as the bears dropped it hard early yesterday morning. This morning the bulls managed to hold the futures about flat to slightly up as I write this premarket report. Today is the best chance for the bulls to take this up if they choose to do so. But today might end up just being a pause day where the bulls go sideways to gather more strength for a move higher tomorrow.

As I type this update the futures are gaining more so we'll see if the bulls can keep this momentum going or not. There's a possible FP from Monday showing a 292.74 high on the SPY around 4:55 pm, but it might also be a late fill from the prior days close as the SPY ended last Friday at 292.62... pretty close to the FP level. So we'll just keep that level in mind should the bulls put on a nice rally up today. Wave count wise we could be starting a wave 3 up today with Tuesdays rally up being wave 1 and Wednesdays early drop being wave 2... suggesting wave 3 started the low yesterday and is continuing into this morning.

The other count is that the entire drop from the high a week ago (which was a nice ABC down) ended just the wave 3 inside the C down on Tuesday, then wave 4 up of C down into Wednesday, where wave 5 down double bottomed (SPY/SPX, not futures) later that morning and started just a wave 1 up from that low into this morning. That then leaves a wave 2 down that might come today or tomorrow and then wave 3 up Friday or next Monday.

I don't see any bearish counts right now as we've had a nice ABC down... with or without the possible subdivision for a wave 4 and 5 inside that C down. The bottom line here is that we should start moving up over the next few days to carve out a 5 wave up pattern, or worst case would be an ABC move up... which would (should) only make a lower high before another down move happens again. That's all I have for today. Good luck trading and God Bless.

Markets are down this morning, after a nice strong bounce yesterday. I don't think the bulls are done yet on this move up but there's a lot of resistance overhead so it might be a grind fest higher and not your typical gap up and squeeze move. So today might be a choppy sideways day with some downside and some upside but considering the depth of the recent drop over the past several days I don't see another big plunge coming anytime soon.

Bulls are fighters as we all know and at worst will just hold the market in place long enough for charts to become bullish again and then make a run higher. On a wave count we might have gotten a wave 1 up yesterday of some degree and will have a wave 2 down or sideways today... which leaves 3 up for tomorrow or Friday I guess. Just speculation at this point based on how fast and far the recent drop went, thus getting the market quite oversold on the short term. Bounces are a normal part of any drop as we all know, so we shouldn't be shocked if we retrace half the move down (or more) in the coming days. Not much else to add here so I'll just keep this update short and end it here. Have a great Wednesday.

The market took another dive after-hours yesterday with the DOW being down as much as 400 points, but this morning we see a reversal with it now up over 200 points. I'd say we have the makings of a 2-3 rally starting now. The depth of this move down took me by surprise as the FP on the SPY of 291.22, which was put out back in early July, was hit and slightly pierced at first but failed to produce a turn in the market like so many prior FP's have done.

It makes me wonder if those that control the stock market still have full control or not? For years I've been tracking these FP's and while I never know the "when" part on them being fulfilled, they are very accurate when they finally do get hit. I don't mean the small intraday FP's as many of them are just late fills on orders that some how got lost and never completed that trading day. You'll see that most of them point to the price level where the market opened that day, or closed the previous day. Real FP's are targets way away from any prior days levels, and sometimes take months to hit.

If this becomes the norm then it will prove without a doubt to me that Trump is not part of their plan, which I've never thought he was anyway. The elite satanists clearly hate him as they continue to attack him every chance they get. The create false flag events and blame it on Trump. So maybe the timing of him talking about more tariffs on China wasn't staged like all the other big news releases have been in the past?

Which would explain why the FP level failed to hold and produce a turn back up like all the prior FP's have done so well. It makes me wonder if the IWM upside FP is going to actually get fulfilled and put in the all time for this year? Of course I won't know until it's hit or not, and time-wise I think we have a month at the most for it to hit. The rally in the futures right now is likely the start of the last rally up in the market for this year.

Whether it makes a new all time high or not is unknown. I tend to think it must make one to put in negative divergences on the daily and weekly chart, and then a recession is likely to start. Only time will tell. I'm still long (underwater) and will hold until Friday to see if we get a strong rally up or not. I tend to think we'll see 2-3 days of a move up here and then another pullback. Will it be small and then back up, or another very large one is again... unknown. Happy Turnaround Tuesday.

Futures down big this morning, which wasn't something I was expecting. I have some longs that are going to be toast from the looks of things right now. There's a possible early morning FP around 8am today at 292.62, but that's really about where the close was on Friday so it's likely just a late fill and not a real FP. However, it's worth keeping in mind should we rally any today or tomorrow as it will be a point of interest for sure.

We are into another support zone area here in this 2885 level from a rising trendline that connects the December lows last year to the June lows of this year.  If there's ever a reason to bounce here then that trendline would be it.  There's also the even number level around 26,000 on the DOW and we are very close to that level as well this morning.  Failure here is really bad for the bulls would suggest that the bull market rally is over.

Pierces of that trendline are fine but it needs to recapture it asap.  The supports there are broken on a smaller scale (like the 2900 level) suggest a bull trend is still in place, but if this rising trendline breaks (and holds) then that tells me that a more serious move down is coming soon. That doesn't mean we can't rally some this week as of course there's always bounces in any down move. But serious damage would be done on a close below that rising trendline, as it would suggest the high has been put in for the year.  So it's time to be more cautious on expecting the typical bounces to happen all the time like they did in the past many months.  Let the bulls prove themselves here.

Since I'm stuck in some longs I'll just have to wait this out to see if we get any bounce or not? The goal now is to get out with less of a loss as a breakeven isn't looking good. I'm just glad I got the big win on the sell last week as otherwise this underwater long would have me sweating tears. Not much else to say this morning as this down move took me by surprise so I'll have to just wait and watch until something bullish appears. Have a great Monday.

Here's Oscar talking about the same trendline...

WOW! What a nice drop yesterday. I was quite surprised actually but happy that I never took any positions... especially not a long. I was kinda giving up on the bear case to some degree and lending more bullish then bearish, but not enough to put a bullish trade on... thank goodness. Ok, so what's next? Well, if that move down yesterday was some kind of wave A then we should be doing a wave B today, and possibly into tomorrow as well?

When I look back at other similar periods what I notice is that the B wave up usually puts in a green closing candle on its last day. So if we chop around today and close slightly red I'd tend to think that the B up is subdividing and that we only got the small a up and small b down out of the way, leaving the small c up to end the B wave for tomorrow. Then the C down would follow starting on Monday. But if they close today green I'd lend more toward the B up ending today and the C down tomorrow.

I'll be looking at the intraday movement to see if it subdivides into 3 smaller waves or not. One could argue that the intraday low yesterday was the end of the A down and the B up started with that rally up into around 3:30 before the last drop into the close. If that's the B wave then clearly it is subdividing and that first reaction bounce back up from the 3:00 pm low was the small a up, then the small b down into the close and today we are making the small c up... which could truncate short of the small a top at 2998.75, and that would be perfect in my opinion for the C down to start tomorrow.

So, from around 3020 down to 2958 we have 62 points. If the B up ends today around 3000 then the C down so go at least 62 points, which is 2938. But most C waves are larger then the A wave. Like 1.618% up to 2.618%, so if it's just 1.618% then that is about 100 points lower, and if 2.618% that's 162 points lower. To put is simply if we close today around 3000 (or put in an intraday high there) then we should drop 62 points, minimum, 100 points normally, or 162 points worst case.

I will be watching closely as I kinda think we are in a small c up of the B up and it needs to get close to the prior bounce high of 2998.75 for me to feel like the small c up is finished, which ends the B up and sets up the C down to start on Friday. If we chop around all day and don't do that rally up then again, it's likely that the small c up isn't finished and that it could extend into Friday. This could be a serious turning point the DOW never did make a new all time high like all the other indexes.

I'm still thinking we'll hit Oscar Carboni's upside target of 28,500-29,000 before the year ends so the bulls had better keep this coming C down to a minimum so they can rally back up for that target area. On the DOW the 26,000 area would probably be about equal to the 2900 zone on the SPX, which is the normal 1.618% ratio of A to C. It should be an interesting day for sure. I'll be looking for the 3000 area to be touched (or very close) but no close over it. On the DOW I'll be looking for the 27,000 level to hold the bulls back and become resistance just like 3000 on the SPX. Give me a "close" but not too close touch of those today, and a green close, and I'm a bear into Friday looking for that C down to start. Have a great day.

Futures are basically flat this Monday morning but if you look closer they seem to big in a rising wedge pattern now with a purple trendline of resistance overhead and orange trendline of support below. Since the market is still in a "waiting" mode for the FOMC meeting this coming Wednesday we might not see much movement today as this rising wedge doesn't come to a peak until tomorrow from the looks of it. I'd love to see it breakdown today but with the meeting still two days away I don't think there will be much action or volume to cause a breakdown, or breakout.

But if we stay in this rising wedge all day long (seems likely) the odds for a breakdown or breakout are pretty strong for Tuesday morning. I may look to take a trade going into Tuesday and will post it in the chatroom by the close today if I see this as likely to happen. As for the rest of this week I do think we'll see a "sell the news" event after the FOMC as clearly we've been going up in front of it (aka... "buy the rumor"). I'll get this update short as I don't see much else happening today. Have a great Monday.