Yesterdays passport code was a dud it seems as nothing much happened. I'm not expecting much today either. The bottom for that 2 day pullback is likely in with the lows yesterday. That doesn't mean we are off to the races on the upside again as we could just as easily chop around for several more days. There seems to be to many bulls looking for 3050-3100 to be hit where they can flip and become bears to short it. And there also seems to be to much support below to allow a big drop.

It's almost like everyone has their position already and they aren't buying anymore. They seem to be holding long waiting on that next big push up. The bears seem to be on the sidelines doing nothing... also waiting for higher prices to short at. So how do you get the market to go up more if all the buyers are long already and there's not many bears to squeeze? Only a news related event in my opinion would trigger a fast move up.

Basically I don't see much action for today, most likely sideways to slightly up with a chance that we could pullback to the pre-market low around 298.78 on the SPY, but that's just a "maybe" and not something I want to try and trade. The upside is probably limited as well as the 300 level has the most calls parked at it, so expiring there or slightly below makes the most sense. My guess is a pin between 299 and 300 today. Have a great weekend.

Well, I guess that passport is a dud as so far there's nothing going on in the futures, which are basically flat. The prior passport code opened the day with a limit down move in the futures, so unless some tweet or some other negative news bomb shell is put out during normal market hours I'll have to chalk this one up as a non-event.

Volume yesterday wasn't very large so that's another clue to suggest this passport code won't play out. But, from a technical point of view the market is still quite overbought and suggests this move down isn't finished. Possibly it pauses today with a small green close or maybe it continues down a little more... hard too say? The overnight low was 2974.50 on the futures, so we should at least re-test that level at some point today.

From past experience of watching the market do its dance I've noticed that if there's any overnight low and the market wants to go higher it will drop down early in the morning to hit that low and then go back up the rest of the day. Many times it happened right at the opening first 5 minutes, but more commonly within about the first 30 minutes. Nothing written in stone here but something to watch out for I think.

I'll be rooting for more time to pass with a slow sideways grind up, a small one, but up a little never the less. Then late in the day I'd want to see it hit the overnight low and keep on going lower in the close today. I've seen that happen as well, whereas the overnight low isn't some important support level but simply an overnight low... nothing more, nothing less. So when going down late in the day that early print holds little value and the market can just keep on going south like that print wasn't even there.

That's what I'll be looking for today, a hit of the early morning low print at 2974.50, which if hit early on I'll likely exit my shorts and go to cash to wait on the bounce expected afterwards to end later in the day or maybe tomorrow... who knows? But if that print isn't hit early on then I'd expect it to get hit and possibly taken out late in the day going into the close. If so, I'll hold short again. I'm disappointed on passport code not playing out but not all of them do, such is life.

I don't see any reason to be bullish here as the market is still quite overbought. If they chop sideways for 2-3 more days then I'd start looking bullish again as I'd said it was the bulls resting before another run higher again. I'd prefer a little more on the downside of course as a move down into the low 2900's would be ideal for Tony Caldaro's "Minute Wave 2" down. Maybe it's a short pullback... who knows? But we should find out in the next 2-3 days I believe. Happy Trading.

So far this morning the market is acting kinda like you'd expect... a whole lot of nothing as it waits on more information about the China deal. Trump tweeted “a long way to go” yesterday when talking about the deal and the markets dropped a little in fear of the unknown. I don't know what they have planned but if the market closes down a little today then my thoughts are that they plan to tank it on Thursday and blame it on this deal.

There's even a possibility that it will turn into a flash crash, but if it does it's a strong buy at the low close tomorrow I believe as whatever negative news they put out to cause the drop will be reversed after hours to cause a huge bear squeeze back up on Friday. This isn't a guarantee of course but I'll be looking for a small red close today on the DOW and SPX, but mainly the DOW as it secretly leads the market. If we get it then I think we'll drop hard on Thursday to run stops on the bulls and get everyone super bearish at the bottom to only then turn it back up hard and fast on Friday.  (But if we don't get the red close (on the DOW) today then the plans have changed and more time is needed to trigger the next buy or sell).

Basically, if this plays out like I suspect (hope, dream... meaning red close today) then tomorrow could be like August 24th, 2015... which you know was a 1 day limit down drop and stop run on the bulls that got completely reverse afterwards. I have no way of guaranteeing any such drop as I can't see the future. But odds are much higher for this happening tomorrow then any other day this year as we have a passport code for Thursday from Spiderman. So the cards are all lined up but will it happen? Only time will tell. Happy Wednesday.

The futures are about flat this morning. The market looks tired here as everyone is turning bullish now it seems. Everywhere I look people are calling for much higher levels... including myself. But I think it's getting close to a pullback in the next few days due to the bulls getting exhausted up here at these levels. I do think we are going higher in the medium term but short term a pullback is overdue and much needed.

Will it start today? Don't know but I did take a small short at the close yesterday, so I'm hoping it does. If we do drop today (A wave) then I'd want Wednesday to have a small bounce back up (a B wave), which then sets up Thursday for a nice drop. All this is short term and after the pullback is done we should go back up. But right now I'm looking for a pullback to start today.

If it doesn't happen and instead we trade sideways all day then that would be the bulls resting to consolidate before another push higher. Several days of resting would prevent the pullback I'm looking for and frustrate both bulls and bears alike. There's always a fine line about how much time passes during this consolidation period as if too much time goes by without that breakout move higher the bears will take control and pull it back down. It's kinda like having a time out in a game of football with the bulls having the ball.

It's a rest period for them, which if used properly they can advance the ball further down the field. But if they take too much time they might get a penalty and have to turn over the ball to the bears. So 2-4 days of sideways movement should be about the max for the bulls before a breakout must happen. If they go 4-6 days the odds will greatly shift toward a failure and the bears taking control. Also, too many days closing green or red in a row usually results in a turn over.

I like to follow the DOW for this as it's the secret leader of the market. Yesterday it closed up 27.13 points and that's now the 5th day in a row it closed green. It's getting into that time period where it needs to pullback and put in a red close to reset this pattern. If it doesn't do this and instead closes green again today and maybe tomorrow too, or even Thursday as well, then it's asking for trouble as when it finally ends the streak a larger pullback will likely happen.

The bulls should (and usually do) pause and put in small pullbacks from time to time so they can continue higher. Going straight up for umpteen days in a row is a euphoria type move and almost always results in a large down move afterwards. Multi-day rallies and a few days rest are the best way to keep going up.

So lets see if the bulls allow a pullback here to start or not. If they don't and instead grind higher today, and do it again tomorrow they will be setting themselves up for a large drop to start as early as this Friday. But the bulls are usually pretty smart so lets see if they listen here and rest for a days.

P.S. Don't forget that we have the passport code this Thursday from Spiderman. Most of the dates pass by with nothing happening so I'm not getting my hopes up for this one but if we have an A wave down today and B up tomorrow then maybe we see a nice pullback after all on this one? Have a great day.

The futures are up a little bit this morning but they are looking tired. However, there's still likely more upside coming before any decent pullback. The big 3000 level on the SPX/ES and 27,000 on the DOW has been cleared cleanly now and the bulls won't likely give it back up very soon. If I had to guess I'd say we'll top out by Wednesday, and then we'll have a pullback. Also, I'm still looking for 3040-3070 at the top of this rally (not the final top this year). It's a big range but I'll just be looking more toward Wednesdays close to see if it makes it up there or not, and whatever level it's at will be close enough (hopefully... LOL). On the short term, as in today, the futures look tired but I would still expect them to go up throughout the day. It just might be a slow grind versus a powerful squeeze type move. Not much else to add this morning so I'll keep it short and end here. Have a great day.

The DOW finally broke through the 27,000 level and the ES is back over 3000 again. The SPX cash pierced through it too but closed just a hair under it. It's looking like the market will clear it nicely this morning and continue up higher. With new highs made there's not much overhead to put up resistance for the bulls. Trying to pick the end of this move, regardless of what wave count you label it, is very tough.

But it certainly isn't ready to give up it seems. The bulls just keep on going with this 5th wave, which some others are calling a wave 3 of so degree. I can't agrue either way as I'm not an expert in Elliottwave. For now it's just best to "not fight the trend"... which is still up right now. With today being the last day of the week and the various indexes over big round numbers I have to think today will hold those levels and/or go up more so as to close out the week with a positive outlook for the sheep.

Milestone levels reached will probably be talked about all over the media with ridiculous calls for even higher levels. Sure, over time we'll see them but once everyone gets bullish a top will be near. I think people will start thinking that way next week if the market can go up in another squeeze move. The bulls just need to hit the stops the bears have placed in this 3000-3020 area, and then they are off to 3040-3070 in a jiffy.

The bears only chance here is to push the DOW back under 27,000 and the ES under 3000 today. Failure to do this will be bad for the bears as at some point the bulls are going to do another squeeze up. Will it happen today or Monday? I don't know? But sideways trading is consolidation by the bulls, and usually results in another move up. One could also see a "Cup and Handle" pattern in the charts too, and that is also a bullish pattern.

I don't have any thoughts about today as it could either grind up or go sideways, but I don't see much downside as that would lose those big round levels that the market worked so hard to capture this week. I don't see any high odds shorts setting up yet as the bulls still have control. An exhaustion rally up into that 3040-3070 area today, Monday or anytimne soon would have me looking again for a short. I'm certainly not saying that we can't rollover here but odds don't favor it. Have a great weekend and God Bless.

Very exciting day yesterday as the market squeezes the crap out the bears and then retraces back down half the move up. The swings up and down look like makings of a short term top forming to me. Overall there's much more upside in the cards but I think we'll have a nice pullback first and then go back up again later this year. Everyone seems just too bullish right now I think.

From a wave count perspective yesterdays move up could have ended a move up that started at the 2728 low on June 3rd, which suggests a pullback of some Fibonacci level is coming soon. If today pulls back and closes red then I'd lean toward one more day up on Friday, but if the market goes mostly sideways, but can't quite reach another new all time high, and closes green today then I think Friday will start the next down move.

It might not be much in the beginning as there will be dip buyers stepping in for sure, which is where the wave's 1 down and 2 up are created. Then at some point next week a wave 3 down happens to shake out those bulls. After that we should go back up again and run for another new all time high. Will we get it? I don't know? We should, but I don't know the future unfortunately. I just suspect a pullback is coming very soon, like starting tomorrow, versus a breakout to 3040-3070 like a lot of others are looking for right now.

Maybe it's not as super bullish as I think but it's definitely not very bearish, and yeah... a lack of bears doesn't mean the market has to fall but unless there's someone to squeeze the only way to get it higher is new buying, and I don't see that happening at these levels. More then likely people are neutral here with some bullish and few bearish. That spells trouble for the bulls as they need buyers or bears to squeeze. A pullback will lure in shorts and then you can squeeze them later on, or a sideways choppy rangebound market for a week or two will also lure in bears (usually... it might also lure in bulls that see it as a bull flag pattern making), so that's possible as well.

By far though the best way to get the market to go higher is to drop it back to get more bears on board so they can be squeezed. So let's see the bulls can get another push higher going today or if it's time for them to rest some and let the bears have some fun. I'm thinking it's bear time as the only bullet left to cause another squeeze would be a deal with China and I don't see Trump doing that until after the Fed's actually lower rates at the next meeting this July 31st like they hinted they would with yesterdays morning comment by Powell that sparked the short squeeze up in the first place.

The timing of the release of information couldn't be better scripted in a Hollywood movie as that was about the only thing that could get the bulls through the super tough resistance zone around the 3000 level. It worked... so what's the next news drop that will create the next big move up I wonder? I don't think there is any, which is why I think a pullback is coming first and then a well timed tweet from Trump about the tariffs and up the market will go again. We'll see I guess but I'm betting we will see the low 2900's before the 3040-3070 area. Good luck as always.

I was a little surprised yesterday when the market broke upward through that falling trendline of resistance as I kinda thought that would happen after the FOMC today. But the rally up has faded this morning so I can only guess that SkyNet didn't want to lose the 2960's as possibly it's more important to the bulls then expected. As far as wave counts, it's getting hard to figure out now. We might have completed the ABC move down at the low yesterday and now we are in a up move of some degree. Whether it's a wave 5 up or just a B wave up (with the ABC down being some A wave) and C down yet to come is just unknown. It's times like this when things get tricky and hard to figure out.

I really don't care if it goes up or down as I'd be more then happy to play either move, but this chop is hard to trade, so I don't. Overall though we know the market is rigged for the bulls so trying to see and catch a good short is very hard... which is why I'd be just as happy (actually, I'd be happier) to see and catch a long setup. Lot's of people are talking about a megaphone pattern that the market is in on a daily chart, which points to a blow off move up. I don't know if it's that easy or not but I do think SPX wants 3000 and it's only hit 2995 while the ES Future has hit 3006 already. Plus Amazon seems to want to hit 2000 again, (written before 8:30 am).

And just as I'm typing the futures spike higher and turn green. I guess some economic news must have been released? I remember in the old days everyone focused on the Non-Farm Payroll Report as it would move the market all the time. If I recall that came out on Thursday or Friday at 8:30 am. So maybe this wasn't some economic news released but something said positive by the Fed or a new Trump Tweet? Whatever it was the market loved it as the squeeze is on now. I don't expect today's close to setup any high odds trade as I think we need to get past this FOMC crap and let the market settle down for a few days to see its' real intentions. So maybe by the end of this week it will show its' hand? Best of luck trading.

I have to do so things this morning so I'm writing this daily update early as I won't likely make it back by the open. We are very close to a pullback in my opinion. I'd like to see a sideways day with light volume and a small green close. A nice "doji" daily candle would be ideal I think. If we instead rally up too much over 3000 on the SPX Cash (hit 2995 on Friday as a high) then I'd start thinking another squeeze up for awhile longer is going to take place.

If the bears can limit the strength today and still allow a green close on at least the DOW, but SPX preferably too, then I'd expect the pullback to start on Tuesday. But if we get over about 15 on the SPX and over 80 points on the DOW I'd stand pat and do nothing as it could setup another push higher to squeeze the next level of shorts. Basically I'm trying to find the end of this 5th wave up, which the 1st wave started at the 2728 low. If we get the "slightly green" close today without going up too much then I'd say the wave 5 up has high odds of it being completed and ABC pattern down starting.

The move down could be any Fibonacci Level, but the most common would be from 38.2%, 50%, or 61.2%, and that would be measured from the high of whatever tomorrow (not more then about 3010 max) down to the 2728 start of the entire 5 wave move up. Rough guess would be in the 2850-2900 area, and time frame should be 2-3 weeks. After that it's back up again with more new all time highs expected. But I'll worry about that after first catching this move down first. I'll be back as soon as possible today an in the room for sure by close, as that's when I'd make the decision to short or not. Happy trading.

Hope everyone had a great holiday yesterday. Today I expect light volume as many traders will likely be taking today off as well. The futures are down some, which is to be expected I guess with the exhaustion move up yesterday to finally make all time new highs on DOW of 26,966 (nice triple 6's there... top signal?). I don't have much to add today as it's looking like any sell setups we had are going to be pushed out into next week. The DOW making a new all time high caused this. So I'll keep it short and just wish everyone a happy extended holiday.

P.S. If the market pulls back too far today it will likely kill any sell setups for next week and allow another big push higher... like maybe even 3100 on the SPX? Hard too say for sure but too deep of a drop today is bad for the bigger pictures for the bears.

The futures are set to open slight up this morning. Don't forget that it's half day today due to the market being closed tomorrow for the 4th of July holiday. So light volume is very likely until the 1pm EST close. If we get any move down of significance it would shock me. Most likely a nothing day. However, we get get a new FP on the SPY yesterday. It was a downside one for 291.21, which is likely the target on the next move down.

If we drop to that level today or Friday I'd call it a C wave down where the A down was started at the open on Monday to the late day low where the B up started and continued into the close yesterday. After that ABC down completes I'd expect another move up. How big will determine whether it a 5th wave up to a new all time (again for the SPX, and/or the first time for the DOW) or just a lower high that setups another ABC series of waves down. If lower higher then we could start a really nice move down next week.

Basically this first ABC series down wouldn't be a wave 4 of some degree then (everyone I follow and read are expecting a 5th wave up to 3000+, so I'm sure they are calling this move down a wave 4). Instead, the first ABC series would just be a larger A wave, and once finished (at the 291.21 FP?) a larger B up would happen. Then another ABC series down next week for the larger C down. This would mean that the high is already in on this past Monday at the gap up open.

So everyone expecting 3000+ would miss the drop and be forced to chase it down, and we all know that SkyNet never makes it easy for traders to get short or long at the best spot. So if the DOW fails to make a new all time high on the next move up, then the SPX should fail to take out Mondays high too, and certainly not reach 3000+, and that's exactly what I'd do if I were SkyNet. All just speculation at this point. Really not much else to say about today.

But Friday could be interesting, especially if we get that move down to the FP level and start a move back up for that larger B into the close Friday or early next week. Things "could" get interesting for sure next week. A move down into mid-July could go deeper then most expect. I'll play whatever is given to me, so if the market wants to go up in a 5th wave first I'm completely fine with that too. It's a flip of coin now, but that downside FP has high odds of getting hit soon to complete an ABC down move of some degree. Have a great holiday tomorrow.

Exciting day yesterday... for the bears I mean. That opening pop that got faded all day long and didn't turn back up until around 3pm is quite bearish in my view. If the bulls really were going to run this pig up to 3000+ on the SPX the pullback should have been much smaller. In fact they should have held the opening range and went sideways all day to make a bull flag.

But the bears attacked and pushed the bulls back down nicely. The DOW never did make a new all time high while the SPX already has, which is a divergence between the two indexes... and it's bearish, not bullish. Over time I'm sure the DOW will make a new high but right now it's struggling and that tells me a nice pullback is more likely to happen soon versus a breakout rally. There's also the gap on the ES Futures that came within 25 cents of getting filled on that pullback.

Gaps on the SPX happen all the time but on the futures they are rare, and they always get filled at some point. Just the fact that the futures dropped back to that gap fill area and failed to fill it tells me we will be going back down at some point soon. There was a possible FP on the SPY afterhours yesterday showing a low of 293.29, so if that gets hit today, tomorrow or Friday the gap on the ES will also get filled. As for today, it's anyone's guess.

The futures are mostly flat right now so I'm not sure what the plan is today... up or down? Should be light volume though as we are getting close to the holiday and the market should go to sleep. Hopefully it floats up today so a nice sell can setup in a day or two. A move down to that FP could kill the sell as that would be a wave C down with yesterdays drop the wave A down and the rally into the close a wave B up. So if you are a bear you'll want to root for a few days of chop to upward so a bigger drop (then the FP) can setup... maybe as early as tomorrow?

But ideally on Friday would be perfect. I just don't want to see that FP level hit today as that might be too low and end the 3 wave move down, which then could setup another move up that could take out the all time high on the DOW. Preferably I'd like for that to hold, but we'll see. Anyway, no opinion on today. I'm just rooting for the FP NOT to be hit until tomorrow as this B up needs more time I feel. Have a great Tuesday.

I was looking at going long last Friday at the close when the market was drifting down slowly into 3:30 pm, and then BAM, out of no where it rips higher that final 30 minutes into the close. I missed it and wasn't going to chase it as I didn't know the reason for the move at the time and therefore didn't trust it. Of course it was related the G20 I'm sure now, so those people that bought it are sure happy this morning I'm sure. Very frustrating to have missed that move!

For today I really don't expect much but some sideways action with "maybe" a little more upside. This whole week is likely to be a boring one with Thursday being closed for the 4th of July. My eyes will be focused on the DOW as it has yet to make a new all time high like the SPX did previously.

If it does take it out this week then the bears are toast for quite a long time. Not saying there won't be pullbacks but I am saying that the market will be in some strong wave 3 rally up and the summer grind is likely to kill the last bear. But if the bears can stop the DOW from making a new all time high then they have a chance at a nice move down.

Personally I think the bulls will win, but maybe not on this attempt. Possibly it plays out like what Tony Caldaro's group is looking for... which is SPX 3002 to complete what they call "Minute Wave 1" up inside "Minor Wave 3" up? Elliottwave is tough in predicting the future moves but Tony was probably the best at it, and had the highest accuracy of anyone I have seen. That's what they are looking for, which should (possibly?) put the DOW at a new all time high by a little. And that could be the plan by SkyNet... to pierce the all time high so the super bullish wave count can be locked in? Then pullback some Fibonacci level of 23.6% or 38.2% for "Minute Wave 2" down. On the SPX that would be from from the 2728 low up to that possible 3002 high, which is 274 point.

A 23.6% pullback would be 64 points or a pullback to 2937 or so... which seems too small to me, but anything is possible in a bull market I guess? The 38.2% level would be 104 points down, which would be 2897 or so on the SPX. Now that sounds more likely to me as it's a pierce of 2900, which should get the bears super excited thinking the world was ending... only to see it turn back up and start a wave 3 of 3 to stupid levels.

These are just speculation right now but if we get up to that 3000+ zone that's where we'd want to see the move up end and start this pullback.  With this week being a holiday shorten week it wouldn't surprise me to see the drop start Wednesday or Friday and end by early next week. Lately (the last several years that I've noticed) "they" seem to do this pullbacks (controlled of course) during holiday periods when many traders are taking time off. So that what I'll be looking for this week, a top for Minute Wave 1 and the start of Minute Wave 2 down. Happy Monday.

In yesterdays update I suggested that we ended a large A wave down and started a larger B wave up, that I would consider shorting at the close, but that that I would change my mind if the rally up was to strong or if we dropped to a lower low and close red. Needless to say I did not take a short. In fact I was thinking about a long as I expect the larger B wave is still yet to come. What yesterday looked more like was a small wave 4 up at the open and a small wave 5 down into the close.

This meant that the small wave 1 down and 2 up happened during Mondays chop and then the small wave 3 down occurred on Tuesday where the largest part of this move happened. All 5 of these waves I'm calling a large A down. I keep it simple with Elliottwave as I'm not an expert and don't really believe in it too much for forecasting the future. But short term wave patterns "sometimes" can be forecast-ed when you add in technical analysis, news events (like the G20 this Friday/Saturday), seasonal factors, support and resistance, put to call ratio, volume, and other things too. So while that early pop higher yesterday could have started the larger B wave up it fade way too quickly and just drifted down the rest of the day into the close.

If it were a true larger B wave up starting I just felt that the gap up would pullback small and then turn back up to go even higher the rest of the day. Instead it acted like a small wave 4 up inside large A down, as it got exhausted quickly and then the small wave 5 down took over the rest of the day. But that 5th wave didn't have much momentum to the downside so it just barely made a lower low. Bottom line here is that I don't think the larger B up has started yet. And I suspect it will start today. The ES Futures were up about 20 points after-hours from the 2914 low at the close yesterday. They rolled over about 5:30 am and dropped to "almost" hit a double bottom from that low, but make a higher one and are back up in the green again right now.

I suspect that we'll start that larger B up today and that it will divide into 3 smaller waves, of which the small A up and B down should happened today, then the small C up all day on Friday. It makes sense from a "fear" stand point to as we are still one day away from the G20 and traders don't know the outcome, so a few bulls nimble at longs today and then sell later, which makes the small A up and small B down. Something positive, or "not" negative is released sometime tomorrow and the bulls buy for the small C up. Sometimes it's not what is said, but more that the event is over with that's important.

Traders just don't like the UN-certainty that these meeting can bring, but once past they get back to trading what they see. My guess is that nothing new comes out of the meeting but it's enough to get that smaller C up to happen all day Friday. Then over the weekend the news becomes realized as negative for the market and we start a large C wave down on Monday. Anyway, for today I'm slightly bullish as I think the low was put in yesterday but I don't see a breakout to the upside until tomorrow. I think chop is more likely today to make that small A up and small B down. Good Luck and my God Bless you today and everyday.

We finally got around move down yesterday and since it closed near the lows I decided to close out my short and go to cash to see if there was a bounce today. So far, so good as the futures are indeed up some here before the open. If we are going down in an ABC pattern then the low yesterday completed the A down and the rally today starts the B up. With the G20 meeting this Friday and Saturday I'm really not sure how long this B up will last?

Remember that the usual pattern is to sell in front of events and meetings that make investors nervous as some change out of the meeting could effect the market. That's the case with this meeting, so I'd be surprised if this B up last into Thursday, and certainly not Friday. Anything is possible but I think it ends today by the close and the C down starts afterwards. Just speculation of course, as EW counting is best done afterwards (and useless for trading) and always a "best guess" when looking forward into the future. But that's the wave count that makes sense with all the other known factors included.

The market is very overbought short term on the daily and needed a pullback like this. Plus we are at double top areas on most all of the indexes (not the Russell), and there the fear factor in front of the G20, then there's the low put to call ratio, where everyone became too bullish and bought way more calls on the SPY then puts. So there's many reasons to support the Elliottwave count of a ABC pattern move down in play. If it plays out and we are near the expected end of the C down, then is where it will get tricky.

From there we won't know of the next move up will take us to new all time highs or just another lower high. But I suspect the outcome of the G20 will give us some great clues to the strength of the rally that follows. That's next week though, and we haven't even made it past this week... so back to the present. My thoughts are that today will end the B wave up and that's we are likely in a ABC move down. So I'll look to take another short probably at the close today. What would change my mind is too strong of a rally up, or another drop to a lower low today and a red close.

I want to see it close green and not too much further north then 10-15 points (SPX/ES). I also don't want to see too much weakness today as that would negate the B up as then it could just be a wave 4 up of that A down and the weakness (drop back toward the low) could be the wave 5 down to end the A wave today, and not yesterday like I currently think happened. So if we drop too much I will start suspecting that the A down didn't finish yesterday, which then further suggests the B up hasn't yet started. That's what I'll be focused on. Good luck and Happy Hump Day.

While the SPX and DOW went mostly sideways all day yesterday the Russell was quite weak and dropped nicely. Is it foretelling us what's to come? It certainly could be as inter-index divergences do happen at tops and bottoms. The Russell never even got close to it's prior all time high in this last big rally up from the early June low, so that's something to pay attention to as if the overall market was about to start a new bull run to 3000+ on the SPX and 27,000+ on the DOW then the Russell would be right there in-sync with the others to.

But that's not the case so odds favor the bears here in the coming days to take the market back down some to shake out the bulls and lure in some bears for another rally attempt later next month or so. There could be several attempts at breaking 3000+ on the SPX in the coming months if the pullback is weak. But a deep enough pullback should get enough bears short to squeeze to 3000 and beyond by the end of the year, as well as make a new all time high on the DOW, which hasn't happened yet... another reason to "not believe this rally", and to be cautious as a pullback is much more likely.

As for today it's starting off flat and might stay that way all day just like yesterday, which I'm sure is due to the market waiting on the G20 meeting to see the outcome about tariff's, which is this Friday and Saturday. Personally I don't think traders will keep going sideways that long as I expect a move one way or the other prior to the meeting, and I think it will be down. When fear of the unknown is in a traders mind the logical thing to do is to sell, which is exactly what I think will happen before the meeting. Will it start today, tomorrow or Thursday... I don't know? But I took a small short position yesterday and will look for another one today and/or tomorrow if more sideways action happens. We'll see, but for now I'm bearish going into the end of this week. Today though I'm neutral. However, on IWM I'm bullish... just for today though. Have a great Tuesday.

Futures are up a little this morning but not much, especially when compared to all the big gap up opens and runs from last week. The G20 is this week so we could have some volatility, and considering how high the market is at right now I have to think we'll see some downside action. The bears really need to attack hard as this is the last week of the month and commonly the weakest, so they have some edge on the bulls right now.

If I were them I'd start with a down move today, nothing big, but something to get the wave counts in their favor. They need a series of wave 1's down and 2's up to line up a nice layered wave 3 down of some degree. I'm not an Elliottwave expert as I don't think it has much use in forecasting the future. It's better for looking at the past, but when combined with other indicators and methods one can use it to see what is coming soon, but you just don't know the "when" part with EW as wave counts can extend and subdivide and have alternate counts, blah, blah, blah.

So when I talk about wave counts I'm just projecting out into the future what needs (not always, but most of the time) to happen to setup a big sell signal. It's not that the market obeys EW rules but it's that waves up and down are used to shake out traders on both sides. Sometimes it's easy to shake them out and maybe only one series of up's and down's are needed. Other times SkyNet might do a series 3 or 4 times to shake them out... which in EW terms it would be called "subdividing" waves.

I don't even try to predict how many but just look at the levels the market is at along with the technicals, to see if it's ready to take a dive or not. Right now the SPX has made a new all time high, but the DOW hasn't, nor has the Russell and the Nasdaq. So if the bears want to take this market south this week they need to keep these indexes from breaking out like the SPX, and especially the DOW as it really leads the market.

They also need to start shaking out some bulls and tricking some early bears... aka, the up and down series needs to start. Just get a wave 1 down today bears and try to close it slightly red, then up tomorrow and do another series intraday, followed by a final green close on Wednesday for a lower high and then we could just see a big drop follow. As for today, I don't see any clear direction. Just have to wait until it unfolds unfortunately. Welcome to another new week.

P.S. Overall I think this week will be a down one, just not sure when it will start? Dropping 50-100 SPX points is what I'd expect to see by this Friday.

Everyone keep in mind that the SPY went ex-dividend today so it's lower by that amount (usually a little over a point) to adjust for that, so it's not a mistake. Ok, for the futures this morning we see them down about 10 points so nothing big and is really normal after such a huge 2 day short squeeze. I don't see anything setting up on the bullish or bearish front for the close today. I expect it to be a slow day with limited downside and limited upside. Since it's Quad Witching for this expiration there could be some a little more swings up and down then most expiration's but again, I don't think it will be huge... nothing like yesterday. Next week though I do think we'll see nice trade setup, and odds favor a short, not a long (but a long is possible for late in the week). Today though should be a boring one, so I'll keep this update short and end it here. Have a great weekend.