Futures are down again this morning so I'm glad I waited on that long I was thinking about taking. But I suspect this is the last down move before a rally starts back up into next week, so it could be a buying opportunity. There's also an upside FP from 8:16 am this morning, so that should be hit at some point today I believe.  I don't expect a lot today on the upside but I'm certainly leaning toward today putting in the bottom and some kind of rally up happening.

Reading twitter yesterday one of the people I follow pointed out that the TRIN was at +2 on Wednesday and the last time that occurred was Christmas Eve, so a bottom is very likely near. Of course that doesn't mean we are going to rally up a 1000+ DOW points like the day after Christmas did, but it's signaling that a rally is coming. If not today then Monday, but with that early morning FP I'd have to think it will get started today.

Maybe it only puts in a DOJI on the daily candle but that bottoming tail should be enough to keep the market going back up next week. Some others think we could go back up to 2860... I don't know? But it's certainly possible to at least "double top" this past Mondays high. I pointed out in the chatroom yesterday about the "lack of" a negative divergence on the daily chart for the MACD's, so a slightly higher high in the market and lower high on the MACD's would create one... which is why I can't rule out a move up over Mondays high next week.

Will it be to 2860? Don't know but next week is the monthly options expiration week, and that's usually a bullish week. It was very consistent in the past but since the introduction of the weekly options it's not as strong of a pattern, but still possible. For those that used too follow Danny Riley of Mr. TopStep he always called it the "Thursday/Friday low before OPEX". This was a common pattern the market makers did whereas they would run the market down on the 2nd week of the month into a low and then ram it back up into the 3rd Friday to make all the puts they sold expire worthless.

But the addition of the weekly options in the last couple of years has skewed that pattern to where it works just sometimes and not "all the time" as in the past when there was only the monthly options available. However, they still have larger volume on the monthly options so it's still something to be aware of since we have been going down all week long during the week prior to that monthly expiration.

In any case, that's my thoughts for today. Have a great weekend. P.S. It's supposed to get up to 62 degrees this Sunday where I live and was only 38 degrees yesterday... but what do I wake up to this morning? Several inches of snow... LOL! Have a great one and God Bless you and your loved ones.

Looks like the chop I expected after the Monday drop is going to continue today as well. The market has been playing pin pong between the high and low put in on Monday but at some point soon one level or the other should break... preferably the low as it's hard for me to even think about going long up this high in the sky already. But if the bulls drifted down lower for several more days (closing down on each one) I'd start thinking that they were working off the massively overbought conditions and were planning to make another run higher again. I hope that's not the case though as I'd rather short this fat pig instead. But that requires some more chop I think with some positive closes too.

Basically we want to see the bulls make some type of ABC up pattern from the Monday low to put in a lower high and exhaust themselves while doing it. Or a sideways bear flag would work too... just chop again between the Monday low (a pierce is fine but nothing big) and Tuesday high, which was about a 50% up move of the entire drop on Monday. Looking back at the September 21st, 2018 high and drop it took until October 3rd (12 calendar days) before it finally broke-down hard and fell off a cliff. This past Monday was the 4th so 12 days forward is the 16th of March, and a Saturday.

Next week is the monthly options expiration week too. So if history repeats we could expand this zone a little lower to the downside and then run back up for a double top that following Monday the 18th (or Friday the 15th) and then drop big afterwards similar to the October 3rd top and drop. From an "manipulation" point of view this makes perfect sense as the monthly options expiration next Friday should have the most open interest and therefore the market makers will have the most reason to "pin it" where the most puts and calls expire worthless.

Therefore, thinking outside the box here and just looking at history for clues, we could drop one more time (like tomorrow or Monday) to make a C wave down, whereas Monday was the A down and we are in the choppy and sloppy B wave up now. That ABC down could be followed by another ABC up into next Friday for the options expiration pin. Then starting after the 18th the big drop happens. The first ABC down would be a larger A down, then the second ABC up would be a larger B up... and finally the larger C down would start after that. Wishing thinking, but possible.

So far, so good. The market is just chopping sideways for the most part as expected. How long will this last is the question of course. My guess is that it will end today and tomorrow we'll drop again. But I'd like to see it rally up a little more today first and close firmly green. Then it would look like a completed ABC move up from the low on Monday. The next move down isn't likely to be the big drop though as I fully expect it to be bought up as the "buy the dippers" come in looking at the pullback as a opportunity to go long.

There could be several of these drops and rips going into next week to fool bears and bulls alike. I tend to think the biggest drop won't start until after the monthly options expiration is over with next Friday. So the week starting on the 18th should be the big move if this market follows the previous patterns... and I think it will. I see no reason for SkyNet to make it easy this time around by just dropping hard from the first top. I fully expect it to do the dance up and down several times to trick both sides before the real move down starts.

So if we end this move up at the close today then tomorrow should be down, but if that's another one day drop like Monday it could end the first series of waves down as well and then another series of waves back up should appear going into next week. I'm not a Elliottwave expert but the market does move in waves, and I'm just trying to guess which ones will form before they happen to the best of my abilities. Good luck.

Finally! We got our first drop! Yesterdays pop and drop was what I've been looking for to happen. It's the sign that the big boys are unloading more shares faster as they know the next big correction is closer. You'll notice the volume picked up too in the SPY, so this tells me insiders (who have been selling small for several weeks now) know about when the market is going to drop hard and are trying to get out before it happens.

Today, tomorrow, Thursday and maybe Friday we should see the market try to float back up... but I suspect it will again be sold into. However, I don't think it will be big volume again like yesterday but more like what we've seen over the past several weeks. This may continue into next week too, if it follows prior patterns. It's really hard too pick the exact next day they will let the bottom fall out again but it's coming... the when part is the tough question.

I don't see any danger of it today, probably not tomorrow either. But Thursday forward I'd say the market is on borrowed time as it tries to make a higher high again. Failure isn't an option for the bulls as it will increase the odds greatly that another large drop will follow. The "when" part is always the hardest to figure out. I just try to guess by counting waves and looking at divergences the best I can.

So at best we'll see an ABC up with many or all of each of those waves subdividing into 3 or 5 wave patterns. Most of the time it's just the C wave that subdivides into 5 waves but the A does too every now and then. My best guess is that we top out by this Friday with a lower high (then yesterday) and next week starts the big drop. But, since next week is the monthly options expiration week there could be some tricky downs and back ups to "pin" the SPY at max pain for option writers.

Looking at previously patterns just now I see that after the first big drop (like yesterday) there was about 2-3 days of chop, then another large drop (this Friday?), then more chop the week of the monthly options expiration. After that (the 4th week of the month) is when larger drops happened. As for today I don't expect much... chop most likely. Tomorrow will probably be the same. Thursday and Friday is when things could get interesting. And for anyone having a hard time signing up for the free chatroom just email me directly and I'll manually set you up. Red (at) RedDragonLeo (dot) com.

This Monday morning the premarket session is up with a high so far of 2819.75 being hit last night. We still haven't seen any capitulation move up happen but we didn't see on at the low last Christmas either... so the old rules again seem to be changed as SkyNet runs the show without any real floor traders left at any exchange. With this higher high (then last week) there's not much to do again but wait. Every time the bulls make a higher high it's like they got another first down and will have the ball for a total of 4 downs now.

Again, I think we are close but it's hard too short this thing without first seeing some weakness... like a top, drop, and rally back up for a lower high (aka, a wave 1 down and 2 back up). I have no idea what the small wave count is as it seems to just keep subdividing, but the bigger picture is still an InterMediate Wave 1 up of Major Wave 3 up (again, using Tony's last wave count as discussed on Fridays update).

When we finally top and drop it should be a nice one. I think it will be timed to happen with some bad news on the political front... Mueller, Mueller, Mueller, Mueller, has anyone seen Mueller (really Bueller but you get the picture). Bears should get the wave 1 down out of the way as should as possible (like today would be great) and then the wave 2 back up into midweek... which then could (should) have them set up for a nasty wave 3 down whenever they find Bueller (LOL).

Kidding aside the market seems to always have bad news timed around big drops, so if it's not some Trump related news it will be something else. I'll post further updates in the free chatroom throughout the day if I see some setup appear (bearish hopefully and I certainly don't want to go long this far up and over extended). Have a great day.

The bulls are running hard this morning it seems with the futures up nicely. Are they going to make a higher high or lower one is the question. If they make a lower high then there's still some hope for the bears in the short term, as in next week. But if they make a higher high this bull market can drag out longer. How long? Wish I knew for sure but it will of course end when all the bears become bullish.

It certainly feels like we are close but I don't have any real numbers to back that up... and how extreme does the put to call ratio really need to be anyway before you can say that the bears have given up? I know I'm getting tired of trying to come up with something to say each morning on these updates as technicals are worthless and wave counts are just "best guesses", so I must be getting close to capitulating myself... LOL.

Fortunately though I'm not in any position so the only pain I'm suffering right now is that of "waiting" for some high odds setup to appear. With a red close on the DOW and SPX yesterday the bulls got a rest day to reboot, but this morning they are up nicely, which is too soon in my humble opinion to start another long sustaining rally. They should instead just wear themselves out again today if they close green and come back down again next week.

Of course this doesn't mean that they must make a lower high for this to happen. They could make a higher high too, but I don't think they can hold it unless they can pullback steady for 3-4 days in a row, and then rally hard. So NO, I don't think this is the next leg up in the market starting that will take us to 2900 or 3000 on the SPX. Maybe they reach the 2830-2860 area on this thrust but I don't see it holding.

There must be some multiple days of red closes to reset the overbought charts before a strong push up can hold. Otherwise it's just up a day down a day, etc..., which over time could indeed push up to much higher levels, but that's not the characteristics of a wave 3 up. Our now lost friend Tony Caldaro has us being in an Intermediate Wave 1 up (IM1) inside a Major Wave 3 up (M1). I'm trying to catch the top of this IM1 so I can ride the IM2 down and then go long for the IM3 of M3 up into the summer for the 3000+ rally high expected.

This IM2 should retrace a bare minimum of 23.6%, but more likely 38.2%... which if you did a rough calculation you'd get the following numbers. From the 2325 low up to the 2814 high you have 489 points so far. A pullback of 23.6% is 115 points down, or 2699, and 38.2% is 187 points, which is a move down to 2627. We hadn't had any pullback at all hardly since this rally up started.

So logic suggests (ha ha... logic, as if that really works in this rigged market) that we should not make a new all time high on this move up from the December low and should top out soon to end IM1 up of M3 up and then pullback for IM2 down of M3 up. So far we are up over the 78.6% retracement level on the DOW and the SPX, which again suggests there's not much more to go before a pullback starts. So bears, hang in there. We must be close. I refuse to believe we are off to a new all time high and beyond from this first rally wave up. A meaningful pullback will happen when we least expect it. Have a great weekend.

It certainly has been a choppy week so far, with the market really not going anywhere yet it seems. I'm not sure if it's bad or good but usually there's a time window where that if the bulls can go sideways long enough they can reset the very overbought charts to a point where they can get another thrust higher going. But a failure is certain death as then the bears will attack in full force. What is that time window you ask? It's flexible and not written in stone.

But I'd say this, if we drift down small again today and close red, then do it again on Friday and Monday I'd say the bulls will have won this battle at the SPX 2800 zone, DOW 26,000 and Nasdaq 7600 areas. But if there's more upside with some green closes, but not too much, the bears will have stood their ground and will have a great chance of taking the market down next week. You want to see the bulls continue to thrust up each day and the bears to "hold the line" and push them back (small at first).

If the bulls stop trying here and just fall back to a lower level it will result in them getting enough rest to push back up hard next week instead of tiring out from exhaustion by try each day to move up and failing. If we compared it to war then this battle at Gettysburg is one where the Confederate troops (the bears) want to keep the Union troops (the bulls) attacking and fighting every day, trying to push forward and gain ground. Don't let them rest by pulling back some as they could get reinvigorated by some speech their leader tells them and come out strong and over take the bears on the next attack.

In football this would be the half time speech by their coach. Bears don't want this to make it to half time. They want the clock running and no time outs for the bulls. That's the only way they are going to get the ball back in their hands. So if you are a bear you don't want to see some slow steady pullback today, tomorrow and Monday happen that puts in small red closes each day. This would be the bulls "resting" before another attack.

Ok, for the short term the only clue I have for today is that the SPY did put in an early low this premarket morning at 278.30, and I find it common that those lows (or highes) are retested during the normal trading hours. From there it's anyone's guess? We are in a topping mode this week... or a resting mode before another thrust higher. Have a great day.

The market still seems to be in slow motion doing a whole lot of nothing these past few days. It is showing some signs of weakness but that could also be the bulls resting before another move up... hard too know which? But when I look at other charts, like the daily on the SPX, I see clear evidence that a pullback is near. The MACD's have fallen from a peak just over 20 back in mid-January to almost zero right now, so the bulls are running out of steam here for sure.

It doesn't mean the high is "in" and that we are going to new lows, as there's NO negative divergence yet formed on that daily chart... which suggests this first move down will be bought back up at some point for a second up move attempt. It's at that point where we'll see if the bottom was in last December or not. For now though I still think we are about ready to start that pullback... maybe today or tomorrow, not sure? But within days is likely.

However, I need to keep this in the back of my mind as many times in the past when there's been some multiple days of sideways action before a drop there is usually some fake out move up at the last minute to take out all the stops of those shorting. SkyNet doesn't want anyone to catch the move and when you do several days of chop the bears have plenty of time to take a short position.

This makes me very wary of the Monday high being "it" before the pullback starts. It's not something written in stone that there has too be a fast "pop and drop" to squeeze out the bears, but it's certainly a common thing. So keep your eyes open for such a fake out move. Maybe it doesn't happen and instead we just rollover tomorrow or Friday but it's important to be aware of so you don't get shaken out (if you are short already?).

Most likely there will be some news event timed perfectly with the drop, as well as the "possible" fast move up. Some fake news out that gets quickly retracted is possible... which might cause the squeeze up at first and then back down when it's not true. We've seen that before as I remember last year some news reporter stated something that quickly got reversed. Can't remember what it was but it did move the market.

Anyway, that's all I have for now. Look for one more move up is what I'm thinking. Maybe it's just a double top from Monday or a fast pierce through? Technically it should be a slightly lower high to make a wave 2 up with the current drop being the wave 1 down, but guessing on what wave count we are in is just that... guessing. Have a great day.

Finally... the bulls are looking a little tired. Yesterdays early morning peak high now is the challenge for the bulls as while it would be normal for today to show a little weakness Wednesday will be the "do or die" time for the bulls to run back up and take out that high on Monday. Failure to do so will likely lead to the start of a nice pullback later this week. But if the high is in already then the drop in the afternoon into this morning would be the first wave down... call it the A wave of some degree, which should lead to a B wave up later today or Wednesday.

This should setup Thursday/Friday for a nice drop from the C wave down, if this unfolds like that. The key will be to NOT see a higher high for the B wave up into a possible top tomorrow. A double top is fine... maybe even a slight pierce higher by a few cents as some EW Charists say B wave's can go slightly higher and still be valid. In any case today should rollover again from the early high and drop yesterday and into early this morning as this move up from the premarket lows looks very much like a bear flag to me.

So I'd expect it to drop one more time today just to finish this possible A wave down. Then back up into Wednesday for that B wave, which could even happen into the close today and rollover instead on Wednesday. So if all goes well for the bears we'll see one more move up for a lower high or double top either later today or into Wednesday. From there I'd be looking for a nice pullback to begin. The bottom line here is that any down move today should be reversed back up either later today or tomorrow (possibly into Thursday).

Here we go again... more grinding higher. Friday was looking good for the bears briefly with that late day drop but the bulls reversed it all back up by the close. I don't see any clear setups forming yet for the bears so this bull can keep grinding for awhile I guess. Now that 2800 has be hit on the SPX and 26,000 on the DOW as well as 7500 on the Nasdaq I have to think the talking heads on TV will be out in full force bragging about it and telling everyone how bullish it is right now. For the bears to have any shot at a move back down the retail sheep must finally throw in the towel and become bulls. Once the finally go long the market a top will be in. Where that is at I wish I knew.

For now I'm just waiting patiently to see some kind of signs of capitulation from the bears. Until then no meaning pullback is likely to start. Hopefully they throw in the towel today and give up. However, it's more common that once a big "even number" level is hit there will be a move up into the 20's on it before a turn back down. Like 2820 or so on the SPX or 7520 on the Nasdaq. On the DOW it would be something like 26,200 or so. This isn't some rule written in stone but it's a common thing I've noticed that happens over the years. The other common thing would be to fall about 20 points shy, like the 2780's and 2880's for the SPX. You'll noticed we did a lot of chop in the 2780's recently before pushing through. So the next resistance is around the 2820's I believe. Have a great day.

Some small cracks in the market showed up yesterday but it still doesn't look ready to drop hard yet. Today it's probably going to play the ol' "pin game" to make the most options expire worthless. Since it's around the 278 SPY level right now before the open I'd have to guess that some where between 277.50 and 278.50 would be the pin spot for the close today. The market is very tricky at this point as if it goes sideways long enough it could actually work off enough of the overbought conditions to continue higher. Yeah, I know you bears don't want to here that but it's possible.

Ideally though we go up some more today to get closer (but not go into) that 2800 level on the SPX and the 26,000 level on the DOW. Both of those even numbers seem to be very tough resistance for the bulls right now. A final move up near them might just be the exhaustion point needed for a nice drop to start next week. It's still not an easy call here as every time you think it's ready to drop it fools you with some small pullback one day that get reversed back up the next day. Yesterday and this morning is a perfect example. Today will likely be boring as SkyNet holds the market in place all day with a bias to the upside... hopefully (if you want a good short at least).

I don't have anything else to add. We are at the spot and time period where a turn should happen. I've been expecting today or yesterday to be the top and so far it's looking like it will be on schedule. But a move down to put in another red close on the SPX and DOW would change that as it would be more consolidating by the bulls in an attempt to work off the overbought conditions.

I'll post more updates in the chatroom throughout the day if needed, but that's the forecast for today. A move up to just under 2800 and 26,000 with green closes would have a high odds short going into next week. Have a great weekend. P.S. If the bulls broke-through those resistance levels and closed above them today I would stand pat and not short as resistance could become support. I'd wait until next week to see if it was a fake out pierce through or if it holds.

Over night the SPY popped higher to 279.63 to hit and pierce the FP, but the futures are now back down below it now. So I don't know if a hit afterhours qualifies as being "fulfilled" or not? Maybe they run it up after the open again? Just don't know? It's 50/50 on whether or not the FP is "fulfilled" at this point. If so then we should start our first smaller wave 1 down today and back up on Friday for the wave 2 up... thus setting up next week for an ugly move down to start. I'll add more updates in the chatroom if needed but that's about all I have to add this morning.

Not much to add this morning. I don't expect any big movement in front of the 2pm FOMC today. Yesterday SkyNet teased us by rallying up close to the FP but not close enough to call it "fulfilled". Same thing on the downside "possible" FP as we rallied right after the open and did not hit it either. Tough call on whether it's a late fill or a real FP, but the upside one is real for sure. My guess is that it will be hit tomorrow. But whenever it's hit I think the top is "in" and the next big move down will start right afterwards. I'll end this update there as nothing more can really be added. Best of luck to us all.

Yesterdays pullback was small but might have been enough to complete a tiny wave 4 down and allow a tiny wave 5 up to end Minute Wave 5 up and all the waves up from the 12/26 low. I'm still not sure on that as we might have some surprise drop today out of nowhere to a slightly lower low, which then would end the tiny wave 4 down. On a 5 minute chart of the I can see an (abc) A down on the 13th from the opening high to around 11:30 am, then a B up into 3:30 pm that day, and a C down into yesterdays early morning low around 9:45 am. That ABC could (should) be enough to end the tiny wave 4 down.

If that's the case then we are in the tiny wave 5 up now and it should end today or next Tuesday I'd think (closed on the Monday). This tiny wave 5 will of course subdivide into even smaller waves as well. Normally it will have 5 waves inside it too, but trying to count all these super short waves is very tough... especially since I'm not an EW expert. I just like to add them to the mix with technical s I follow too, as while they aren't very accurate at future forecasting they do help when combined with many other methods of predicting the market.

The FOMC is next Wednesday and while it's just a rehash of the January meeting the market still acts choppy in front of it with the hope that Fed Chairman Powell will add something new to the comments from the old meeting. From what I've noticed in the past a top is put in either a few days in front of a meeting or a few days after one, but the week itself is full of choppy swings up and down that don't really go anywhere.

This is to make sure the Fed's don't get blamed for the market selling off after something they said I guess? They want to be the hero and not the Villain... LOL. This meeting is on the 3rd week of the month too, which is normally the most bullish week due to the monthly options expiration and the manipulation "pinning" the market makers do. So I still think a top is near and likely to appear next week, but that could change if we dropped today and Tuesday, and well as Wednesday going into the 2pm minutes reading of the old meeting.

I'm not expecting that to happen as it looks more likely that we'll go up into the FOMC but those guys are very sneaky and might have some new rabbit to pull out of their hat and spark another 100+ point SPX rally into the end of the month. I doubt it, but it's possible. My thoughts are that we top out today or next Tuesday and then start a series of wave 1's down and 2's up all of next week that just produce some lower high from early in the week to the end of it, but not some huge drop. The 4th week of the month is where I expect a nasty pullback to start.

Anyway, for today I don't have too much to add. Looks like it's opening up positive and still continuing to form that tiny wave 5 up. Should end today or early next week I'd think. Where? Don't know? Maybe it grinds up to 2800 or more? Or just stalls shy of it a few points? It's not so much about the point value for me as it is to just catch the end of the move so I can get positioned for the next turn (down is this coming case). Have a great day.

Ok gang, yesterday produced a nice move up, which others label as a wave 3 inside a Minute Wave 5 up. This morning we see some move continuation of that wave 3, which I discussed in the chatroom as possible. The only thing that would have made me think otherwise would have been if the wave 4 down would have happened midday and the wave 5 up back into the close. But that didn't happen as there was next to nothing for any pullbacks throughout the day. That "to me" put the odds about equal this morning of a gap up to continue the wave 3 or a gap down for the wave 4 to start. So I stayed in cash and didn't risk it as odds where just not favored for either scenario.

It's hard to time the end of a wave 3 and then successfully play the wave 4 as many times it will be a short lived one as trapped people in the wave 3 will want to exit on that wave 4 and those that missed the wave 3 will want to enter. For this reason I find wave 4's very risky to trade. But, with that said, wave 2's and wave 4's tend to do the opposite (as I discussed in the chatroom yesterday), whereas if you have a weak wave 2 (we did) the wave 4 will "usually" be strong... and the opposite is true if the wave 2 was strong the wave 4 would be weak.

This isn't written in stone as some guarantee as I've seen two weak waves happen as well, but I must say I don't recall seeing two strong ones? Anyway, it's just the mind of the traders that causes this opposite reaction. In this case, which is a bull move up, traders missed the tiny sideways pullback on Monday as being a wave 2 pullback where they could get long. And worst, some of them short it. Now those short are trapped from yesterdays wave 3 up and those that missed it want it.

So if the computer that runs the market (I call it SkyNet from the Terminator movies, which I nicknamed it that some 7,8 or 9 years ago) has enough trapped short it usually leads to a tiny wave 4 as well and then an exhaustion wave 5 up to end it all. But if too many bulls bought the wave 3 up and it overruns the bears shorting it SkyNet will want to shake them out... hence a stronger, deeper wave 4 pullback. It's our job as traders to "guess" on what it happening with the trapped shorts and new bulls. From looking at the hour to hour report (posted in my chatroom by a member) that shows the "calls" and "puts" being bought yesterday I have to point out that it was heavy on the call side.

This (to me) suggests we'll have a bigger wave 4 pullback to shake them out before a wave 5 up starts. And since the market is set to gap up again here at the open my "best guess" is that it will not hold past the 11:30 am EST close in Europe, and will start the wave 4 pullback at some point today. The best time for this pullback to start would be the open of course, as if the bears can't attack early while there is good volume it's not likely they will be able to push it down in the midday section when volume dries up. How far will this wave 4 down go? I don't know?

Again, it "should" be deeper then the tiny wave 2 down but that's NOT a guarantee as sometimes I've seen both waves be weak. However, if it's a decent pullback be aware that those trapped bears will likely flip to becoming bulls expecting another stronger wave up to follow. Plus those bulls that missed the start of the wave 3 up will go long on the wave 4 pullback expecting another strong move up too. This why you'll see many 5th waves fail and either double top or truncate short as they have too many bulls on board. Just keep that in mind if you decide to go long on this pullback coming today or tomorrow. Best of luck to you.

The futures are up nicely this morning in what appears to be part of a 5th wave, which should end the rally up from the 12/26 low when finished. It's still looking good for a top this week with Wednesday the most likely day and Thursday the second most likely day. If the move up from the low on Friday was a small wave 1 up then yesterdays pullback was the wave 2 down and today we are in the wave 3 up. So another small pullback for a wave 4 down and then one more thrust higher for the wave 5 up should complete this "Minute Wave 5" (credit goes to Tony Caldaro for the labeling of it).

Targets on the upside are obviously the prior high to make a double top and a few points past it. So 2750's is still possible but I'm not so much focused on the point level as catching the exact day it tops... which again I think will be this Wednesday or Thursday. As always this is a best guess based on the facts I currently have and the market cooperating with me... mean I need to see these short day to day moves continue to unfold in readable wave patterns. SkyNet has a tendency to through you a curve ball when you least expect it, which it this case would be an early top and drop with not many bears catching it. But assuming "it" doesn't the expected top is 1-2 days away.

Not much more to add that hasn't already been covered several times in morning updates and extra updates through out the day in the chatroom. We are near an important top that is expected to drop back some Fibonacci level between the December 26th low and the coming high. Needless to say it's a big drop coming. Have a great day and best of luck to us all in catching the bear.

Yesterday was a nice start for the coming down turn in the market but I don't think the bulls are done just yet. I suspect we'll go back up again soon for another attempt at a higher high. It's not looking too likely today from the looks of the futures so I'd have to think we'll see that move back up start on Monday and/or into Tuesday. This morning the futures seem to retesting the lows from yesterday but haven't broken them so far... and if they don't then possibly (on the short term) the bottom yesterday started some A wave up and the B down (for a higher low then the low yesterday) might carve out today.

That would leave the C up for the weekend and into Monday. What is the larger wave of this ABC you ask? Tough question but from the high earlier this week down to the low yesterday I count make a case for that being a completed 3 wave move down (ABC) or even a 5 wave move (tough to really figure out?), but it looks complete or almost complete. Meaning that if it was just a 3 wave move down then the rally yesterday might have been the 4th wave up and "if" we make a lower low today we'd have the 5th wave down to end it.

So the pattern is either complete or very close to completion. Now I'm not an EW expert but just try to track the simple 3 and 5 wave patterns. Tony Caldaro would be the person to follow on the larger count, which I believe he has this move down as a wave 4 (the entire 3 or 5 wave move I mean). So, when it ends (either yesterday or today with one more slightly lower low) a wave 5 up should start. I suspect it has already ended with the low yesterday but that's just a "best guess".

So I'm thinking we'll start the next series of waves up, which usually have 5 smaller waves inside a 5th wave, and that it will end into Monday or Tuesday of next week. From there a larger drop should start. Since it's the monthly options expiration week it should be tricky, like down into Wed/Thurs for the first wave 1 (of some larger degree) and back up for the wave 2 into Friday... which could almost go as high as the top expected on this 5th wave up coming next Mon/Tue, and that would fool a lot of traders into thinking the following week would be bullish.

However, from a wave count the top would have been put in on Mon/Tue of next week and lower high on Friday would only be a wave 2 up.... leaving a wave 3 down for the following week. This would be a nice trick by SkyNet in my opinion. It's all just speculation right now so let's just focus on today, which again I think is going to be weak most all of the day with a chance of a lower low happening, but I don't think it will be by much if it happens at all. Today should be the carving out process of the bottom of the wave 4 down so that the wave 5 up can start and end into early next week. That's all I have for today. Have a blessed weekend everyone.