Yesterday we saw a lot of ups and downs several times through out the day, which tricked me out of my tiny short position unfortunately. Now this morning we are having the down move I was looking for and I missed it... SkyNet sucks. LOL. But all is not lost as there should be a move back up today too. This move down is just in the early stages of forming and will still have some swings in it before a big drop happens.

Meaning there should be another move up to short again. So I'll patiently watch and wait. I don't really have much more to add this morning. I'll have to see what happens through out the day and post updates in the chatroom. Overall though I don't see today as "the day" that it falls off a cliff. There should be more days of swings up and down as dip buyers continue to step in... until they get crushed.

On the short term though a rally back up today that makes a lower high then yesterday would (should) qualify as a wave 2 (or B) bounce and another move down should follow (a 3 wave or C). Still though that move might end fast and have dip buyers push it back up into early next week, where another opportunity for a short should setup... and it should be a bigger one, like the one I'm looking for. Have a great day and may God bless you.

Looking at the SPY daily chart we can clearly see that we've now went up to the 200 day moving average. We're not quite there as an exact hit would be at 273.92 and we hit a high yesterday of 273.44 on it, so maybe they squeak it up a little more today to tag it but I wouldn't count on it. The market is about flat this morning but up from the premarket lows at 4 am EST, which had a drop down to around 272.19, which was 2724.50 on the ES Futures.

There were also some possible FP's after the close around 273.28 and 273.29 on the SPY, so my thinking is that upside area will be hit early this morning and then we'll roll back over to drop back down later in the day to hit the premarket lows. It's a common thing I've noticed for premarket highs and lows to be tagged throughout the normal trading hours.

It's not every time of course, nor guaranteed, but considering how close we are to a top and a likely pullback I have to expect some small up's and down's before a drop as dip buyers keep going buying. It might be as simple as a move up into the 11:30 am EST close of the European market and then a float back down into the close? Hard too say for sure? Maybe the float up is already over-with at the open and we start back down from there?

That's possible too, but I still get the feeling there will be some small strength after the open before going down again. My thinking is that this first pullback (not just down to the 4am lows) that's coming will trick a lot of bears as it should bottom quickly and then reverse back up into early next week for a slightly higher high then the current high yesterday. There's a lot of support in the 2700 area on the ES Futures so possibly that's the downside target?

I don't know for sure but I'm just thinking outside the box here, and that thinking tells me SkyNet is going to tease the bears on this first pullback and then run it back up early next week. So a drop to 2700 (or slightly lower) might get them all excited and wanting to short heavily, but this first drop should be short lived. From the looks of things we could see it by this Friday I believe. So don't get too excited on the short side just yet. Take it day by day and grab profits quickly as this bull isn't done yet I think. Good Luck as always.

The bulls continue to grind higher inch by inch as the bears wait patiently for them to tire out. I myself am not doing anything until I see a good bearish setup appear... or bullish setup, but that's not likely without a good pullback. Time is the most tiring thing for the bears setting by waiting to pounce and the bulls have do a great job of extending the "time window" for the top of this move to frustrate the bears immensely.

What I think will happen is a tricky surprise drop one day this week that gets fully retraced back up but fails to make a higher high. It would trick both bulls and bears I think as bears will likely miss the first part of the drop and will chase it down. Then when it hits one of the many support levels lover the bulls that missed the entire rally up will pounce and go long expecting 2800+ to be next. But the rally up should fail and just make a slightly lower high to tease the bulls into thinking a strong move is just getting started, and this double top should scare the bears out of their shorts too. If I were SkyNet this is the move I'd play out between now and next week.

Then the drop that follows that lower high should go down hard toward the 12/26 low to lure in the most bears and panic the bulls out. But I do not think there will be a lower low put in... a higher low is more likely. From that low a very powerful rally up into the summer should start. I'm forecasting out too far here I know, but since there's not much I can say about today's expected action I thought I'd take the time to speculate on "what would SkyNet do", as we all know this market is trickier then the devil himself.

For the short term I'm still waiting on a sell to setup, which I think needs to go higher... maybe up to the 2730-2740 zone? In the end it's just a "feel" or best guess for taking that short. As always, I'll add new up to date information in the chatroom as the each day progresses. These past few days have been boring but all bull market are boring. It's just the nature of things I guess. Have a great Tuesday.

Futures are as flat as a pancake this morning with little clues as to the direction today. So I'll have to just remain without an opinion this premarket morning and give the market some time throughout the day to give me some clues to where it wants to go. What would I like you happen you ask? Well, I'd prefer the bulls run it up again to the 2720-2730 zone to finish up a third wave (or C?) so I could short it for any expect move down of 80-100 SPX points. It could be more if it's a C wave up from the 12/26 low, which would complete the entire ABC up rally... aka, a large B wave. But most likely this rally will last well into the spring/summer and keep dividing into smaller waves.

So I'm thinking we are a wave 3 up since 1/3/19 (where it started) and inside that wave 3 it is likely breaking into 5 smaller waves. I think we are in the 3rd wave up inside that wave 3, so this 80-100 point drop will likely just be a wave 4 down inside 3 up, which should be followed by a wave 5 up inside a 3 up... and that wave will likely extend into early March before it tops out.

Where is anyone's guess so I won't speculate on that until we get to it. Right now let's just focus on trying to catch this short and exit at the right area. On another note, if anyone is having trouble getting into signed up for the chatroom just email me directly and I'll manually set you up. Red (at) RedDragonLeo (dot) com.

Nothing new to add today that hasn't already been covered. We are waiting on this bull to tire out and stop. The grind looks to be continuing this early premarket morning but not as strong as yesterday, so a top is near. Many are looking for early next week and their target ranges are 2700 up to 2740, which we are in that range already. I guess it will take some surprise news event to get it topped out and reversed. Funny how many times we've seen such releases of news right at critical turning points. You'd almost have to believe in miracles to think that the news is so well aligned... or conspiracy? Nah, it's got to be just a lot of coincidences doesn't it? I'll let you be the judge on that one. Anyway, that's all for now. I'll do new updates throughout the day in the free chatroom if needed. Just a waiting game for now. Have a great weekend.

So far it's looking like Scenario number 3 is playing out (referring yesterdays post)... aka, "The Meat Grinder". However, there's one very important part of it that must be met to avoid a bearish setup that would drop to the market pretty nicely later this week if this part isn't fixed. What is it you ask? Simple, the bulls need to get out of the "making lower highs" zone as it sets up a series of wave 1's down and 2's up, which eventually leads to a nasty wave 3 down (or C wave). Here's another conundrum for the bulls, there's tons of resistance in that 2720-2730 zone that everyone talks about.

Therefore even if the bulls squeak out a higher high today or tomorrow their upside is really limited. Don't get me wrong as a move up into that 2700+ area would squeeze out a lot of bears but I just don't think they can continue this sideways action much longer without breaking down hard or busting up small. Previously I thought that the bulls could do this chop crap for several weeks, like out into the second week of February even... but now I'm changing my mind. I just don't see that possible now.

A move up over 2700 to squeeze out some bears or a breakdown is very near. I'm not sure what is going to happen today as it's quite mixed on the charts but if today is a "pause" day (meaning weakness and sideways action but closing up slightly), then tomorrow should be a nice up day as yesterday was a nice down day... aka, the wave 1 down with tomorrow being some wave 2 up and today completing the wave 1 down and/or starting the wave 2 up.

Now, if we go up tomorrow and make another lower high then last Friday (which was a lower high then Tuesday of that week) then my guess is that we'll start a wave 3 down on Thursday. If on the other hand the bulls pull off a fast move up over both prior highs where they squeeze out the bears then the wave count would change of course. Then I'd call the sideways action from last Tuesdays high to yesterdays low some kind of wave 4 pennant with the breakout over that high on Wednesday a final 5th wave up that started at the 12/26 low last year. It could fall shy of 2700 or reach the max resistance zone of 2720-2730... don't know?

But if we have a pause day today (green close) and another up day tomorrow, which either produces a lower high then last Tuesday and last Friday (which setups a wave 3 down on Thursday), or a higher high (which completes a final 5th wave up from 12/26) we will have a great short setup going into Thursday. What can change that? Well, if we drop again hard today (like to 2600 or a pierce below) then I'd think the sideways action from last Tuesday's high was indeed a wave 4 down and the drop today would likely end it. Then a long drawn out wave 5 up could start and I'd guess at that point that it would subdivide into 5 smaller waves up and eventually take out that 2720-2730 zone in the coming weeks.

The reason I'd guess that the 5th wave up would subdivide is because a drop to 2600 or slightly lower would reset the short term overbought charts and allow the bulls to get a new start again, whereas if they are trapped inside this sideways trading zone that they are current in, and try to launch a 5th wave up from it, I think they will not be able to get much traction and it will just be a one wave pattern that ends short inside of subdividing.

Think of it like a bull trapped inside a tight pen. He can hit the gate to try and get out with limited force because he can't get a run at it. But take him outside the pen in a big area and allow him to get a run at some gate (gate equals big resistance zone) and his force generated from getting a run at it and his weight will probably tear the gate completely down.

That's what I'm thinking here on some 5th wave up. Do it inside the pen and upside is limited, but drop first (2600 or low) and then make another run up and suddenly that resistance isn't so tough anymore. Anyway, if you are a bear then root for a pause day with a slightly green close and then a nice rally tomorrow for another lower high, or even a pierce through both recent highs for a stop run. Either one will likely end this up move from 12/26 and allow a nice drop of 50% or more to start on Thursday.

I hope everyone had a great weekend. For me it was a little boring as it's still cold outside and there wasn't much to do around the house (not that I'm "into" cleaning as Laura does that... LOL). But I did get to think a little about the market and catch up on reading others who are good a forecasting to help fill in the missing pieces of anything I might miss. I have to think outside the box as if everyone is looking for the same thing I know that SkyNet won't make it happen the way they are expecting it too.

So I've come up with 3 possible scenario's for what I think is coming next. Scenario ONE is the favorite among many others. It's a simple upside target in the 2720-2730 SPX area for the top of this wave up from the 12/26 low, which then another drop happens. Some see a new "lower low" and another a "higher low", but that's the target high and that's my focus for now on that scenario.

Scenario TWO is one I've been thinking about, and it's where the market goes up slightly today and tomorrow with both days closing higher but failing to hit the target zone (again, that's 2720-2730), and maybe even failing to breakthrough 2700. From that area the large B wave up from the 12/26 low ends and a move down starts (again, for a "lower low" or "higher low").

Scenario THREE is where we drop some today and close down small then back up and down and up and down and up and down for all of this week and into next week too... without gaining much ground at all. It's the sideways chop pattern where both bulls and bears get frustrated because it won't top out in the 2720-2730 zone, nor breakdown hard and start the next big drop. This could also be called the "Meat Grinder Scenario".

Ok, so with 3 choices which one do I favor you ask? Number 3 is the answer. Why? Because that "Meat Grinder" pattern shows up when the big boys aren't hitting the panic button and dumping every long and getting short but are unloading some longs slowly. They sell small and the market drops small. The retail sheep buy the dip. This repeats for several weeks while they unload their longs. Then some fake news is released at just the perfect time to cause a fast and short lived "Short Squeeze" up to that 2720-2730 zone so all the bears that wouldn't give up during the multi-week chop finally get taken out. Then the high is in for the rally up from the 12/26 low and the market starts to drop.

This could after the monthly options is over for the month of February. That's the 15th as that's the third Friday of that month. So we could see a lot of chop for several weeks if this scenario plays out. I do not know which one will be correct but that's my "best hunch" as it would hurt the most and SkyNet loves to punish bulls and bears both. That's all I have for now. Let's watch and see I guess. Good luck trading.

The futures are up decently this morning after doing mostly chop yesterday. The bulls did a great job of holding on yesterday and not giving up too much ground. There's an "inverted head and shoulders" pattern on the the chart that I forgot to mention yesterday, and it looks like it might play out today. I was hoping for one more drop to the lower trendline in the falling green channel but the bulls wouldn't allow it.  I guess we are off to 2700-2720 now as that sideways action we've had over the past few days appears to be finished. This suggest it was a wave 4 of some degree and we are starting the 5th wave up now.

Bulls will need to take out the prior high today I think or risk another drop and continuation of the wave 4 down. Meaning that while the wave 4 down looks complete it could morph into an ABC pattern where we only seen the A wave down so far (the part inside the falling channel) and we are in the B up now... which leaves a C down (likely target is 2590-2600) to complete the wave 4 down.

This would certainly be a tricky move by SkyNet as everything appears to be finished on that wave 4 down right now and I'd guess most will see this rally up as the 5th wave... which it could be?  If that high from last week is taken out then I too think it's a 5th wave. But if it fails then it would be a double top and another drop should follow, which again suggests the wave 4 isn't yet finished and is subdividing.

On a bigger picture we are close to finishing this rally up from the 12/26 low and a big drop is likely coming soon... like starting next week. Will it be the drop that takes out the December low? I don't know? We only have a FP for 245.29 on the SPY for a target, and that could be all the market gives us... meaning no lower low. Again, we'll worry about that when we get there. For today though I'll just be watching closely around the double top zone to see if this subdivides into an ABC wave 4 down or if this really is the final wave 5 up. Have a great weekend.

Ok, the market appears to be in some kind of tiny wave 4 down. It's a choppy one with bounces up and down to shake out both sides, and it "may" have already bottomed? Not sure yet? It also appears to be making a bull flag as shown with the two green lines that form the flag part and a falling channel. So if the market can drop one more time to tag the low trendline of that channel I'd guess that the next move up would breakout of it and make a run for 2700+ for the tiny wave 5 up.

Once done (probably next week some time during earnings) the entire rally up from the 12/26/18 low should be complete. It's some kind of B wave I believe so the move down to follow it will be the start of a C wave. But, there's also a chance that the entire move up is just a wave 4 of the big A down from the all time high last year and the next drop will only be the 5th wave of that A down... and then a B wave up into the summer will start. Since we don't know which is correct we just need to focus on catching the moves inside it the best we can.

For now I think we have one more drop in this bull flag that should touch the lower part of it around 2590-2600, which might happen today or tomorrow. After this week ends though we should see that final rally up into next week for the earnings, and it should end the big move up from the 12/26 low. Now, we have a FP from earlier this month of 245.28 SPY and that will be my focus going forward into February as the most likely downside target before a turn. When it comes to FP's the short term "intraday" ones don't always market turning points but the bigger one's usually do. So when we hit that downside level I would expect it to turn back up. The hard part will be figuring out if it's just a short lived bounce or if that drop put in the bottom for many weeks to come.

But that's out in the future so we'll cross that bridge when we get there. For today and tomorrow I'm just looking for that last drop inside the fall channel before an earnings rally next week. If we breakout of the channel today and hold it then we might not see that drop happen. I'll only play what is given to me... meaning, no drop equals no long into next week. And shorting here (or going long) is like flipping a coin with 50/50 odds of getting the direction correct. But I won't say it's really that bad of odds, as I do favor a drop more then a breakout here... just not enough to go heavy short on it. A small "gambler" short... yeah. Anyway, have a great day.

I'm feeling a whole lot better today gang as yesterday I was quite sick and didn't do a morning update post. My runny nose seems to have stopped mostly now, but it's so sore it looks like Rudolph the Red Nose Reindeer. The headache and fever is gone, and the sore throat is mostly gone. Overall I'm a ton better today then yesterday. Sucks getting so sick as I rarely do but I guess the extremely cold weather kicked my but from going inside and outside too much over the last few days.

Anyway, the market did indeed turn down on the 22nd but I missed it looking for one more "slightly" higher high. However, there's always another opportunity around the corner. Yesterday morning around 9:08 am there's a possible FP showing 266.42 on the SPY, so that could be the rally high for today or tomorrow? Hard to say if it's a real FP or not as it's too close to the Friday afterhours close.

And after yesterday's nice drop the bulls don't usually make it so easy as to "just short the next days bounce" as we'd all like them to do. We might see a few days of chop between Fridays high and yesterdays low before the next leg down happens. Plus there's also some evidence to suggest that drop was just a wave 4 down of some degree and a 5th wave up to a slightly higher high is still coming. I'm just going to remain neutral today to see what unfolds. Overall I'm bearish but I would not be surprised to see some chop today before anything clear appears.

If we go up all day and make a lower high then yesterday (high odds that we won't take out yesterdays high) then we could be in a tiny B wave up with that first drop being the A wave down, which would setup a tiny C wave down into Thursday. That would be the ideal setup I think as then they could do another move up on Friday and into the close on Monday to finish off that possible 5th with some high this is slight lower or slightly higher then Friday.

Many 5th waves fail so a lower high would not be out of the normal. The next few days should be super interesting as we could be setting up for a very large drop. It just shouldn't be super easy to spot as SkyNet loves to trick both sides into being on the wrong side just before a big move.

Today and tomorrow should play out as a tiny B up and tiny C down and that should complete a 4th wave down. From there though it could get tricky going into early next week. I'm still thinking we are headed down hard in the coming weeks but timing the exact top of the last day before the big drop isn't going to be easy. So let's just take it day by day and root for a nice green close today with the market grinding up most all day long. Give me that and the tiny B up should be complete and allow a tiny C down tomorrow to take out yesterdays low. Good luck.

The futures are up again this morning after a late day pop and drop yesterday occurred on some fake news report (put out to cause a bear squeeze I'm sure) about the government shutdown ended. We should hit the FP today on the SPY from the looks of things and there's a new one that showed up this premarket morning around 8:00am EST showing a high of 266.55 on the SPY, which is a bit higher then the 264.85 FP from the 9th of this month that I have. Since this one is so close it could be hit today, or next Tuesday at the latest (closed on Monday for a holiday).

Usually those kind of prints that are so close to the current price act like a magnet and pull the cash market up (or down) to hit that level, so today has been odds I'd think. Regardless of whether that's a real FP or not it's pretty clear that the 264.85 FP from the 9th is a real one as it's within spitting distance of being fulfilled right now. Next week I expect a move down to start but I'm not sure yet on how far it drops? It depends on if this new FP this morning is hit today or not? If not, and if it's not hit on Tuesday either, then we might only drop to 2600 SPX or so and then back up for that FP later in the month.

I'm just thinking out loud here on how SkyNet could trick us all by showing us the FP and then not hitting it today or Tuesday. I'd prefer to see the FP hit on Tuesday with another green close (I want one for today too of course, and we should get one due to the SPY needing to be pinned where the most options expire worthless). If you give me that (a green close today and Tuesday), with the new upside FP hit, then I'll become much more bearish and expect only a bounce on the move down to 2600 SPX for a lower high, and then another drop lower toward 2450 or so in the coming days to weeks. Anyway, I cross that road when we get there and adjust accordingly. Have a great weekend.

The bulls did a good job yesterday of grinding up higher throughout the day and still closed green even though they gave back some going into the end of the day. Afterhours that pullback continued but this morning the market is barely down. The important thing for the bulls was to hold that 2600 SPX, 24,000 DOW, and 7,000 Nasdaq level... and so far they are doing just that. The market is quite overbought up here at these levels so it could rollover at any time, but with this week being the monthly options expiration it's likely that they will hold it up until the close Friday to pin the SPY where it does the most damage to put and call holders. Looking at the open interest on the SPY there's a lot of puts at the 260 level and not much for the calls until 265, which is still half in volume of the puts at 260.

Of course this changes throughout the day but since there's only two days left it shouldn't change much. It suggests to me that a move up toward 265 (2650 SPX) is more likely then a move below 260 (2600 SPX). The sideways action we've had recently looks like a wave 4 of some degree, so this current move up is likely a final 5th wave of some degree. It could end at any time but I still think not big on the downside will start until next week due to the month option expiration manipulation that happens so much. Anyway, not much on the technical picture other then "overbought", "overbought" and "overbought"... which as you know just means we are close to a turn down but never forget that the market can remain overbought longer then most people expect. Have a great day.

The market finally broke out of the choppy sideways trading range yesterday and took out DOW 24,000, SPX 2600, and Nasdaq Composite 7000. This morning see the futures up slightly in the premarket session. It's not acting like a strong bull market move up of course but I'm sure that's because this move is just a bounce in a bear market and they are supposed to grind up against the trend... which what the market seems to be doing this morning.

I don't have much more to say that I didn't already say, and that is that there is a gap fill on the ES Futures at 2651 that needs hit at some point this year, and this current rally up could be the one that does it. It doesn't have too do it with this rally of course as it could wait until the summer rally to fill it I guess, but it's so close now that it feels too me like that is the upside target for this move up. There's also an upside FP on the SPY in that area too, so that's another reason to rally up there in the coming days. That's all I have for today, so I'll end this update to keep it short and simple. Good Luck.

Not a lot to add that hasn't already been said. The market is now going on day 5 of a tight sideways trading range. There's tough overhead resistance around the 2600 SPX around and DOW 24,000 zone. Time is the issue here as it's running out for the bulls I believe, whereas the bears as just "holding the line" until this time runs out. Today sometime or tomorrow is about all the time left for the bulls to make their move up with a breakout.

After that I think the short term chart will have worked off enough of the oversold conditions to be overbought or neutral... which is where the bears should take back control again. I'm still leaning slightly in favor of the bulls here but only slightly, as by tomorrow if they don't breakout I'll become a bear again. Trying to accurately predict the next move when we are in a tight sideways trading zone for multiple days isn't something that is easy.

It's more of a "best guess" based on a slew of factors... like seasonality, which week of the month it is, what's the bigger time frame charts look like, are there any FP's that are still unfilled, and "turn dates" near by? Then there's just a gut instinct based on all those factors. In the end it's just like throwing darts blindfolded, where you hope and pray that your arm has "muscle memory" from all the years of practice. In the meantime I'm just waiting and watching for a higher odds play to setup. Happy Tuesday.

The futures are down a little this morning, which in the old days a drop of 20 points was a mini crash, but today it's a normal move. The MACD's however look oversold a little on this 60 minute chart but still slightly overbought on higher time frames like the 6 hour. My best guess about today is that it will float around this bottom early in the day and rally back up some later on, but still close red.

This week I suspect we'll see some choppy action as the market doesn't look ready to go back down yet but is also up against some tough resistance above. There's always a fine line on how long something goes sideways as the normal pattern is to breakout to the upside at some point from forming a bull flag. But if sideways too long the bull flag fails and another drop follows.

I would estimate that if we trade sideways today then tomorrow or Wednesday would be the last chance for the bulls to breakout if they plan on filling that gap overhead at 2651 from 12/13-12/14. After Wednesday I think odds will go down quite a bit on that happening and odds will increase on another drop starting.

I still don't think we are going to revisit the 12/26 just yet, that might not happen for another month or two? It's just too early right now to revisit that low as the larger time frame charts are still too bearish and need to work some of that off first before going back down hard again. Anyway, let's keep it simply for now and just focus on the short... which I already covered. Time for some coffee.

Yesterday the bulls did a great job of chopping sideways to slightly up after pulling back at the open first. They are carving out a nice bull flag by going sideways in a tight range. This morning we are down a little again, just like yesterday. We are also getting really close to a rising trendline of support on this 60 minute chart of the ES Futures. The longer it goes sideways the higher the odds are that it breaks out to the upside. The big short I was looking for yesterday never showed up.

There wasn't any quick move up and reversal but instead a move down in the morning and a slow grind higher all day. We could see a small red close today but the way the bulls are acting I would not be surprised if they don't do a late day rip higher. This move sideways still looks like a tiny wave 4 down to me, so a tiny wave 5 up should come soon. After that we should complete the small C wave up of the ABC up from the low on 12/16. As far today, it's about as tough to predict as yesterday.

There's no strong edge for bulls or bears here. The bulls are up against some strong resistance but the bigger time frame charts are still very oversold. So the bulls should have the advantage on this bounce continuing but they might need to pull back some next week before trying to push higher. I'll end this update here and post any additional comments or charts in the chatroom throughout the day if needed. Have a great weekend.

This small red showing in the premarket is the first sign of weakness in awhile. On a wave count I'd guess it's a tiny wave 4 down of a small C up from the 1/3 low of 2441, which the small A up started at the 2340 low on 12/24, and the ABC up is about to end soon... most likely today. Then another ABC wave series down should happen into next week I believe. Whether we make a lower low or higher low it still not known, but odds are for the higher low as that's where the FP is at on SPY.

With today being a 111 day (01/10/19 breaks down to 0+1=1, then 1+0=1, and 1+9=10, which again reduces to 1) we also have that additional clue that we'll top out on this rally by the close today. We don't usually get as many clues but with a FP on the SPY, some clean wave counting, and a ritual number code... plus negative divergence on the MACD's and hitting resistance from rising, falling and horizontal trendlines, we have more then enough evidence to take a trade with high odds of success.

Hopefully we can get a pierce of 2600 on the SPX, and 24,000 on the DOW at some point today. The Nasdaq already pierced 6600, it's "even number" area, so we just need the DOW and SPX to follow. Don't get me wrong, it's not required to happen for the short setup but it would be a nice addition. However, we do need the DOW at the minimum to close green today. This would give us the highest odds setup.

If it doesn't then the odds would just go down some, and that would be determined on how far down it closed red, and whether or not we pierced 24,000 intraday. It would be more of a "feel" kinda of thing but basically I'm thinking that if we pierced through the even number levels of 2600 SPX and 24,000 DOW and then quickly reversed to leave a topping tail and closed slightly red then odds should still be pretty good for the bears.

Why? Because that move would have likely been a "stop run" on the shorts to clear them out before the market rolls over. But if we trade sideways all day and dip into the red by the close I'd feel like we failed to make that tiny 5th wave up to end the small C wave up, and that all we did was carve out a bull flag "tiny wave 4 down" all day.

That would leave me guessing that the bulls might want to push it higher on Friday and even next Monday or Tuesday with some extended tiny 5th wave up. Doing it today instead would limit the distance the tiny wave 5 can go I think as the best I could see is slight pierces of those even numbers on the DOW and SPX.

Bottom line here... root for a green close today if you want to take a high odds short. That's with or without a pierce but some kind of push up intraday to justify a tiny wave 5 happened would be needed. Since the premarket is red right now that basically would be fulfilled anyway when closing green as we'd have to go up some just to make that happen. That's my two cents. Good luck everyone.

The market is looking very tired right now and the futures are trapped at a point of resistance. I'm still rooting for a gap fill by tomorrow from 12/13-12/14, which is the open 2 points between 2649.00-2651.00. That's my ideal shorting spot for the next move down. But we can't see any pullbacks prior to that where the market closes red. We need multiple green closes to continue today and tomorrow for this perfect setup to happen.

Any drop into a red close today can reset this perfect bearish setup and open the door for a lot more upside in the coming days. It's kinda like a game of football where a green close today will be the 3rd down and a green close tomorrow will be the 4th down. Touchdown would be a new all time high, and that's just not happening from this level on the 3rd down.

So the bears need to make sure they don't throw out some penalty (a red close) that gives the bulls another 4 downs to run the market up higher. Make them turn the ball over tomorrow with a green close on the 4th down and bears can run the market back down hard in the coming days.

The DOW is the main leader here and if the various ETF's are mixed between red and green at the end of the day it's the DOW that needs a green close the most. The SPX, Russell and Nasdaq could close red slightly and we should still be ok for the today being the 3rd down for the bulls. Now, as for that gap fill... it doesn't have to close. But if the bears want to take the market deeper in the coming days to weeks then they want it closed.

Having open gaps on the upside just begs for the bulls to return to that spot at sometime in the near future. Best to get it closed so it can be forgotten about and then the bears can just open another can of whipass on the bulls. But don't worry about the bulls as they will get their turn to return the beating on the bears with a nice summer rally.

For the short term though lets see if the bears can take back control this Friday. Their mission is (should they decide to accept it?) to let the market close green today and tomorrow. Can they resist the urge to attack? Only time will tell.