Afterhours and premarket there was some nice swings down and up and down again as market digests the tariff news put out after the bell yesterday. As least that's what the media will blame it on. There's also a new FP on the SPY of 268.45 around 2:30 am, which might be the coming high for this rally up from yesterday? It looks like we had an A wave of some small degree up yesterday and since it's looking like we are going to gap down this morning I'd say that wave completed at the close.

Today, or at least early in the day, we should have the B wave down. That leaves the C wave up into the close on Wednesday, which might be when that FP is hit? I don't have any targets on this B wave down but I don't think it will be too deep or too long in the making. My guess is that it's finished with by midday at the latest and we start the C wave back up from there. The dip buyers should be out right at the open but I don't think we'll start the C right from there.

We should drift lower for a few hours after the open I believe to form this B wave down. It will make a nice "inverted head and shoulders" pattern on the 60 minute charts too. Anyway, that's all I see for today. I still think we are going down again soon as I don't see this bottom as strong enough to hold for some year end rally. Good luck to both bulls and bears.

The market is in rally mode this morning. I guess the low last week was close enough to the October 29th low to call it a double bottom. We all knew it was coming at some point so this shouldn't be any big surprise. The falling orange trendline, falling blue trendline and falling red trendline will all be resistance on the way up. So far the futures see to have stalled out at the orange trendline. The short term is obviously bullish but the big picture is still quite bearish. I do not know how long this bounce is going to take but I fully expect it to rollover at some point soon. Closing green today on the DOW would really be helpful to the bears as they need to break the consecutive red days in a row to reset it and allow for another series of down day to occur.

As for todays rally, I'm unsure if it's the "squeeze rally" that will come at some point (which should easily rally 100+ points up) or if this is just resetting the short term charts for another leg down. We are in tough spot here because we never really hit a double bottom and have started back up already. When you compare the SPY/SPX to the Nasdaq/QQQ you'll see they put in a lower low last week. So for now I'm just watching (and staying short) until the picture becomes clearer. I'd like to see a lower low on all the indexes and positive divergence form before I'd believe any rally up will hold. Until then it's just likely a short squeeze to shake out the weak hands. Good Luck as usual.

Looks like it's time for a pause day as the bears easy up and allow the bulls to rally some this morning. There is resistance overhead at three falling trendlines. The first in black around 2670, the next in brownish orange around 2690 and the last in blue around 2710. Now I really don't see this as much more then a bounce as the trend is still down in my opinion. Since today is the day before Thanksgiving the volume should be light today, so I'm not expecting another large down day today.

Could it happen? Sure, but most likely we'll rollover at the open and then back up in the afternoon. If it plays out like that I'd expect a higher low on the early pullback and then up into one of those resistance areas where it should end the bounce. It will probably end up being some kind of ABC up with A up happening right now and into the open. Of course if this ABC up finishes early to midday then the afternoon is open for another big drop, but I'm leaning toward the C up taking all day. It's just because I expect light volume today mainly, but I also think we need a green close today.

Friday will be a half day trading session so it could be another green close day, it's just too hard to predict. Could they crash it on that day? Sure, but my feelings are that we'll be "OK" on Friday and NOT crash. But starting next week I expect the move down to continue. I've not forgotten the 11-11-11 ritual number and the movie named the same. While nothing happened on November 11th, 2018 (the first 11-11-11 day), there's still one more date this year that is also a 11-11-11 day. It's this coming November 29th, 2018... so that would be next possible crash date. Anyway, for today and this Friday let's just watch and let the bulls have their fun and see how high they can get it up to. Have a wonderful Thanksgiving.

P.S.  If we rally up into that falling blue trendline today then yeah, I'd expect this Friday to drop.  But I just don't see that happening today, but it's probably a goal of the bulls for Friday.  Let's see if they can do it.

Well, another down day starting off this morning. We had an intraday FP on the SPY yesterday showing 266.75 but we are already lower then that right now in the premarket, so at this point I'm unsure if that's going to be a level it turns at and bounces. Normally FP's are hit and then a turn the opposite direction starts, so that would of course be up today since it's now hit in the premarket. I have my doubts on that happening now and will just let the bulls prove themselves to me at this point.

We've been tracking the 1987 path for awhile now, so days are almost exact, and others not but still in the same overall pattern. If we don't retrace 38.2%-50% of the move down starting yesterday at some point today then we'll be off that "exact match day" path but remain on the overall pattern for 1987. To continue on the path we need to gap down hard again on Wednesday with the Jan/Feb prior lows in mind as a target. Then this coming Friday (and/or Monday?) the big drop could happen.

That's if we continue to follow the path "day for day", which doesn't seem likely to me, but more then likely is we follow the same pattern with most days the same and some days off a little but the overall big picture is the same. So, if there's a rally today I'd look for that consolation zone tops from yesterday to be the top... which is the 269-270 SPY area. A quick pierce of that level to take out any shorts and lure in bears might happen? Then rolling back down into the close today would be required for an exact match of the 87 path, versus just staying down all day today which would be just staying with the same pattern of having a down day today. It's a very tricky time right now so I'll just play it by ear and update everyone in the chatroom as I see things change. But for now the odds aren't good for any bounce back up that high. If it happens, great. If not, I'm happy with the shorts I have. Good luck to all.

Finally... the bulls stepped up to the plate and rallied up to a nice green close yesterday. But can they do again today is the question? If you are a bear sitting on the sidelines you welcomed that rally but in order to get another large drop I do believe we need a second rally day (today) to lure in enough bulls and shake out enough bears so that the odds will be greatly increased for a nasty down day on Monday.

Yeah, seasonality-wise next week is bullish as it's Thanksgiving week, but the chart tell me otherwise if today closes up nicely. What I'm looking for here is for the bulls to exhaust themselves by rallying strong two days in row, versus hard the first day, rest the second, and rally the third, etc... In other words, the bears best chance is for the bulls to keep on running today without resting.

Now that may or may not happen as clearly the futures are down this morning and they have not pushed through the falling light purple trendline of resistance, which I'd hoped they would have done afterhours yesterday or premarket this morning. Above it is an orange falling trendline, which would be the ideal target to hit going into the close today. It appears to be right around the high from yesterday in the 2730 area. If the bulls can hit it and close up there (or higher would be fine too) that would likely be a green close, which would show exhaustion and lead me to believe we'll drop hard on Monday... fooling the masses expecting a holiday rally.

But if we close red then odds will flip back to the normal bullish holiday pattern, which would be a light volume melt up next week. Therefore I'll only be rooting for the green close today as I hate that light volume crap that puts me to sleep in boredom. P.S. While it doesn't usually happen on Holiday's if we get that green close today to setup Monday for a big down day it could continue right into Wednesday and hit that prior low of 2600 SPX... might even take it out? Look at how they dropped the market this past Veterans Day, so holiday's aren't something forbidden currently like they have been in the past. I've got my crash helmet ready just in case. Have a great weekend.

This 6 hour chart of the ES Futures appears to be turning back up, or at least it's trying to turn back up. That would support those looking for a C wave up rally to start, which should last for several days and likely into next week. And I must agree that normally I'd think the same thing is going to happen. After-all we have a very clean looking "Inverted Head and Shoulders" pattern, as well as positive divergence forming on the MACD's.

But the big picture suggests otherwise. The daily chart of the SPX does not have any positive divergence yet and its Full Stochastic already peaked with the 2815 high and are pointing down right now, which appear to be in the 55 area or so. Since they usually swing from just under 20 to over 80 it tells me there's more room down yet to come before they bottom and turn back up. This also tells me that the SPX is likely to make a lower low then 2600 when that happens.

It "might" then put in positive divergence on the MACD's? If so, then I'd look for a nice rally to setup. Of course all this is just normal charting and excludes the codes and FP's I've discussed in the chatroom. So when this all sets up I'll be left we a choice on whether I believe the charts suggesting a bottom and a rally to start, or if I believe the codes and FP's will override them and cause a crash. We are not there yet (fortunately) but I do think we'll be below 2600 soon and setup all those positive signs suggesting a bottom is in and a rally is to follow.

Only then will my mind get mixed and not know what to do. Until then I'm still looking for small bounces that get sold each day as we continue lower toward 2600 and below. Others see a move up to retest and go over the 2815 recent high to make a small C wave up of a larger B wave up. Targets range up to 2900 fo this move, to just slight over that prior high. I see a monthly chart and weekly chart that are very overbought still and pointing down on their MACD's with moving averages crossing negative and Histogram Bar's going negative too... with plenty of room on the downside yet to go.

These factors when all added up together tell me bounces will be small and short lived as we continue to drop lower each and every day until we reach a sub 2600 level where some things start to appear positive on the charts. For today it's unclear to me. A green close would be welcome for the bears as it would reset the number of "red close days in a row" and allow them to start down again tomorrow. But the futures are flat and charts are all mixed, so I'll just call for a mixed day with no opinion on the close.

Well yesterday was uneventful as the market choppy all day but in the end dropped into the red a little. Today is looking a lot like yesterday with the futures making a lower low (then yesterday) at 4am EST this morning and have been climbing back up ever since then. It really is trying to stage a rally it seems but it might need another day of chop before it happens? If it manages to do it today then it should be a weak rally as it's probably not going up much past the 2750-2760 area from what I see.

At that zone it will run into some tough resistance and likely get overbought on the short term charts too. I'd say that would be the last rally high before another drop that tests the 2600 SPX (2630 ES) prior low. But bears should welcome this rally as it will get them a chance to get short if they missed it and open the door for a deeper drop to follow. There's another resistance area from the falling red trendline pointing to around 2780-2790 but I really don't see that today.

If it hits it, then it's the ultimate gift for the bears. I just don't see the charts aligned up strong enough to hit that zone on this first rally up attempt today. The "lower low" in the futures is a sign to me that this rally will be weak. Let's face it, the trend is now down and the market makers are going to do the same thing to the bulls this time around as they always do to the bears when the market is in a bull trend.

They do gaps then choppy sideways action, then more gaps and more sideways crap. The bull market was relentless every day with tiny 20 point pullbacks and then 80-100 point rallies right afterwards. Rallies up here should be weak too as this is a C wave down of some large degree and it's a widow maker for traders on the wrong side. There will be a nice strong rally up at some point, as there will be too many bears short and they will need to get them out. But I don't see that as the case today.

All I hear about is the obviously Inverted Head and Shoulders pattern with upside target of 2850-2900... so as long as that talk continues I still think the next big move is down. Probably not today, maybe not tomorrow either, but next week should be an ugly one. For the reminder of this week we might be just setting up a series of wave 1's down and wave 2's up, each of lesser degrees, which will ultimately break to the downside in a wave 3 of 3 of 3, etc...

What a surprise! A large down day on a holiday. Strangely I've seen that act before, but predicting in advance isn't easy. The good news though is that forecasting a "pause" day is, and that's what I expect for today. Ideally it closes green but there's no guarantee of that. Tomorrow might be a second pause day too, so keep that in mind. I don't see them rallying up too high to allow the bulls out or the bears in. Dropping it hard yesterday on a holiday was the trick to catch traders off guard. Now that they are trapped I don't expect Mr. Market to let them out.

Everyone see's the "Inverted Head and Shoulders" pattern so I'd expect some bulls to dip their toes into longs, but if this goes like I expect that pattern should fail and the next big drop should follow. At best I think we have two days of choppy sideways consolidation (pause days) before it resolves itself one direction or the other. My thought are that we continue lower. Anyway, I'll just keep this update short as I'm still bearish over all but I'm looking for chop day today so there's not much else to add. Best of luck to you... especially the bulls.

This morning the premarket session is up again but I suspect this is the last move up from this rally off the bottom as it's into tough resistance now and pullback is likely next. Many people are looking for this move up (a B wave of some degree) to subdivide into an ABC up pattern, which would point to a 2800-2850 zone on the SPX for the final C wave of this larger B up.

It's certainly possible that we subdivide and this move up is just the A wave of the larger B up. Assuming we top out today (looks likely) the B down of the larger B up would then happen Monday/Tuesday of next week, which makes sense when you think about it as it's right in front of the election and some uncertainty is normal. If you listen to the main stream media I believe they have the Republicans keeping control of the Senate at least but mixed opinions on Congress, and that's probably the reason they give for the recent rally.

We traders know it's just technical and in the charts but the talking heads have too talk about something I guess. So if this election does goes as planned and there's no surprises then most traders will be looking for another rally a little higher afterwards. This kind of thinking supports this larger B up subdividing into 3 smaller ABC waves... but what if that doesn't happen? What if the move up from the low is just a one wave pattern "larger B wave up"? That means that after the election the move down in front of it would just continue lower and not turn back up for the final smaller C up of larger B up. Then we'd be looking for a larger C down to be in play and that one would take out the recent low last week and head for the Jan/Feb low... which should also be taken out. Yeah, it's a scary wave down.

Anyway, back to the short term. I think we top out today, and probably close up near the high... meaning a sideways day to burn time is likely. I'm not expecting much higher today then the premarket high (276.19 SPY) as we've filled the gap from 10/22 to 10/23 and are hitting tough resistance overhead. Next week should be interesting for as the fate of market depends on the elections and the FOMC meeting on Wednesday. Have a great weekend and enjoy the fall weather while it lasts.

Today looks like a "pause" day after yesterdays monster rally. All eyes will be focused on Apple earnings after the bell, so I'm not thinking there will be much to do today but wait. However, I do think that if everyone is expecting one thing the opposite is likely to happen. Meaning, if everyone thinks Apples earning are going to tank the market on Friday then it should do the opposite... regardless of if the earnings are good or bad. I don't have much more to add to this mornings update so I'll leave it like this... short and sweet. Hope everyone had a great Halloween yesterday.

Think or Swim is retiring this Prophet chart platform soon. They are having issues with missing data, like entire days disappearing. Anyway, there's a gap on the SPX around 2755 I believe, but I can't see on my SPX chart due to missing data. However, on this ES chart you can see the general area where that gap is at. I do think we'll fill it before rolling over again next week. Probably tomorrow if I had to guess but maybe Monday too?

Today I have two upside targets... the first is 271.00 on the SPY and the second is 273.77, and the determining factor is the speed of the move up. If it drags out all day then the lower target is likely all we'll get, but if that target is hit early in the day then the higher target could be reached by the close. Then Thursday we have earnings by Apple and that's a big part of the Nasdaq, so if it's not a big winner then we could roll right back down... and hard. The downside I target I have for that is 263.69, if they disappoint of course.

I'd love to see the market rally up hard today and drop hard on Thursday, but for now we'll just look to see what today gives us. The open is very close to 271 so if that holds then the higher upside target should be in play for today. Previously I'd looked for higher upside targets, like 2800 to 2830 SPX, but I feel that since everyone else is looking for those levels too it must not happen. SkyNet is a master of tricking the most... I know first hand as the last couple of weeks it has tricked me many times.

How can it trick the most people now that we've started a rally? In my opinion the best trick would be to rally up out of the falling wedge to a zone that has both bulls and bears thinking the low is in (so they exit all shorts) and that a rally to much higher levels is coming (where the trapped bulls will look to exit their longs and go short with bears looking at the same level). To me that level or zone is the 2800-2850 area as it's in the 61.8% to 78.6% Fibonacci Retracement range.

But if this sell off from the all time high really is the start of a bear market I think the bulls will not get such a nice retracement to exit at and become bears. The 38.2% and 50.0% levels are around 272 and 276 on the SPY, and since we have a "possible" FP at 273.77 (plus a lot of horizontal resistance) I think that's the upside target. It might be hit today from the looks of the premarket rally? To me this is just an "end of the month window dressing" move so the October candle on the monthly chart doesn't look as bad. Today or tomorrow is where I think this rally up will end.

I could be wrong again as SkyNet has tricked me a lot lately but my gut tells me that it's not going up to the 2800-2850 zone that everyone is looking for, but will fall short to keep the masses confused. If right we should start back down tomorrow and continue this series of wave 1's down and wave 2's up until after the election where it should start the crash wave down into the end of November.