Yesterday the bears were still in control the first two thirds of the day but later one the bulls finally broke out and started a push up. They hit some resistance from the green horizontal trendline after-hours as well as a black falling trendline. But after a pullback they have managed to turn back up and get through that falling black trendline and are trying hard to get through the green horizontal trendline. If they make it the next resistance is a green falling trendline pointing to about 2665 or so for today. I suspect that's where most trades will look to re-short and/or exit longs they took. But I'm just neutral at that level as this move up could fool people and last longer then everyone thinks... meaning it might stop at that resistance but instead of dropping hard again we might only see a small pullback of consolidation before pushing through it Friday or even Monday.

The large drop Tuesday took a lot of people by surprise and now that they are awake and ready for another big drop I think the odds are much lower for it to happen so soon. Yeah, it could still happen but more time needs to pass for people to forget about the most recent one. And people need to get bullish again, which I don't think they currently are. This is a game SkyNet plays with the sheep's emotions and right now everyone is in fear mode of another larger drop. Once enough time has past and the market has rallied up high enough then that's when we should start preparing for another hard and fast drop.

By no means am I saying that it's not coming as I do think we'll see another large move down, but it needs to come from higher levels then right now and further out in time. For the downside support we have the falling black trendline pointing to around 2635 today and then the red falling trendline pointing to 2610. I don't see that red one getting hit but the black is possible if the bulls can't get through the green horizontal trendline today. If they do get past it then again they should pause at the falling green trendline and likely pullback to the green horizontal one they busted through. It will become support then as well as the black rising trendline intersecting it around 2652 or so.

Quite a drop we had yesterday. It was exactly what I was looking for but went deeper then I expected. In the end though it found support at the falling red trendline and is trying to bounce this morning. When you look back at similar drops you'll notice that the next day it commonly struggled to get going, but after a second on third day there was a strong move back up. We might experience the same thing again... but I'm not thinking this is the move that takes us up to all time highs.

From the January top to the first low that is likely some large A wave down, and since that low the market has been in a 3 month long B wave up. So, the bulls aren't out of the woods just yet as the C wave down could take out that first low of 2532 and scare the hell out of them. It doesn't have too of course as it could "truncate" short but I wouldn't bet the farm on it. For now it's just a day by day market, go long... get out, go short... get out, just don't take a side yet as the market is trendless right now.

Ok, so if today we carve out a small wave 1 up and 2 down then later today or tomorrow we might see the wave 3 up (then 4 down and 5 up) into resistance, which at this point is first the falling black trendline pointing to around 2640 today and then the falling green trendline pointing to about 2670. Getting past that is the tough part for the bulls but if they do then I'd look for the 2720 prior high to stop them or the falling blue trendline pointing to 2730... and after that is the gap fill at 2755-2760. It way too earlier to even look at those level as the bears are still strong and very awake right now.

Yesterdays' move down did NOT produce that high of volume so I wouldn't go out on a limb and say that the bulls got "flushed out" in a panic, as there really wasn't any panic... and that's the worry for the bulls. For a real low to be put in I feel there needs to be a high volume day where capitulation happens, and we didn't see it yesterday. That implies there's still some risk of a surprise drop below the 2532 low still in the cards. Yesterday was a test (almost) of the 200 day moving average on the SPX chart and that's kinda the "line in the sand" for the bulls.

If it breaks (currently at 2607.93) then the big boys will hit the sell button and that's when you'll see large volume come into the market. Triple bottoms are rare when the third hit takes place under the 200dma, so I wouldn't expect that 2532 prior low to hold either. I'm short term bull here but after this week ends (or I see exhaustion on the bulls into one of those resistance levels), I'll go back to neutral with a finger on the sell button.

It won't be easy to figure out when the bulls take the market back up into a middle ground zone as then we'll likely see mixed charts. Some will look bullish leading you to think the low is in and it's off to the races for a new all time highs... and some will look bearish forecasting the opposite. But until that happens I'll just trade what I see and currently I'm looking for a 5 wave move up (or 3 waves?) off the lows yesterday.

This morning the futures have broken out of the falling black trendline that makes a triangle with the horizontal green trendline. Many now think that we are off to some strong rally but I think we have one more down move coming to wipe-out the longs that bought the double bottom low yesterday. So we could open up and just rollover immediately or hold this rally all day and then rollover tomorrow.

I'm not sure which but I'm not interested in a long here as I think there's one more down move yet to come. It should be a back-test of this falling black trendline and I think it should also go lower then yesterdays' low to possibly the rising black trendline pointing to around 2642 or so right now. If that breaks I'll look for support at the falling red trendline pointing to around 2620 or so, but I'm not really thinking it will go that low. It could, and that would be fine with me, but just not expecting it.

However, if it rolls over today and starts the move down it should continue in the close I believe and ideally we'll see the low of the day right around the close. To me that will be the spot to go long as it will have lured in bears and shaken out bulls that were long yesterday. The futures already look "toppy" too me so it may rollover today versus waiting until tomorrow.

Usually there is a move down at the open anyway and then right back up again, which in this case might be the last move up before hitting strong horizontal resistance... which is around 2690-2700. If 2700 gets broken then this forecast is wrong, but I give it low odds of doing so... especially doing so and HOLDING! Anyway, that's what I see for today. Good luck.

Good Monday morning everyone. I don't have much to add this morning. It looks like the market wants to bounce a little but it will have to get through resistance from a falling black trendline first. It suggests to me that the 2685 or lower area will be about the point where it hits that line, and with the charts looking mixed it might just hold the bulls back. I'm just not seeing any edge to either side right now. I'm neutral on the direction as it could just as easily rollover and drop as it could rally all day. It doesn't feel low enough yet to go long or high enough to short. This 60 minute ES Futures chart is trying to come up from oversold territory while the 60 minute SPX Cash Index is trying to go down from being overbought... thus the neutral forecast. The futures usually lead the the cash so I think we are close to a bottom, which should be this week. But it could be another month or more of range bound trading until we see a breakout to all time new highs I think (or breakdown to new lows?). In the meantime we will likely continue to trade in a large range. I'll end there and wish everyone a good trading day.

Yesterday the yellow rising trenddline held most of the day and was pierced at one point but closed on it. This morning we see the futures below the trendline and backtest it about 7 am with it currently rejecting that test. Today doesn't look too bullish but I'm not expecting anything huge on the downside either. My speculation is that we'll go down during normal market hours to retest the premarket lows of 2682 or so. On the SPY it's 268.03... give or take a penny. At that point I guess we'll see if we bounce or continue on down to a possible FP from 4/17 of 267.33 (around 8:45 am).

That would be my spot to exit shorts and look for a bounce back up... possibly late in the day near the close? Or it could happen afterhours and into Monday but I think there will be another move up after either that FP or the premarket lows are hit. Whether it takes out 2720 or not is unknown at the point. This does appear to be a wave 4 down from that level but it's not deep enough for me to think the wave 5 up will be guaranteed to take out that 2720 level and squeeze on up. Had we pulled back to that green horizontal trendline around 2655 or so I'd give higher odds of the 5th wave up being a strong one that takes out 2720, but I don't see that happening today.

Possibly this wave 4 down is subdividing into an ABC down move? If so then maybe the low today just puts in the A wave and the move up into Monday is the B wave? Then the C down sometime next week to 2650-2660 or so to end the 4th wave. This all assumes we go down today to test the morning lows of course, as if we rally instead and "let's say" just ride up the yellow rising trendline all day then the A wave down could have be completed yesterday and that rally up today would be the B wave... leaving Monday for the C down.

Those are the possible scenario's I see for today and early next week. Overall I still then that after this wave 4 down ends we'll get a nice rally up to fill that 2750-2755 gap, but that might not happen until early May. In the old days it used too be common for the 3rd week of every month to be bullish and the week after that (usually the last week of the month) to be bearish. This was before the weekly options were created and really doesn't have as much accuracy now days as previously.

This was of course because the market makers would manipulate the market up that 3rd week to make the puts they sold to the sheep during the 2nd week expire worthless. Then the market would go down the 4th week just from the technical's of it being overbought short term from the manipulation during that 3rd week. With the introduction of weekly options now this has all changed. Yeah, the market makers still manipulate the market but now it's just a guess on that 3rd week or 4th week playing out like it used too do all the time.

But from a technical point of view a move down next week seems more likely then a move up. The SPX is getting overbought short term and ready for a pullback... small of course, like the move down to support in that area where the green horizontal trendline is at. Even better would be a move down to the rising black trendline pointing to just over 2630 today. To me, that would be the ideal target for an ABC down wave 4 to end and then a strong rally up early May to close that upside gap. After that... who knows? But a larger move down could be in play at that point. Have a great weekend.

Looks like the futures finally broken down from the rising wedge. I guess the bulls didn't have it in them to do a fast pop out to the upside this time around. My guess is that it's a wave 4 pullback of some kind and it should find support from the new yellow rising trendline, which is pointing to 2690 now to 2700 by the close. After this pullback I'd look for one more wave up with a target of 2740-2760 at most. There's now the rising red and purple trendlines pointing to 2740 today and that gap fill in the 2755-2760 area. I'm not sure where it will end but that area is my best guess. If the yellow rising trendline doesn't hold then I'd look for 2670-2680 as the next horizontal support zone.

Sometimes wave 5's up will truncate (fall short... aka, fail to make a higher high), which possible here, but the clues to that happening are as follows. If the wave 4 down today takes out the yellow rising trendline of support then it will end up being a pretty decent pullback and nice wave 4 down. From what I've noticed in the past when this happens the wave 5 up that follows rarely truncates and usually goes a bit longer and higher then everyone expects. Now on the flip side of that is when the wave 4 pullback is small and short in time the wave 5 up then doesn't have as much power and will barely go over the wave 3 up high or even truncate.

I don't have odds showing how many times this happens but I just want to note that it has a higher chance of a small wave 5 up if the wave 4 down is quick in time and shallow. This applies to choppy markets mainly as in a long strong bull market trend up it's common to have tiny pullbacks on both the wave 2 and wave 4 down and calculating the distance of the final 5th wave up worthless in this scenario. Currently though we are in a sideways choppy market from the January 26th, 2018 high and this is where wave 5's up have a higher chance of falling short or barely going higher.

Basically it's when the bulls and the bears are equally matched like they have been since that January top. It's a game of football now with both sides strong, versus the last 2 years of the bulls just winning every game with blowout high scores and zero points for the bears. It's a battle right now that could last for several more months will neither side taking out the all time highs or recent lows. But the bears are the underdogs and not liked by the powers that be, as they favor the good ol' boys (aka, the bulls) and will bride the referee's and cheat every way they can.

So even if the bears take out the lows in the next few months I still see higher highs coming before the year ends. It's like a game of the rich and poor and every now and then you let the poor win (the bears) but after that it's back to normal with the rich (the bulls) winning for many years to come. My thoughts are that the bears are just building up their team this year and it's the first time in awhile they have stood toe to toe with the bulls, but next year they should have their best team ever and it should slap the bulls hard for 1-3 years before the bulls take back control for the next 10-20 years.

Put simply, I think this move down we've had since January has one more move lower in it before an end of the year run up to new highs... and that higher high should be the last one the bulls see for a couple of years as that's the point the interest rates should be high enough to cause a derivative implosion and down goes the market. When the dust settles in a few years we sheep will experience hyper-inflation most likely with a super strong bull market that roars up to insane levels into the 2020's and later. Anyway, I'll end here as sometimes I get long winded and just want to put my thoughts to paper... which this morning was about the long term outlook. Have a great day.

Not much to add today that wasn't covered yesterday. The bulls continue to grind up the rising wedge as bears keep shorting it. The Apex of the wedge is near so I wouldn't be surprised to see it busting up out of the wedge soon to defy gravity (not that gravity even exists as it's just a made up word to keep the sheep stupid) and to fill that gap in the 2750-2755 area. Since everything in this world is the opposite of what you think you have to learn to adjust your brain into thinking that way. That's why I say we'll bust up from the wedge instead of down like every logical person would think.

Anyway, I don't see much opportunity yet for the bears as there are too many on the train right now and more time is needed to shake them off. I expect they will hold the market over 2700 all week long to make sure all the puts expire worthless. If we breakdown below the wedge then that could be a 4th wave down and suggest one more 5th wave up to end this rally.

But right now we are clearly in a slow grinding wave 3 up and it doesn't look ready to give up yet. The falling blue trendline and the gap fill is the goal for the bulls but expect so tricky action around that area as everyone see's it... therefore it won't likely end with a perfect hit and gap fill. I'd expect so fake out dancing around it to happen to make sure the bears aren't on the next leg down. But until then I don't see much on the charts to get bearish about yet.

Looks like the bulls have finally decided to make a run up that sticks as I don't see any red 6 hour bars now since this move up started Sunday night. They are back in the rising wedge and continuing this grind up inch by inch. Baring some unknown news event to shake the market it's looking like this is the run to close the gap in the 2750-2755 area. Looking back at prior run ups the pattern seems to be for them to crawl up small each day at first and then have some explosive blow off day where it does 50 points or more in a final squeeze.

Basically it suggests that they will do what the least amount of people expect, and most expect a breakdown of the rising wedge because that's a logical thing to happen. But prior times show it defeating gravity when it gets close to the Apex of the wedge and instead of falling down from that peak it will explode upward out of it. Technical s don't make at that point as it's all about squeezing the last bear out before rolling over. So the more bears that short this 2700 area the more likely this last thrust up will happen. That's how they will close that gap. Unfortunately that sets up the bulls for a much deeper move down in the weeks that follow.

They would do better to drop out of the wedge with some fast 30-40 point move and stair step their way up to new all time highs. But they don't like to do that when they have bears trapped. So they squeeze the last drop of blood out of them until they all turn into bulls. Then they tank the market will bears all long and of course bulls long too.

Do the stair step move up and the bulls can prevent any retest of break of the 2532 low, but grind up slowly with some final gasp up move and the next move down could be the one that scares the bulls into wetting their pants. So, it's a "wait and see" game we play. If you're long then great job, just keep your stops tight. If you are short be prepared to endure more pain as odds are with the bulls today and only a nice breakdown of that rising wedge can save you.

Well, here we are again... same thing different day. The breakout of the falling red trendline yesterday was not impressive in my view. Clearly it wasn't a wave 3 of any degree. This morning we have a nice move up happening but it still doesn't act like a wave 3 should. I've added a rising pink trendline and with the rising purple trendline we have the futures stuck in a wedge that points to 2700 or so at the peak of it today. Will it reach there or not is unknown? This is not the kinda of market action I'm looking to play.

This is where you just flip a coin on puts or calls for the next day, which is just gambling. I hate it, but believe me I've done it many times in past. I try not to do so and instead look to catch a strong wave 3 or C up or down but we aren't being given that here lately. Anyway, I don't have much more to add that hasn't been said all week. We seem to be climbing the wall of worry now and trying to catch a nice wave isn't going to be easy. Maybe next week will be better. Have a great weekend.

Here we are this morning with basically no change from yesterday. The futures keep making triangles off the upper falling red trendline with this morning having it ride up a new rising purple trendline, which puts it at the Apex of that new triangle. A breakout to the upside seems more likely then a breakdown at this point but there's still no clear direction showing. All the rallies seem to be getting sold, and most likely that's by the big boys. We are much closer to a strong rally starting then a big sell off. But that doesn't rule out a fast "one day" drop as that's still possible.

But it should be bought up and would likely start the multi-day (or week?) rally. In other words, I'm not looking to catch that short but would rather catch the long as it should be a powerful one that last awhile (versus these half day moves up and the back down in the same day). The daily chart of the SPX is still bottomed and trying to turn back up... so that's bullish. The 60 minute chart is mixed with some things being overbought and others oversold. Back on the ES Futures 6 hour chart it to is mixed as it's basically been trading sideways on its' MACD's for awhile now.

That shows no clear direction. It doesn't act like it wants to rollover and cause a sell off, but it also doesn't seem like it has enough strength to turn up sharply and rally the market higher yet. But I think we are close to a breakout and it could (should) happen today. Yeah, that rising purple trendline could break just like the rising light green one did a day or two ago.

And then it would probably just make another new rising trendline of support and continue its' attempt to breakout to the upside. With all the hits of that falling red trendline it's got to be getting weaker and weaker and will break soon. It's like a dam with small holes in it being equal to hits on the trendline. Eventually the dam will burst and collapse, just like the falling red trendline will give way to the futures trying to push through it. That's all I have for today... happy trading.

Here we are again it seems. Up and down, up and down... it's getting very tiresome. Bulls can't breakout and hold it and bears can't push it down and keep it. Every dip gets bought and every rip gets sold. We've yet to see a capitulate day from the bulls and that makes it hard for any rally up to stick. Pattern-wise and EW count we are bullish but on the technical analysis side it looks bearish with overbought short term charts. The daily chart though is oversold, but the weekly is still pointing down strongly. We really should start a multi-day rally soon, but we need to bulls to "quit" buying the dip. Anyway, for today we could drop to that lower rising trendline in black that's pointing to around 2594 or so right now. It's the bottom of the triangle while the top of the triangle is the red falling trendline pointing to around 2655 currently.

The market has made a series of higher lows on this grind up but also some lower highs... hence the triangle formation. A breakout of the triangle will likely come soon, possibly by the end of this week. It really should be to the upside but I'm still a little leary of going long and getting caught on that "flush out" move down. Maybe it never happens? Or maybe it does when no one expects it? The options expiring today show little large open interest until around 260 on the put side and 267 on the call side. So a fall to 260 (about 2600 SPX) is possible. At that point I think I'd take a shot at a long as it could be all that is needed to shake out the dip buyers.

If we fail to drop much more then what we are down already I'll probably just sit on my hand for now as I won't feel safe going long just yet. If we rally up to hit the horizontal green trendline of resistance and the red falling trendline then I might take a small short. It's really tough right now to trade without just placing longs and shorts at resistance and support and not knowing if it will break or not... which is just doing it wild wild west style. Personally, I'd rather wait for the wave 3 or wave C (up or down) to catch. Right now I don't see either, just more crazy swings. Good Luck for those of you to like to gamble in this market.

Up, down, up, down, up, down... seems like this market is going nowhere. But we might be about ready to breakout soon. We have a what looks like a wave 3 up started from the 3/9 low of 2584 and yesterdays' rally up into mid-day was probably the first wave of that 3rd wave up. Then the dump into the close was likely the second wave, which suggests we are about ready to start the smaller wave 3 up inside the 3rd wave up... which all started at the 4/2 low of 2552 where the "head" of the "inverted head and shoulders" pattern formed. The breakout zone of that IH&S pattern is around the 2650-2660 area where there's a horizontal green line at.

A second breakout level is around 2670-2680 but once you get over the falling red trendline pointing to around 2667 (+/-2) you shouldn't have any problem clearing that next zone. I've drawn in a light green rising trendline of support to watch. That level is critial for the bulls to hold today and if they do then they "should" bust on through the horizontal green line of resistance tomorrow and start that 3 of 3 wave up. Maybe they do it today? Who knows for sure? It's been very hard to figure this market out as every time you think you see a breakout to the upside it fails and rolls over again. Then on the downside every drop is bought back up so you can't get that "flush out" move down to below 2532 either. Bulls and bears are not giving up and it makes it tough to take a long or short for more then just an intraday trade.

Holding overnight at this point could get your head torn off. So here we are at another conjunction where all we really have to go on is an Elliottwave count and an IH&S pattern that says a big move up is about to start. From a technical picture the week chart still shows no signs of turning back up and looks very bearish to me. But the daily chart looks bottomed as is showing positive divergence. The 60 minute chart is mixed. What does it all mean? It suggests to me that the bulls will chop around for most of today (if not all of it?) to reset the 60 minute chart back to neutral or slightly oversold. Then tomorrow it will be in alignment with the positive divergence on the daily chart, which should then lead to a strong wave 3 of 3 up.

Of course a failure here on the bulls part (by losing the light green rising trendline today or overnight) "could" result in that "flush out" move down to make the bulls capitulate. I don't think it has to drop below 2532 or even 2552, but it does need to trick them into thinking that both the EW count and the IH&S pattern both failed. So possibly a move down to the 2590-2600 area where the falling black trendline and rising black trendline are pointing to? Or maybe they dip a little lower to 2570 to take out the stops the bulls have below that 4/6 low of 2584 where the right shoulder is at, and the start of the wave 3 up? This would of course change the EW count, but I've found that EW is not too accurate at predicting the future as wave patterns have too many alternate counts.

However, if this one works then a move up to the 2720 area would be the most likely target zone, then the gap fill around 2750-2760 would be next. We have earnings season starting soon and this period of the year is usually bullish. So I'm leaning toward the bullish scenario working here and the "flush out" move to make the bulls "capitulate" just not happening yet. Remember that we also have hit the 200 day moving average several times now and held on a weekly close. This is very important for the bulls so as each day and week goes by the odds of large drop below the 2532 low (or even the 2552 low) are greatly reduced. So there you have it... a forecast that leans bullish but not convinced yet 100%.

If I were going to play this move I would hedge myself with some short term "puts" that expire tomorrow or Friday to have "just in case" the wave 3 of 3 doesn't start later today or tomorrow and instead the light green rising trendline is broken afterhours. On the long side of that trade I'd likely go out a month or so for my expiration of either straight calls or a call spread. Not saying I'm doing it as I won't know until later today during regular market hours.

But if I do that's how I'd play it as it would protect me on a short term large drop tomorrow with the puts making money and the calls losing but having more time to recover. Of course if the market rallies up tomorrow then the calls would workout great and the puts expire worthless. But since I'd be putting more more money on the calls and just a small bet on the puts I should still be up nicely. If I do the trade I'll of course post it in the chatroom. It's not trading advice of course, just me thinking out loud on how I'd trade it safely. Good Luck.

Looks like we finally got that strong up move started that I was expecting by Thursday or Friday. It came a day early and fooled me as there really wasn't that much volume in it... very strange. While the low should be in for awhile the lack of any capitulation on the downside has me wondering if this is the rally that's going to take us to new all time highs or not? The weekly and monthly charts are still bearish in my opinion and I'm questioning myself on whether this rally can stick and take out the current all time high.

It's bullish short time but I was looking for a bottom that would allow us to run up to 3000 or more on the SPX into the summer, and I'm 50/50 at this point on whether this is the start of that rally or not? We need to be cautious on this move up as it might just end sooner then we think. I'm expecting a hit of the falling red trendline pointing to the mid-2670's and then some sideways to slightly down movement to reset short term overbought charts. Then I was (but that can change) expecting a push through that red trendline and a run up to fill the gap in the mid-2750's where I've drawn a light green and orange horizontal trendline. If it drags out another couple of days the falling blue trendline might intersect with that gap and make the perfect resistance area to short at or exit longs.

From there we'll have to take it day by day as if that line isn't broken within a few weeks after it's hit then I have to think we are going back down to make another lower low... and if that happens then the all time might just be put in already as the next trip down should easily drop us into the 2400's or lower. Again, I'm 50/50 on this right now and will just play what they give me. As for today I don't expect much action... probably just some chop with an upward bias toward hitting that red falling trendline. No signs yet of any pullback.