Well, the bears chose to take it down yesterday, which with today's gap down is a pretty good move in total. But I fear this is going to be a "sell the rumor, buy the news" event after the FOMC tomorrow. We are down in that range of support now that I spoke of on yesterday's post. It's pierced through the 2480 area a little to run the bulls stops I'd guess. If all goes as expected I'd think we'll see a bottom put in today and back up tomorrow after the FOMC meeting. You can see on this 6 hour chart of the ES Futures that the MACD's have fallen nicely and are approaching the zero area where turns back up are common. I say that I took this short as I really was 50/50 on the break of the rising green trendline yesterday. And there's the fact that the 6 hour MACD has gotten other bearish crosses recently that faked me out thinking this time it's going to break. That's when the bears get creamed shorting it expecting it to break, only to see it scream higher again. So now I'll be waiting for this to bottom today and/or tomorrow before the FOMC meeting so I can go long when everyone is super bearish again. I can't add much more then that as I spelled it out fairly well on yesterday's post.

Looks like another rally this morning to open up the normal trading seession.  Will it hold or fold is the question?  It looks like a triple top on the futures so far and it's really do or die time for both the bulls and the bears.  If the bulls can't get through it today they risk falling down in some nasty wave come afterhours or over the weekend.... which leaves Monday as possibly gaping down.  The SPX 60 minute chart is also losing steam on the bullish side.  For the first time since this strong rally up started around the first of January I now see a bearish cross on that MACD... but it's just barely and with the expected strong open coming that could easily cross back to bullish again.  However, it's the first sign of weakness on the bulls part and that is important.

The Histogram bars have fallen below the zero line for the first time since the rally started as well.  It's been a super strong move up from the first of the month but it's looking tired.  It can still go higher of course but cracks are showing now.  This again leads to believe that the FOMC meeting next week will be a "turning zone", where it might not happen in front of the meeting but should after the meeting (give or take a few days).  If the bears can hold this triple top today they stand a chance I think of pushing it down to that prior support zone around 2800 but if the bulls breakthrough today then the current 2840 area will be solid support and tough to break if the bears ever get a move down started.

From looking at various chart time frames it looks more to me like a sideways trading range is going to form and hold for awhile until overbought charts can be reset.  This assumes nothing much comes out of the FOMC meeting.  If something does come out that is looked out negatively then we should start a 1-3 week correction.  If not... then I'd expect rangebound for a similar period.  The range however isn't formed as I do think it will be wider then the current 2830-2850 area.  Possibly it will reach down to 2800 and up to the current 2850 area high?  Again it's unknown currently.  If we have a correction instead then I'd look for 5-10% max, but probably only 3%-5% on this first correction in a long, long time.  That would be about 85 points down to 143 points if the top is 2855.

Again, it's all about getting that turn down started with some negative news... otherwise we are more likely to be trapped in a trading range for awhile and there'll be no correction as when the trade range ends the bull market should continue.  For today though my thoughts are that the current triple top will hold and we'll drift back down into the 2840 area of support where we'll be mostly rangebound until the close.

Well, the bulls finally lost the rising green trendline of support.  But the sideways action from the 22nd this week has only formed a tight trading range from the high to the low yesterday.  Today's challenge is for the bulls to make yet another higher high on the backside of that rising green trendline.  And from the looks of the MACD's they will have an excellent chance at doing so.  The move down yesterday did weaken the bulls a little but overall it's still a bullish market.  It's looking more and more like the next "possible" turn period will be around the FOMC meeting next week.  But while in the old days we would see it have a bullish close about 80% of the time that day, (then the next day would turn down), we haven't seen that happen much in the last year or so.  It's become "almost" a non-event lately as everyone knows well in advance what's going to be said at the meeting so it's no big surprise, and therefore no big reaction in the market.

Anyway, for today it looks bullish to me but it's still very overbought on many time frames.  It's hard to chase a market so overbought and every time you see a pullback you think it's finally going to rollover and do at least an ABC move down, but instead it's just one fast wave down that ends and then it's back to the bullish trend.  Nothing new here gang, just more of the same ol' never ending trend upwards to the moon.  The MACD on the 6 hour chart (not shown) is trying to curl back up as well, which should add support for this 60 minute MACD pointing up this morning.  Odds are good for a new all time high again today so I'd be shocked if it didn't happen.  I don't have any more to say as again it looks bullish right now.  Anything can change by the close, so if it peaks out and rolls over I'd look for that 2840 area now as support and the new yellow rising trendline I just drew.

Well... it shouldn't be any surprise to anyone when I say the market is up again this morning. I've never seen a market that just goes up forever but now I have. The 60 minute MACD's have turned back up as expected and are now around +2.0 from turning around +1.0, but were as high as +7.0 on Monday. This move up on them should not reach that high of course but should make a lower high and setup negative divergence. The problem with the negative divergence lately has been that the market doesn't rollover from them but just chops sideways until getting oversold and then continues higher again.

Very frustrating to try to trade something as no one wants to buy at the top but instead wants a dip to go long on... and it's just not happening. SkyNet isn't giving traders dips and is forcing them to chase it higher or go to the sidelines... which I'm sure many have done. Right now there's just no signs of any pullback as charts have been reset from overbought to neutral or oversold on the short term. And the rising green trendline continues to support the market and keep pushing it higher. Anyway, any bearish align that was possible in forming yesterday has been kicked to the curb this morning.

Until that rising green trendline of support breaks to setup the first small move down, and the small move back up fails to make a higher high (meaning an A wave down and B up) there's just no trades here except chasing the top. Maybe it will see something change after the FOMC meeting next week? Until then bears need to stay asleep it seems.

Another incredible move up by the bulls yesterday.  While I did believe we'd rally back up to put in a higher high I certainly didn't think we'd see it all in one day.  But here we are now back up at a double top and since hitting it yesterday we've traded mostly sideways until this morning.  Take a look at that pattern and you'll see a perfect "cup and handle" pattern, which suggests more upside yet to come when it breaks out.  Now, from the looks of things we might be trading sideways all day today to reset short term overbought charts.  There's the rising green trendline of support that will likely be an area for the bulls to bounce off of to fulfill the cup and handle pattern.

But it might not happen until tomorrow as charts are quite overbought right now.  The key for the bulls is to "not" break the rising green trendline of support.  A slight pierce is "ok" but they need to get back inside it asap to avoid a failed cup and handle pattern.  What I'd like to see is for that pattern to play out Friday morning with a quick reversal back down to still close out the day green but to also put in a topping tail pattern.  Ideally we'd see it come back down to rest on the rising green trendline into the close Friday.  This would be a very bearish pattern as I believe that support line would be broken over the weekend allowing a bigger drop to start as soon as Monday.

That's pretty much what I can see from the charts for today.  The market is very overbought and putting in negative divergences on many time frames right now, so another pullback is very likely.  Now whether we go up a little higher first and then pullback bigger is unknown.  Odds do favor a little more on the upside.  The cup and handle pattern could add another 30-40 points up if it plays out and matches the down move on Tuesday.  It doesn't have too of course but most cup and handle pattern do match the depth of the cup part when going back up.  Ideally we see a failure this time with less of a point move up.  It would show weakness for the bulls and the pattern would have only partially been successful.  I'd view it kinda like a truncated 5th wave up as it too shows weakness and exhaustion.

Anyway, my thoughts for today are that we'll chop around into the close where we should be hitting the green rising trendline of support.  Then Friday morning we should gap up from the cup and handle pattern.  From there I'd "like" to see a reversal back down into the close to rest on the green trendline again.  I doubt if SkyNet will give me this perfect setup but I'm going to watch closely for it just in case.

Well, it finally happened... a pullback!  It's been such a long rally up that I (and many others I'd guess) just fell asleep and expected nothing to change in the daily bull patterns, which were to gap open and grind slowly higher all day long.  But yesterday changed that pattern as the market reversed from the high to lose about 40 points before finding support to bounce at.  It's been a very long time since we've had a correction like that but it was very, very overdue with overbought readings as the highest levels I've seen in almost forever.

So, what is it and what is coming next?  To me it looks like it was a sharp wave 4 down of some degree and we still have a wave 5 up yet to come.  I say that based on many things but the most obvious is the lack of any negative divergence yet on the 60 minute chart and longer time frames.  It tells me that we are going back up for another higher high to "hopefully" put in that negative divergence and end this super long rally.  As traders it's hard to make money in a trend as we need both up's and down's to trade.   So this non-stop bull rally has only benefited the investors as most traders just stepped aside or got killed trying to short it.

Anyway, for today I think we are starting the first wave up of the wave 5 as I think it will subdivide.  If this happens then I think weakness will settle in and the bulls will finally the bears a chance to run with the ball for a few weeks.  But if the bulls grind up all day today and tomorrow without any dips to subdivide the wave up then the bears might be best to go back to sleep as yesterday would likely just be a one day wonder not to be seen again for a long time.  It's really too early to know but the bulls have been super strong and unless they show some choppy action over the next few days it's unlikely that this rally is done.

Yes, the market is very, very overbought on most all longer time frames, but no weakness via choppy subdividing waves up means this was just a quick drop to shake out some bulls and get some bears short to squeeze higher.  Believe me, I'm as tired of this rally as the next guy but right now I just don't see any real weakness in the charts to support a multi-week correction.  That's my thoughts for today... a slow grind up is bad for the bears, as they need choppy weakness the rest of this week to suggest a top is in for awhile.  The bulls are still in control and just riding inside the rising channel, which until that fails there's no weakness in sight.

The bulls continued to run yesterday and into afterhours but this morning they have taken a breather it seems as they peaked out around 2776.25 earlier and have now fallen back some.  I'm not sure what to make of it as gravity just doesn't seem to exist for them.  The market is becoming as crazy as the bitcoin rally!  I've re-drawn the green and red trendline to show the rising wedge we are in now.  From the looks of it the most it could pullback this morning and remain bullish is the rising green trendline around 2760 at the open and rising about 5-6 points by the close.  But today's a Friday and next Monday is a holiday, so odds are good that traders will leave early today to enjoy the 3 day weekend, therefore I wouldn't expect much downside today, and I certainly wouldn't expect the rising green trendline to be broken.

The only good news for the bears is this early morning pullback is showing some weakness on the bulls.  Now if the bulls can rally back up early in the day after the open and then reverse back down throughout the day toward that rising green trendline, and close down a little then it would show weakness during normal market hours too... and that's the real test in my opinion as premarket moves really aren't that foretelling.  So there's some hope for the bears.  Not saying that "if" this all happens today's the top but it could end up being the short term top before a decent pullback of 50 points or so?  But more then likely it won't be the top but just be signal that one is very near, like sometime next week.

This is all just speculation until it happens.  I will add that the 6 hours MACD has peaked, dipped, came back up, and trying to dip again... meaning it's putting in negative divergence.  Anyway, other then that I have no opinion on the market today.  Looks like it's trapped between the rising red trendline of resistance and the rising green trendline of support, and there's not much wiggle room in the middle.  Have a great weekend everyone.

A little weakness in the futures this Monday morning but not much. This is too be expected I guess with such overbought condition right now on the short term charts.  The 6 hour MACD went to the highest level I've seen in a long time hitting +12.8 before peaking and turning down a little like right now.  But the wave up last week was a strong one and it's not likely going to just rollover here and start some big move down.  This appears to me to be part of the topping process that should take several days to unfold.  There's not even any negative divergence setup yet on the ES Futures or the SPX cash.  So another higher high is likely before any real move down gets going.  For today though it's looking like it's going to drift down a little and do it's choppy dance of consolation while short term charts that are super overbought reset to neutral.

This might take several days so I'm not excited about trying to play this move as I doubt if it's going to be deep enough for me to risk shorting it.  I'm still thinking we'll have a top of some importance this week, (not "the top" for the year) that can be shorted for a nice correction into February or even March.  And I'm thinking Thursday the 11th has the best odds for that top, but I'd take it on whatever day it shows up.  But for today I see nothing but your typical boring Monday movement.  I'd be shocked if we make it back to Fridays' level around 2725, as I'm thinking we'll be lucky to see a 10 point drop, let alone double that!  But if we can turn back up today and close about flat (meaning a little down or little higher) I'd then say it's possible to see that move down to Fridays' range tomorrow.  But I still don't see it as the start of our correction.  A higher high is needed first in my opinion, as I want to see negative divergences setup everywhere before I'm going to go bearish hard.

Looks like this move up this morning is some kind of 5th wave from the low last Friday.  Hard too tell for sure but the pattern in the MACD "peaks" is looking more and more like it's setting up for a down move to start around the middle of next week.  The pattern is basically where they get it buried down to the -4.0 area, then blast up past the zero level to +2.0 to +3.0 zone before doing the first dip down.  Then back up again for a little higher peak in the +3.0 to +4.0 area, dip again and back up for a shot at another higher peak.  But when the last peak fails to make a higher high and makes a lower one it's a sign that exhaustion is setting in and a pullback is near.

Generally they will do a quick drop first to shake out some bulls and get the bears short.  Then they squeeze those bears with another rip back up to "try" and make a higher high.  Sometimes it's a lower high, and sometimes it's a double top... but they shot for running the stops above the prior high so most of the time they do get that "slightly" higher high.  This pattern has been repeating a lot I've noticed.  It varies a little of course but when the drive the MACD down to the -4.0 level there's a rip back up that follows usually the next day.  Anyway, from the way this market is setting up I think we'll get that down move around my turn date of the 11th.  I need to see that first pullback Monday to lure in some bears and then a rip back up Tuesday/Wednesday.

It should top out Wednesday by the close I'm think or Thursday morning...  not sure yet.  But it's looking good for this rally to fizzle out mid next week and a pullback of start.  And I mean a pullback that can be played with the expectation of making some money on the short, not this 5 or 10 point dips.  If all goes well we should be retesting the 2680-2700 level with this coming pullback.  So, if we have that first shakeout move down on Monday it should be bought up by the "buy the dippers" and another slightly higher high (again, it could fail and just be a double top or slightly lower high) should be the last move up on this rally from last Friday.  That should happen either Wednesday by the close or Thursday morning from what I'm currently seeing in the charts.  Have a great weekend.

I thought we might have that small pullback yesterday but the market is too strong it seems.  Today we are up again and I'm still waiting on a tiny move down before another move up into mid next week where I think we'll have a bigger move down start.  This market has been extremely hard to forecast as it seems to always go up with never more then a few points on the downside.  It's not healthy going so long without more then a 3% correction.  Anyway, I'm still looking for a small move down today or tomorrow and then back up next week.  There's still room on the 6 hour chart to go higher as its' MACD is still pointing up strongly with no briefly dips in it.  This is why I don't see it topping out until next week some time.

From an elliottwave point of view this move up is probably some kind of wave 3 as it's been very strong.  So basically I'm looking for the small wave 4 down and then the wave 5 up to end this series of waves.  If we can close up again today without any small pullback intraday then possibly we'll get our wave 4 down Friday from some news release (like the non farm payroll report?), but again it's not expected to be much.  Maybe 10 or 20 points?  Logically the support on the downside is the 2700 area so if that zone is touched I'd look for it to hold on the first hit and bounce back up from it for what most likely will be the start of the 5th wave up.

It's possibly (but unlikely) that the move down will unfold in an ABC pattern instead of one wave, which means it could hit the 2700 support area on the A wave, bounce up for the B (which could fool people into thinking it's the wave 5 up) and then down for the C wave to pierce the 2700 area a little thereby taking out the stops on the bulls that went long at that level with stops below.  I tend to think that scenario has low odds as SkyNet seems to love the bulls and rarely runs stops on them, but instead squeezes the bears day after day after day.  Nevertheless I wanted to point that out as a possibility.  For now though my thoughts are that we'll have a weak move down tomorrow that will be a wave 4 of some degree and then back up next week for the wave 5 and another higher high.