The wave structure that I had been working, shown above, the expanded flat was negated as the June 16 low completed a three wave structure. In my 6/28 post , I mentioned that it was necessary for the market to print below 1252.25 in order to complete a five wave sequence. It never happened, thus eliminating the expanded flat interpretation.
Turning to the intraday charts, today's session was dominated by Bernanke's QE3 comments. For now, I think he is just talking up the market but be certain that he will "pump and print" if needed.
Within moments of opening his mouth, Gold hit a new high and the USD was pummeled again. However, Moody's dropped a bomb on the Bulls "Risk On" parade by placing the United States' Aaa rating on review for a possible downgrade. By the close, the "Bernanke pump" had been erased.
While stating the obvious up until this point, the fact is that the market remains in a sideways trading range with wild directional swings. There's allot of noise right now so staying focused on singular waves can save you allot of pain.
Two counts that point down :
From the chart, the E mini SP appears to have made a five wave sequence from 1352.75 and have traced out a countertrend three wave affair that ended at 1327.75. Given the 5-3 sequence... at the minimum, another five wave structure MUST follow that could draw price to 1283.75.
Today's high could also be interpreted as w. a of a larger corrective pattern. Once complete , it will be followed by a five wave affair. It's to early to determine if this scenario will play out. Therefore, allow for the possibility of modestly higher prices before more selling pressure. A loss of 1295.25 would bolster the more immediate bearish view.
Best of Trading
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