The Market Pulse

Today's Market action confirms that there aren't many traders that think that the U.S government will actually default. As I mentioned in my weekly video, I expected weak hands to exchange contracts in today's trade. After the dust cleared, the market closed in the middle of the range leaving options on the table as to how to interpret the intraday price action.

If we examine a 20 minute chart, the wave structure counts as a three wave zig-zag affair that should be fully retraced. A print below w.B (1332.25) would confirm that a three wave structure unfolded that terminated at the w.c circle crest of 1340.25.

Even if today's three wave advance is fully retraced, the daily chart level remains a dangerous proposition unless the w.c low of  1252.25 is taken it. Should this occur, both the running triangle and running flat would be eliminated.

Often a tell that a top is either building or has already occurred is when the wave count and patterns do not follow the standard. Frankly, that's what I think is happening therefore, I'm sitting on my hands until the wave structure becomes clearer. We'll follow the daily price action compared to the 2007-2011 analogy for the bearish scenario with the understanding that the two bullish counts can't be extinguished just yet.

Tomorrow is another trading day. Let's see what unfolds.

Best of Trading