Distinguishing Wave Personality: ObamaCare, US Economic and Eurozone Crisis

Today is an important day for world markets. While European regulators and PM's struggles to save Europe, here in the US, the Supreme Court rules on the constitutionality of ObamaCare. 

I personally will not be trading today. It's gambling and too risky. However, the chart above is just a possible scenario that I am watching today. Note that the opening print is 10am. I sometimes use this chart configuration to remove noise from the ON session and open. 

As you can see, this is somewhat of a different count from my last update where I was looking for a 4th wave. That 4th wave count still remains viable (see chart below)  BUT I'm showing this chart because often, the personality of waves can somewhat help you confirm your wave count. With two counts pointing down, the only way to confirm which count is correct is to look at the personality of the next decline. From the top chart, ff the most recent advance to 1328.5 was indeed w.ii circle, then we should see a swift and massive decline over the next few days that easily exceeds my target of 1295.75 (see chart below). 

I hope you found this post helpful and ...

Best of Trading

The Market Pluse: An Interim Report

With two trading days in the books, heavy selling pressure has finally eliminated the alternate bullish running triangle interpretation for the Emini SP. The key area of critical support (1252.25) has been decisively broken leaving only bearish interpretations.

While today's close was fulfilling , in that the 2007-2011 analogy continues to provide a road map for anticipating where the market is headed, I would be remiss to inform readers that post pattern behavior is really important. The following chart is one of the two bearish interpretations. Where w.e actually ended is not locked in as of yet but it's really not required for the discussion below. What is, is the break of the lower boundary line and w.d.  

What I mean by post pattern behavior is that price has just broken out of a triangle and subsequent price action should confirm the pattern i.e. prices should swiftly decline in a thrusting manner with a minimum measured move in length equal to the widest length of the triangle (w.A). That would imply 1219.25 yet further potential exists to 1166.75 if you're viewing the pattern as a classical H&S. Should price action not react as the pattern implies, then something may be wrong with the analysis or the count itself.

Keep in mind that trading is like playing pool. If you've ever watch great pool players, they set up the table for their next shot. That's what we're doing now. First confirming that the analysis is right, then aligning with the trend.  In the coming days we'll eventually see a counter trend move that should be a great set up to ride the trend in the largest move down.

Tomorrow we have the jobs report. Given the dreadful economic news of late, a bad report could cause more technical damage to the market. We'll see what happens.

Best of Trading