The chart presented tonight is a "best" interpretation of the wave structure that calls for selling pressure. It is also quite possible that other alternative counts are best suited and another high may be in order. We'll have to see over the next few days what the market has in store. In the mean time, caution is advised and position sizes should remain small.
Food for thought - Turning to the larger picture, the elusive, wave iii of 3 down, has not materialized leaving me cautious as if I smell a fox in the chicken coop! At the daily chart level, the market has meandered sideways for 3 + months. This is not the kind of price action one expects if we are truly in a third of a third. However, the larger count ( not shown) is still the highest in probability and should be maintained until such time as price renders us wrong. In the meantime, there is nothing wrong with looking ahead and playing "what if". Several possible explanations are available, although premature. Could we be building a triangle B wave that counts the decline from 4/26/2010 as an A-B-C structure or are we building a combination wave 2 pattern?
Bottom line is that the market will get as many participants on the wrong side before it tips it's hand. Let's see what unfolds.
Best of Trading
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