The last time that we spoke I left you with the following chart where I laid out a possible scenarios for the termination point of w.ii.
As it turned out, the swing high was actually struck at 8:30 EST Tuesday morning at 133650 in the front month contract. If you were only watching the continuous contract, you may have missed a great opportunity. That's why its so important to look at the combined session, the front month, day session and the back month contract. In doing so, you'll always be way ahead of other traders.
Volume rose on the NYSE, logging yet another distribution day (marked by the red arrows)... the fifth since February 1, 2011. When institutions start heading for the exists, you don't want to get in front of that freight train as any profits that you have will be decimated quickly. Astute traders know that institutional buying and selling can be determined by evaluating volume. I first made mention to the fact that institutional selling was present in early 2011. For more detailed information on identifying tops and that post, click here.
Case in point, if you were long from 129250, your gains were cut by 80% in a day!
As of the close of today's trade, the market made an initial move up that was weak in my opinion and then chopped around in a sideways fashion. My preferred count for the market is given where w.iv of w.(i) is unfolding. My immediate downside target for the completion of w.v of w.(i) are 128988-129875. Also note that the 1.282 and 1.386 RF (not shown) of w.iv lie between 129725-129825... so odds are that the 129725-129875 level is a logical are for w.v of w.(i) to terminate. Should that level fail to provide support, then the next level is likely to be achieved.
My alternative wave count is that w.v of w.(i) ended and w.(ii) to the upside is unfolding. This can best be seen on the chart of the $SPX. Given the markets wave structure, I would find it difficult for the market to retrace beyond 131734 in the $SPX and 131675 (the equivalent in the ES_F) before resuming the larger degree trend down.
I hope you found this update helpful and best of trading.
My alternative wave count is that w.v of w.(i) ended and w.(ii) to the upside is unfolding. This can best be seen on the chart of the $SPX. Given the markets wave structure, I would find it difficult for the market to retrace beyond 131734 in the $SPX and 131675 (the equivalent in the ES_F) before resuming the larger degree trend down.
I hope you found this update helpful and best of trading.
Larger rally than expected in ON session to 1321... the .618 retracement of the most recent decline from 1332.5. Looks likely that the alternative count provided prevailed UNLESS the market would open below 1313.75 to keep an possibility of the triangle viable.
ReplyDeleteBest of Trading