The Market Pulse

In this weeks edition of "Heard on The Street", I laid out a bullish and bearish forecast for the S&P with the expectation that the index would have to fall hard today in order to maintain my bearish stance.

After the opening bell, the market quickly turned tail and sold off  on higher volume. That's another distribution day where institutions were selling. The lower boundary of the Elliott Channel also gave way bolstering the bearish case. This was what I wanted to see and is typical of third wave price action.

The clearest wave structure can be seen in the S&P cash, rather than the E-minis. A series of 1-2's has developed but I would like to see a further decline whereas price breaks critical support at 1294.26 or 1292.5, the equivalent in the ES-F. Until then, the alternative count remains viable. Likewise a break above critical resistance at 1332.28 or 1332.50 in the ES-F, would signal that the alternative count would become the preferred wave count and that price would make a new recovery high above 1343.

I hope you found this information helpful.

Best of Trading