The Market Pulse

In yesterday's video edition of Heard on the Street, I showed this chart and mentioned that I believed that the market would take out the shorts who had placed their stops just above the minor w.4 crest of 1229.75. The chart is updated through today's trade and to the untrained eye it appears that my analysis was incorrect. 

Yet, sometimes the daily session isn't enough to provide the entire picture. Sometimes we need to watch the globex session and or the Cash to gain insight to what's really happening. Notice from the above chart that the "all sessions"  DID print above the w.4 crest. In fact, it did so on the ES_F 240 min chart level (not shown) within the 8:30 am price bar.

While the minimal requirements have been satisfied to complete w.a circle, there remains the potential for further upside. A loss of 1185.25  (see first chart) would increase the likelihood that w.a circle had completed and that w.b circle is underway. Likewise a print beyond 1221.5 (ES1-057) or 1330.75 (ES_F) would mean that w.a circle was still subdividing and reopen the case for the 1242-43.

At the 5 min chart level, today's decline looks to be in three waves and what I have labeled as w.(c) has a shallower slope than w.(a).... that's corrective! So I won't be surprised to see some type of retracement either in the ON session or in tomorrow's trade. 

Let's leave it there for tonight and see what develops.

Best of Trading