How yesterday may have unfolded.
The Bernanke testimony before the Joint Economic Committee, U.S. Congress had traders on the edge of their seats. At the time, I tweeted, "Spirited trading today" and the bulls were pushing the market higher. Possibly they drank from the punch bowl that Bernanke had spiked so many times before and it tasted different.
Approximately an hour later, the breakout was in jeopardy. When the 240 minute bar closed, the message was clear. The breakout failed. Fittingly, Martin Pring describes this intraday pattern as a Pinocchio Bar.
Initially, several Fibonacci relationships lead me to believe that an argument could be made that a five wave sequence ended at what is now labeled as w.iii circle. However, given the loss of 1646.5 in the overnight session and subsequent price action I offer this count. Confidence remains against the figure 1632.75.
Price has already advanced off the lows in what appears to be a corrective move. That's what we would expect if a a w.2 or w.b was unfolding.
While the sea may be full of red at the moment, it is in my opinion that a correction of the prior day's decline may be in order.
Let's see what develops.
Best of Trading
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