S&P Futures Setting up for Major Decline

The triangle count I posted earlier got crushed almost immediately after I posted it, lol.  But that does not change the bearish count overall.  This count makes sense from a practical EWP perspective, but does not from a purist fundamental EWP perspective.  The reason is that 2nd waves are usually sharp and deep rallies while 4th waves are usually flat and shallow affairs. This count above is opposite of that as wave (ii) is flat and shallow and wave (iv) is sharp and deep.  Although the count does not violated any EWP rules, it does contradict EWP guidelines for wave characteristics. But if I tweak the bars a little, we get a cleaner count in my view...

When using closing lines instead of intra-bars we get a much more ideal wave count.  Note that waves ((ii)) and ((iv)) are much more proportionate, and that the sharp rally late last week aligns nicely with 2nd wave characteristics (wave 2).  An alternate view of this count would be to replace wave 1 with A, and wave 2 with B.  Either way, wave 3 or C down will be impulsive, strong and probably quite deep.

The market action Friday was pretty bad for the bulls.  The market was very fractured with varying markets and sectors up with others down most of the day.  This type of "fractured" behavior often occurs at tops.  That type of behavior doesn't always result in in tops, but most tops do exhibit this type of behavior.  If the bulls don't come out strong on Monday and hold the gains throughout the day, I expect this market to resume its decline in wave 3 or C quite soon.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P Futures

The bears were in full control the last 3 trading days and shaved a huge chunk of capital from the markets. The bears have run out and short covering and "discount" buyers are in control. But make no mistake, the selling craze is not over.  There is at least one 5th wave to male new lows before we can even consider if the selloff is over or not. I'm waiting for the bears to regroup and getting ready to go short again since the larger trend is still down.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.

S&P Futures

Well that bullish triangle I proposed got scrapped quick.  The markets are in real trouble. We fell hard and closed in the lows Thursday and Friday, then today the S&Ps were down over 100 points in pre-market. We have been in a topping pattern for several months and so the rubber band has gotten real stretched and it now snapping back. Despite the market continuing lower in the foreseeable future, remember that the largest rallies have occurred in bear markets. So the bears need to be vigilant, use proper money management, and have strict discipline not to let greed over run your trading plan as those rallies will be fierce.

My target for S&P futures is the 1750-1770 area.

PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.