I'm not gonna speculate much today cause of the Fed. All I know is that the market is and has been overbought for sometime. Of the last 29 weeks 21 have been up. Of the last 11 weeks 9 have been up. The market is up 61% since the March low (that would be cramming 6 years of average SPX returns in 7 months - so you can say that one month roughly equals one year at this pace). Of course as long as they continue to funnel funds thru the back door (and out of your pockets) into the market and as long as they continue to pummel the dollar like Wallstreetpro2 with a Louisville slugger the ramp job will continue to run.
I am looking for limited upside as the market continues to consolidate as it did in early and late August. I will be looking for the tell tale triangle to form as it has so many times before on this run up. Upside should (should) be limited given the position of the indicators and BB's on the 60m, daily and weekly charts.
/ES 10m chart - Clear wedge formation to the top of B in what I think is an ABC corrective (although weaker than most of us anticipated) for either wave 2 or 4 of C up. at this time I am not expecting a double zig-zag in this corrective, but I (again) would have thought this correction would have had some meat to it. If the wedge plays out a good target would be somewhere near the 1050 low.
The upper wedge line is good support. So is the lower trendline of the long channel up for either 1 or 3 of C. The best support is the combination of back door funds, the beaten down dollar and the cheer leading of CNBS.
GL Trading (you'll need it).
