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Mup and Mu, please share your thoughts on the way I have labeled this YM chart from the Dec. 11 high. My labeling has wave II of C much smaller than wave IV of C... some uncertainty there.

S & P trade update.... buy stop moved from just above Tuesdays high to breakeven(1514). Target is still 1350, when we trade down to 1416 I will trail a sell stop 29 points from the lowest low. This sell off from last Tuesday has the look of a "C" wave... the retracements have been very shallow.

Landis, I can only assume that you disagree with my count because of the lack of alternation between the A and C waves. At this point, I dont think anyone will dispute that the rally from the Nov. 26 low to the Dec. 11 high is 3 waves. I have labeled the decline from the Oct. 11 high as...

Here is an update to my trade setup from this past Tuesday morning. My buy stop is still just above Tuesday's high. I will move my buy stop to breakeven(1514) when the market trades at 1441. My target is still 1350. Here is my trade setup... I have labeled the decline from the Oct. 11 high...

Thanks Mup.... you have the unique ability to find some order in chaos!

Attached is a weekly chart of the S&P... if we close on Friday below 1460 a "key reversal" on the weekly chart will be triggered. At the time of this post we are only 12 - 13 points above 1460. If it occurs, it would be a very bearish technical signal!

Mup, I would never put this trade on before the Fed announcement... my sell stop would be a good 20 S&P points below the market when the Fed makes their announcement. As I write this reply the market is selling off on very heavy volume... short from 1514 on the March contract with a sell stop...

Here is my trade setup... I have labeled the decline from the Oct. 11 high as wave 1 and today's high as wave 2 completing an A-B-C correction of wave 1. My trade would be to short 2 March e-mini S & P contracts at 1514. A decline below 1514(end of wave 4 of wave C) would be my confirmation...

Here is Scenario 2 which is labeled as an impulse wave from the Nov. 26 low.

I have 2 Scenarios that should spark some interesting discussion. Each chart shows the trading in the Dow e-mini from the Nov. 26 low. The chart attached to this post is labeled as an A-B-C correction from the Nov low. Mup, Mu, and Landis... please share your opinion!

Mup, flipping the chart is very interesting. Tell us more about Lindsey's theory and does flipping the chart imply that we should look for a retracement from todays high and then a rally to new highs next week?

Thanks Landis Attached is the scenario 1 chart... notice how todays high in the S&P parallels the wave IV high as I have labeled it. It has been my experience that the IV and 4 waves often peak at similar(1489-1490) price levels. It is possible that a wave 5 decline is in order but Mup...

Scenario # 2 assumes 5 waves down were completed this past Friday and the market should continue to rally over the next week.

Here is scenario #1 my preferred count because the timeframe to form wave #2 is now equal to the timeframe of the wave I have labeled 4 and this weeks rally has stalled at the 38.2 retracement of the Oct. 11 decline.

Landis, a Fed rate cut will hammer the dollar and have little impact on the stock market. The rate cuts in Aug. and Sept. provided a psychological boost to the stock market but did not help the credit markets. After the last Fed rate cut(10/31) the Dow sold off 1100 points.

Mup, your diagonal was right on.... that was great analysis/work! The latest "beige book" was just announced with bearish housing and retail projections... if the market can continue to rally with this news, even I will get positive on this market!

Make or break right here for the market... S&P has slightly exceeded the .618 retracement from the 11/14 high. The move higher or lower from here should be volatile!

Extremly bearish wave count is right on. Today, the Russell 2000 traded below its August low... I expect the Dow to be trading near 12,000 within the next week!

Landis, I personally would not use the divergence between the Dow and Transports to avoid the rally from the August lows but to be aware of a major high at the Oct. peak when the divergence was extreme. You are wondering if the divergence between the Dow and the Transports is still valid...

Here is the second chart... notice how the Dow and Transports were side by side at the July 07 peak but the Transports diverged with the Dow at the Oct. 07 high. The divergence was extreme and history tells us that large declines occur when the two averages make an extreme divergence. The...