ONE MORE PUSH HIGHER?

This is what I kept asking myself on the last part of my race, but I will talk about that later. With the continued sideways price action of the market over the last few trading days, the probability is getting stronger and stronger that we will get one more push higher to complete this "C" wave of the bearish ABC pattern that I showed you in the last posting. This last move up could reach the 50 day MA which is currently around 1140 on the S&P 500 (1139.15 to be exact). I bought some call options on Friday morning (before I left for my race) in order to try to take advantage of the expected short term move up. If the market opens near its Friday close, you could try to get into some calls for a short term play. This would be a very short term trade. If the market gaps up on Monday, don't try to chase it with any bullish trades...especially if it is close to its 50 day MA. If it gaps up on Monday, wait until this last move has completed and the market starts to turn down. The key signal will be a spike in the VIX. If this happens, you can do one of three things depending on your level of risk. 1. You can sit on your current positions and wait until the move down makes them profitable. 2. You can buy more puts (once the spike in the VIX confirms the sell off) and make money on the move down. 3. You can hold onto your current positions and add to them when the S&P 500 drops below 1040...which was the original point that I said to add to your position. In Elliott Wave analysis, you often come up with a Primary wave count and a few Alternative wave counts. The original call for a move down was based on a Primary wave count. That is why I encourage the students to get into bearish trades and take advantage of the move. Since then, the market has followed the Alternative wave count which allowed for a longer correction process. Both counts point to another big move down, but the Alternative count required a bit more time to get there. The problem is that you can't know which count is playing out until certain rules and levels get broken. This can sometimes test your patience. I don't place all my faith in these wave counts. I will also look at other contributing factors that might either back up the wave counts or possibly show other possibilities. What I have said all along in this bear rally is that the conditions haven't yet showed me that the market wants to go higher. In other words, it hasn't shown me that this rally isn't more than just a rally within the downtrend. Many of you might be impatient, frustrated, or even mad at me because we haven't had the move down yet. I'm going to ask you to trust me. Not to trust me that the market has to go down...no one can perfectly predict the direction of the market. Trust that I have analyzed the probabilities correctly and that those probabilities point to another big move down. If my analysis proves to be wrong and the market reaches a new 52 week high, I will gladly accept your wrath. If I prove to be correct, I expect your apologies for doubting my ability to read the probabilities of the market...and I'll expect that vacation to Hawaii so that I can recover from this race I ran this weekend. By the way, the race was fantastic. It was from Logan, Utah to Park City, Utah...188 miles (no I didn't run all 188). I ran about 15 miles in all (three different relay legs). My last leg of the race was a 4 mile run up the "Ragnar" hill which was a rise in elevation from 7,233 feet above sea level to 8,864...which is the top of the Dear Valley resort for those of you that have skiied in Utah. That's 1,631 feet in 4 miles! Yea, it was tough and yes, I did end up walking part of it. I can barely walk today and I'm sure it will be worse tomorrow. I've had a bad foot injury so I wasn't able to train as well as I wanted to. I got a cortisone injection on the morning of the race and just toughed it out. We finished the 188 mile race in just over 33 hours. I will say that the race route is one of the most beautiful in the world. If you ever want to take a fantastic scenic drive when you come to Utah, look up that race route using the web address I gave you in the last posting. Let's have a great week!