Market Update

The market gapped down at the opening to test the 50 day moving average again after the micro 5 wave count I was tracking yesterday completed in after hours. So the chart shows a truncated 5th and the gap down is possibly part of a micro B wave or maybe even a bearish W1. I think we will find out what the market really intends to do in the next couple of sessions. There is a Head and Shoulder's formation that targets 1664 and if the gap down today was a bearish W1, I have 65-70 as the target for completion. But first we'll see if the bears are able to break the 50 day ma, which I had been expecting the market to test when the correction started almost two weeks ago:

"There is a good chance the market will test the 50 day ma at some point during this correction so we'll see how this count evolves"

So this correction is technically going as planned so far. The one thing that I have to change is the assumption that 1729 was a peak of W3>W1>W3>LT INT 5, it looks better as a nested 1-2 as you can see in the Long Term Chart so the market should be working on a W2>W3>LT INT 5. There is also the possibility of a rising wedge so we'll keep an eye on that. For now I am trading according to the Trend Average, which has done a good job in keeping me on the right side of the trade.

Today I ended up buying Goggle at the 50 dma test and sold it back at the same price as yesterday for a quick buck. And I am back to cash waiting for either the bearish scenario to play out and load up for the bounce or just go back long at the successful break of resistance. If the Tea Party Republicans in Congress keeps fighting Obama, they could successfully derail the market for the rest of the year and even send the economy into a recession if the same thing happens with the debt ceiling. I wonder if these people who shut down the government actually get paid during this period.

Short Term Trend = Bearish

Medium Term Trend = Bullish

Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.