S&P 500
Good Morning- today is series S4H slight iffy with the spill DOWN. Yesterday, in the literally heat of the moment, one material error of omission was presented: there is a SPOT at 2126.5.
Yesterday we came within MOE (margin of error) of the all time cash high 2134.72 (cash does not lie) @ 2132.82..More importantly as it goes to TONE, the ROC(rate of change) has diminished , volatility has abated, ranges in the RTH have compressed, and 2 other tells have appeared. (more)
We are seeing the ARCING required as a precursor to any attempt by bears to do something of value. The other thing we notice (and this also fits with the 5-min chart from Friday, the last full commentary) is that THURSDAY, FRIDAY, AND YESTERDAY all produce POP DROP GRIND(up) moves and these days have given BEARS on the nano/sardine level more heartburn than any other aspect of trade since the 1074.77 cash low Oct. 4, 2011.NOTICE the 3 RTH RANGES since the last Greek Gap Thursday blew out the 2103.5 CONFIRMED flipping the larger lean. They are: 7.2. 6.4, 8.4 handles. In ranges this compressed the GRIND up portion of the pop drop grind scenario produces oscillator ‘divergence hoaxes’ in the sense that pullbacks may occur but they go nowhere of note until a ‘clean 5 waves up ‘ at micro level can be counted.
Yesterday for example we had a 1.5 handle drop from 2123.5 SPOT to a lunch low of 2122 , whereas the pop-drop portion to the a.m. low went 5.5 handles.
This may seem paradoxical, ‘we have the precursor to a decent retrace’ and ‘i keep taking little wounds in the grinds of the pop drop grind’. After all we have rallied 89 fibbo handles but only 14.2 have come since the LOD Thursday.If you look at the commentary and 5 min chart from last Thursday and Friday you will see the target for the 5 in a rectangular box and notice the EXTENSION the Bulls needed to exceed that box. I have left that in today’s iteration and placed a green thick horizontal isolating the HIGH for the Friday opening. That high combined with the late day rally on EXPIRATION (no walk away trade) were TELLS of possible extension. No one wants to miss the correction if they believe a double digit drop is possible when sardinging but they don’t want the multiple small losses trying to fade the GRIND that reduces the ROC and forms the ARC. These grinds will reduce your entry risk exposure by nature BUT you must be prepared to exit quickly if your short is not producing results fairly fast or stalls after 1-2 handles. In other words get your position to BE (break even asap).
by William Blount