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End of day post (Market Monitor down)

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With this afternoon's new high for the day it opens up the probability we'll see higher out of the gate on Wednesday. The first upside target is near 852 (two equal legs up from Monday's low) but I think that will not be a problem for the market. I think the next upside target area is 871-880 (2nd leg up equal to 162% of the 1st leg up at 871 and the downtrend line from November 4th is near 880). That would be the level I'll be looking to short the market because I think we'll either get a pullback or start back down in earnest, shown on this SPX 30-min chart:

[Image 1]

The dark red wave count calls for only a pullback from resistance in the 871-880 area while the pink count calls for another strong bout of selling. Therefore trying a short there, with a stop placed at the high as soon as it pulls back, should make for a good risk:reward opportunity. If it then rallies instead of sells off I'll look to get long on the next pullback (labeled wave 2 in dark red). If after getting short the market drops back down below 850 we'll know the stronger selloff is happening.

It was a whippy market today and that will very likely continue. When entering plays it's very important to know why you're entering where you are but more importantly where your exit needs to be and why. This market is killing participants who lack proper discipline in risk/stop management. Be careful.

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