More waiting as sideways action is still on the plate. Currently, it looks like a mini Elliott flat which the S&P should see higher prices to the next level perhaps 1420. Personally looking for at least a pullback to the 1390-1396 range before considering a commitment to the long side.
With all the overlapping waves down, a DeMark setup on the Russell 2000 never applied during the down turn. However, the second phase of the DeMark sequential is “technically” there. Today should mark the final 13 count to the upside but the count lacks confidence and it is only labelled as a formality. In this case of breaking the rules, the Russell 2000 just had a near 14% move down and missed a full- on nine count by one day. The next day produced a bullish engulfing candle off very oversold readings. It makes sense to ignore the 13 count.
Through many hours of observing the markets, one short setup is fading the news. Today a cluster of economic stats were released 30 minutes after the open. The market was going through a daily consolidation so there is no reason for the markets to make a major move at this point. So when the SPY ramped higher prior to the release, it set up a nice pop and fade and that’s what exactly what it did. This behaviour is pretty common and can be applied on the downside as well.
Short term consolidation is tight. A move higher would not be surprising. Current expectations is a move down which can be bought possibly at the 1390-1396 area. Looking for a quick 1-3 day washout move down. Besides the obligatory intraday trade, portfolio stays in neutral for a second day.