after yesterday's range expansion trend day i anticipate a range or consolidation day with back & forth price action (excepting headline related moves).  currently futures down about 7 points and should open arounf the lower bb on the 5min chart.  a push down into support should set up a buy.  strong support will come around the 30 min 20ema.

around 15:30(ET) yesterday the relentless creep up had a buy climax with 3 high volume bars pushing well outside the upper bb, setting up the only good countertrend trade of the day.

i apologize in advance to all the traders in the room who are well versed in this stuff.  i write this for the newer traders who are struggling how to incorporate wave structure into their trading plan.  many people bash elliot wave and say it doesn't always work.  the bashing is wrongheaded, but they are right, it doesn't always "work".  there are plenty of times where it works to perfection, and these are usually when it makes sense and the wave structure is obvious.  today was one of those days.

the am low was a climax in many time frames into key support on a higher time frame.  the market broke out from 1220-30 resistance ($ basis) and the low of the day was 1221.  broken resistance becomes support.  it was likely that this was an important low that would turn the short term trend up,  after the initial wave up the market retraced in an abc pattern right into yesterday's low.  the c wave was a 1.382 extension of the a wave, a common fib relationship.  as gann said many years ago the safest place to enter the market is the first retracement to a new trend.  price then had a long and strong move higher, an onvious wave 3.  i know matt updated his 5 min chart and labelled it wave 3.  here is where your elliot wave can project wave 4 and then wave 5 completion.  if wave 4 were perfectly symmetrical to wave 2 (the corrective waves) it would have reached 1231.75.  just above this level is the 20ema, an important support level on the initial touch and the central pivot below.  price reached 1232.50.  you could buy this on a limit at the ema, or wait for the bar to close and then buy.

as soon as price starts moving up you can then use the fib extension tool to project the wave 5 completion.  a climax at the completion level would be a great short.  wave 5 commonly bears a fib relationship to wave 1 (.786, 1.0, or 1.382).  by using common sense and an expectation of how price might unfold, there were numerous trading opportunities.

fater the sell climax into higher time frame support, as matt has pointed out, price rose in a classic 5 wave sequence.  catching the wave 3 high is not so easy, but wave 3 produced a momentum high on the oscillator as well as a first cross of the slow-line on both the 5 and 15 minute charts.  the wave 4 pullback was conveniently into the 20ema.  the 5th wave ended at a 78.6% of wave 1, which along with 100% is most common.

gap higher today not surprising after a sell climax at yesterday's close into the top of the open gap below & horizontal trendline.  professionals buying into the final ramp down with 15 min bullish divergence as well.  magenta bars on the 2nd chart are high volume, large range climax bars with a bar > 100k contracts.  gap open into a confluence of resistance @ R1 and the 5 min 200sma stops the price ascent.  support below at the 20 ema, central pivot, and gap close should we trade lower.

typical Z or consolidation day following a trend day.  looks like a b wave on the 15 or 30 minute charts.  1221.25 has been a swing high and a swing low

another view of the climax bar compared to bars over the past 2 days

same stuff over and over again.  large range bar into S2 (to the tick, buyers sitting right there), cyan color shows large contract players, ie institutional traders, 2 nd chart shows a 5 min bar with > 150k contracts and 3 bars closing below the lower bb.  same strategy i mentioned last week, expect a retacement of at least half the climax bar. now we are at resistance.

high volume climax bar w large contract players selling into the rise.  reached a measured move of the initial wave up to the tick.  most often trend day reversals occur in the final hour so there may still be another push up.

3rd push into the .786 w1 projection with a spike reversal bar.  as i've said on numerous occassions the best countertrend opportunity on a trend day is the 3rd push in price.  the measured projections of the first leg up (began fri pm session) gave resistance targets.  looking for another push higher, possibly with a climax.  we are obviously at a strong resistance area on the dauly chart.

we seem to be rising in a large 5 wave structure of the 10/20 1092.5 low.  the gap up on friday completed wave 3, we then retraced into the early pm session (1221.75) and then began the 5th wave up.  this 5th wave has subdivided into 5 waves with potential completion targets at the 78.6, 100, 138.2% of w1.  targets are also drawn in.  creeper trends frequently end in a climax

price creeping up.  tough to join in and tough to fade, divergences don't mean much with this kind of price action.  tried a short as price pierced R2 w 5 min, and 15 min divergence.  didn't go far.

usually provides a nice roadmap. ema is typically respected by the market, especially after a momentum high.  move up this am produced a momentum high and the cross of the cyan slowline above the zero line.  unusual to see the ema tested the same day, but price bounced off the 10/14 high just above the ema.

if this is correct "should" not overlap wave 1 low

yesterday the naz has a hammer off the ma cross, today gaps over the 200ema and now is printiung a black candle.

looks like some large contract buying down here, and the ym did not confirm the new low.  trading at the 2 day high and 3 day close.

each new high on the 60 min es was capped by a wave extension off the prior swing and macd bearish divergence,  hit that zone this am, divergence obviously not confirmed.  i'm waiting for a pattern i can recognize.

very unusual to reach the 50 this early in the session. has actually retraced to the 15min 20ema (of course 3:1 relationship).  breadth has been drifting down from its highs and the $ticks never confirmed the price highs.  all in all the pattern is suspect.  but maybe they'll come out with a rumor from the janitor in the building where sarkozy and merkel are maybe meeting.

divergent high into resistance zone off 10/18 swing high.  pullback filled out a bullflag  into triple support after the momentum oscillator makes a new high and the slowline had a zeroline rejection.  long at R2 with initial stop under the 20ema.

confluence of the central pivot and the 200 period sma stopped this explosion on a dime.  the length of the swing up exceeded the final swing down of the downtrend.  this is called a buy-anti and along with the first cross  of the oscillator slowline sets up a retracement buy, unfortunately the retracement failed to reach the 20ema.

hard to seek up with the idiotic headlines out of europe.  wonder if i could get one of those binary news feeds into my computer?

possible wave count off the top

Floor Traders central pivot (standard pivot level as given by matt daily-he usually gives the levels for the $ index)

after a momentum thrust down yesterday, the market went into a period of lateral consolidation.  the 1st test of the declining 50 period simple ma is commonly resistance.  this am that declining ma crossed the FTCP for a sale.  after breaking down from consolidation price produced another momentum low and first cross of the oscillator slow-line, making a retracement into the confluence of the 20ema & yest LOD ahigh probability sale.  we now have +diverg on the 15 & 30 min oscillators so taking profits quickly and have a tight stop on the balance.