We did not get the three wave correction as I anticipated, but we did get a Narrow Range Day or a day with a smaller range than the last few days. We also got a double bottom late in the day, with the market currently (AM Wednesday) trading above Tuesday's low. The market was weak, but there was no high volume selling to drive the market substantially lower than Monday's low. The ES market is currently testing Monday's low of 1422.50, which may act as resistance unless the market trades above that level, which then will make it support.
The FOMC Meeting Minutes will be released at 1400 ET. The market may go crazy at that time, depending on what is said in those minutes.
Thought that I would add a chart about Tuesday's Market Structure. Trying to guess where the market bottom will occur can be a costly exercise. I for one am usually too early when I try to guess that the market has bottomed, and have to experience either a loss or some draw down pain as I hold on to my early positions. It is better to wait for the market to show signs of reversing before jumping into the fray. All day yesterday, the market continually made lower highs until the very end of the trading day. And then according to (Frank Tubbs) Tubbs's Swing Rule, expect the market to move upwards above a previous high pivot as far as it had traded below the pivot. And then according to his Law of Proportion, expect the market to retrace 1/2, 2/3 and 3/4 of the previous move.
Charles
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