Tuesday 4/20/10 wrap-up

ADDENDUM 3:45 PM CST STOPPED OUT OF SHORT ES

V Stoch peaked this AM and rolled over this PM.  Also, sell line seems to be bottoming at the trend support line.  Those two factors combined led to selling the long ES's from yesterday @ 1202 (for a gain of +18) and establishing a short position at the same level..  Stop is set @ 1208 (6 points, about 1/2 %).  If this read is correct, it will be interesting to see if we have a sustained down market where the sell line respects the trend support and the buy line drops below that trend support, which would be the reverse of the pattern seen in the rally up from the Feb 5 lows.  If however we rally from here and get taken out at the stop level, a pattern to look for would be a drop towards zero on the sell line accompanied by a divergent peak in the V stoch, where a short trade can once again be attempted.  As I write this, ES is strong after hours, looks like short ES will get stopped out.

From an Elliott perspective, this is either wave 2 against a wave 1 down from last Thur into Mon, or it's wave 5 of a broadening wedge top (the count labeled "alt" below.)  Either of these alternates mean a serious correction of some sort is in the offing, it's just a matter of whether it's immediate or a week or so out.