Wednesday 9/8/10 wrap up

This market continues to be marked by a lack of volume and thus participation.  The explanation in August was summer vacations, but we're now past Labor Day and still weak volume, I suppose that will be chalked up to long Labor Day holidays.  Actually, the better explanation is lack of interest in equity investments, which should reflect in lower prices at some point.  Which means we should see the recent magical levitating act come to a sad end.  I say should, never forgetting that this IS the two ton elephant that will do whatever it pleases.
      Enough of that.  The near term bear case is suspect at this point as a result of today's action.  It was pretty clearly a 5 wave pattern up that took the better part of the day, and in Elliott Wave 5 waves usually occur in the direction of the underlying trend, the exception is if they are the "C" leg of an A-B-C correction.

 A bear count can be had out of the price pattern of the last two days, but it looks a little awkward and requires the action since Tuesday morning to be labeled as a (very) irregular flat.  Stranger things have happened, but it is a bit awkward.

 
The bull count says we completed a Wave 1 up overnight Mon-Tues and the down stroke into this morning's lows was a triple zig-zag Wave 2, with the 5 waves up today a subwave 1.  A little more plausible from an Elliott standpoint, but hey, again, this IS the two ton elephant.

At some point we will break out of the primary trading range of recent months.  Top of the range is around ES 1129 and the bottom is around ES 1037.  My guess is whichever way we break out of this range it will be with some power and probably mark the start of a sustained trend in that direction.