Exhaustion gap open due to options expiration may have completed the rally...


Today was options expiration for the June contracts which caused a price gap higher on the open. The gap up open was immediately filled making it an "exhaustion" gap. The decline through out the day formed a small impulse five wave structure that took out yesterday's low.

In yesterday's video we showed how a possible "triangle" was forming for wave-b and that if it was a "triangle" we would see a small move higher as wave-c to complete the wave (ii) correction. It appears this is what the market did!

We've labeled the small five down today as "micro" [1] of "sub-minuette" wave-i. If this is what the market is doing then we should see a gap down Sunday night and Monday morning for wave [3] of wave-i.

If this is what the market plans to do we will see price form a larger five waves down below the previous wave (i) low and finally break and over-lap the top of the previous wave [a] high. If all of this happens next week it will increase the odds to help confirm our "primary" count.

If the market can't follow this pattern down and break support at 2936.75 (new price for Sept contract) then we will see the alternate wave 3 higher unfold.   

Next week should finally see the markets tip their hand and commit to new highs or a total breakdown.

 Follow the Trend
and
"Trade Safe"

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