Market has no patience

Its quite interesting seeing the overnight moves here - it seems the market has no patience at all. Generally when looking at corrective moves to absorb sellers and flatten out overbought conditions - the market will spend a minimum of 30% of the advance in terms of time going sideways, generally its even more. Look at the market here? barely even one day as a breather before wanting to continue.

Ok quite important today. USD yet again taking a beating which is helping the futures move higher as we speak. So the question we have to ask ourselves - what kind of move should we expect, how can we profit from it, and how do we protect positions (if you are short you are scared, if you are long you may want to look for a hedge or partial exit).

Initially I had given a high probability scenario to a failed 5th wave, meaning a marginal new high on SPX. I still believe this to be a high probability scenario - however a few things are going against it. One we have light volume and we have to deal with lots of stops just around the 1100 range - once those stops get hit, well you know what happens with all the short covering.

Its 4:15AM now, so we have a bit of time left before cash hours but I do not expect any strong reversals - remember our definition for a stepping day - 1% GAP will set the low within 15 minutes 2-3 points off the open and the first morning high within an hour of the low. This has worked like a charm the past few times so we have to watch this again today.

So what are my scenarios ... start with the lowest probability one.

1) no new high or high at open, sell off at cash hours open - well this to be honest should not be happening today. We have nothing going for this move, limited economic news, forex not indicating any type of reversal

2) failed 5th wave, marginal new high - this move should set the high before 10:00, most likely by around 9:45-9:55 at price levels close to 1107-1110

Now regardless of how high we may go, the close price in comparison to the open will become very important - if the close will be set below the open price. We have a high probability for a reversal - but lets not dream up a bear case here and go for our last, to be honest, most probable scenario.

3) stepping day with a close towards the high of the day on lower volume. For a move like this, we should be expecting a minimum move of 1110 most likely higher. Remember the chart from 2 days ago for our W5 targets.

Will post more updates before cash hours depending on pre-market action, but do not expect much of a change here.