Markets' best trick tomorrow may be holding a pattern that "goes both ways"

The equities markets remained above the channel support that I marked and showed here yesterday. I've summarized most of the pros and cons in my posts here over recent days. The Nasdaq appears stronger, even though today's slump in the biotech sector disappointed me, as the semiconductors were strong. Keeping it simple, we expected upward movement this week, despite the gyrations yesterday and today; and it will take a breakdown - or out and up - to confirm either a bearish or bullish count. Some indicators remain positive, while negative divergence is showing in others. Then there are the VIX, dollar, and Treasuries in various positions of trying to confirm lows. There's a way of looking at all this that says, we're seeing a timeframe that should see upward movement in equities, euro, oil and gold, but it might be short-term or result in a failed effort that rolls down to lower levels. It is common for markets to close before a weekend or holiday in a way that doesn't confirm either way. So we might expect to close tomorrow without being certain.

Don't forget Friday is the day before the Independence day holiday. Friday's a US market holiday too. So tomorrow may be a good day to assess and make sure to be poised for what may come next Monday.

I may as well add - despite my discussion of seeing both sides of a trade, and alluding to the great work by various analysts who are putting forward scenarios that differ right now - some more bearish, some more bullish for the path from here - I do adopt a point of view for actually trading and "testing" the markets. I usually call it trading according to a hypothesis - that way I don't feel like I'm married to or biased according to one forecast. The hypothesis that I'm currently using for my actual swing and shorter-term trading, is that Tony Caldaro's Objective Elliott Wave count is the right way to see the equity markets. Then I use information like Andre Gratian's work with technical analysis, turning points and projections, and the cycles forecasts from ChartsEdge, to fill in nuances of where the market is likely to actually "step" day by day in fulfilling the Elliott Wave count. It doesn't mean I ignore work like Terry Laundry's T Theory - quite the contrary! It's just that, in order to actually have my own participation in taking short-term or swing positions, I work on this hypothesis-testing basis, and remain aware of information that can corroborate or negate the hypothesis.

All a long way of saying, it seems to me that those who did the "buy on Monday" idea for a swing this week, who are still up despite the volatility that appeared yesterday and today, might be interested in TMAR (take money and run) tomorrow, given that there's definite risk that today may have topped a wave 2 with the markets rolling over next. My title for this post suggests that we may not get confirmation of wave pattern (bullish OR bearish) with the intraday movements tomorrow. It's really a matter of how one chooses to trade - either TMAR and then take the markets as they manifest on Monday; or accept the risk that there can be a big movement coming after tomorrow, on a gamble that a big move may - or may not - be in the direction you're looking for.

In any event - we'll see if the overnight futures hold the 916 (and if lower, 912) levels for support, and then see how things shape up tomorrow. As always, be careful out there, and happy market navigating!