Not wedded to a wedge, but looking for more upside in equities this week

Did that fishy carp still have some holes in it, or what?! I tweeted this morning to keep it light and tight, which was one good way to navigate the fast jump high and then the rollover that ultimately made a new low. I checked Tony Caldaro's OEW update at his site (links and feed at right), and have copied his chart below (thanks Tony!). The wave structure intrigues me because it looks similar to an almost-completed wedge on the last set down. That suggests that either Tony's marking is right - and hey, I think he almost always is! - or if there's one more little low tomorrow, it should be bought as the last bit down for a wedge.

Now, I'm not recommending micro-management of intraday trading. But it's useful to have the wave pattern construct. Going into the Fed, especially! So we've got reasons to look for more upside as this week progresses. The DJIA even did a (hard) test of its 50-day moving average. So, Chicken Little, the sky isn't falling - yet!

I'll admit that I'd expected higher levels for the 4th wave as well as having it take more time, so that's a reason why I harbor the idea of a wedge for the 5th wave down to complete the "wave 1". After equities slammed so high so quick this morning, it was odd because the move up happened "too quickly", leaving it ripe for fading. So it dropped and I'd tweeted to look for suppurt about SPX 1037/1042. It fell under, hence a resumed shorting event for those still in the turret. Then dropped to Andre Gratian's projected 1030. Those who may have played the intraday reversal from that managed to catch another 12+ points. Plenty of action in both directions!

With the Fed coming up, and positive divergence, it's reasonable to look for higher levels. Then after some more upside this week - as a "wave 2" should give a nice tradable rally and we can think about 1067 to 1082 or so - it's the "wave 3" down that you'll want to be short for (or just in cash), since a drop of, let's say 100+ SPX points (1000+ DJIA points) isn't something you'll want to experience if you're stuck long. Just an estimate for now but it's ballpark so stay sober following the Fed, folks.