ES

ES finished the day positive, thanks to an eod push. Range was awful at 9.5 handles. Even worse was volume, completing the second lowest volume day of the year (1/2/09).

I have no clue where the count is. This [v] wave has been absolutely maddening to figure out. EWI says they "think" [v] ended at Friday's top, so we will go with that (they are as clueless as the rest of us).

It does appear that we completed a nice zigzag off of the 1016 H. Perhaps we get a double zigzag down to start off minor B.

It wasn't a surprise that price rejected, however temporary, at 1007.75. It appears that the leg off the 998.25 L can count as a 5. This suggests that the retrace will be a zigzag, more than likely of sub-minuette degree.

There is also the chance that this stoopid [v] wave has yet to complete.

I continue to believe that we are in a topping process. Everything from structure, momentum, breath and everything in between says we are due a retrace from the big advance off the 865.25 L. It's coming whether you want it to or not.

The big's were really non-committal until the last 4 minutes of trade.

One thing is for sure, we are short-term overbought.










A lot has been mentioned lately about how the Federal Reserve is funneling money through the big banks to prop up the equity markets. They accomplish this through their Open Market Operations, both Permanent (POMO) and Temporary (TOMO).

When they purchase Treasury securities from these selected dealers, which range from $1.5B - $7.5B, the capital infusion allows them to leverage the money and basically ramp the markets.

It makes all the sense in the world to me. Whether you believe that or not, there is a high correlation to positive closing days and the Fed's OMO's. Here is a schedule of upcoming auctions.