Tuesday’s trade was revealing in terms of the current “B” wave rally running out of steam.  As I have discussed in the past “B” waves are notoriously “head fakes” the larger the degree the larger the “head fake”. The market mood for the past several weeks has been one of exuberance. Earnings season was here and everything was back to being bullish and initially they started that way.  Then the mood began to change and the term “irrational exuberance” started to float around.  Through it all though, the ES did manage to produce a few rounds of new all time highs culminating today at 4590.  The level was quickly and resoundingly rejected by the market with the ES dropping a quick $30.  I have cautiously updated the labeling and have marked the top at 4588.75 as the high of wave 5 of C.  I believe I still need to allow the market to tell me if indeed the highs are in.  With that in mind I lay out “break points” that would support the highs being in and an Intermediate wave “C” is beginning.  The ES though can reverse course and break back above 4580 which would begin to support another run for 4600 is underway.  Until we get confirmation I encourage trading smart using the moving averages and price action to dictate trading.  Not to get stuck in a thought pattern of either bullishness or bearishness.  Stay neutral with the ability to play both sides.  It’s not a matter of being right or wrong – it’s a matter of trading profitably using solid risk management and following the price action verses your gut.